Opinion from a Libertarian ViewPoint

No, Inflation Is Not Good for You | Mises Wire

Posted by M. C. on November 23, 2021

Whatever temporary gains many workers are experiencing with higher wages, the euphoria is not likely to last long. Furthermore, one doubts that this current bout of inflation is as temporary as Paul Krugman recently claimed. The US economy more and more seems to be running on empty and this means that monetary authorities are going to pump even more new money into the system. Don’t count on this being a windfall for anyone but the wealthiest among us.

William L. Anderson

With the recent rise in inflation—with subsequent increases in both consumer and producer price levels—one suspects that sooner or later people on the left either would downplay it or find a way to spin the bad news into something positive like an alchemist would want to spin straw into gold. Both accounts have arrived, thanks to the New York Times and the hard-left publication, The Intercept.

The various accounts in the Times hardly are surprising, given the link the paper has to the nation’s political, economic, and academic elites, and given that these are the people that have created the inflation problem in the first place. Not surprisingly, the NYT “experts” (because progressives believe that the “experts” always have the right answers) are playing down the latest spikes as temporary and related to current issues of supply and demand, not any unprecedented increases in the nation’s money supply.

We should not be surprised that the NYT’s resident economic “expert,” Paul Krugman, has debunked any worries of inflation and especially inflation over the long term, instead likening the current price spikes to what happened after World War II ended and the economy moved from one dedicated to total war to one producing capital and consumption goods. Likewise, President Joe Biden is touting an endorsement of his “Build Back Better” initiatives by a number of Nobel economics winners who have claimed the proposed programs included in the legislation would reduce inflation. (One should not forget that while Krugman is a Nobel recipient, his NYT columns go well beyond any economic analysis, establishing him as little more than a partisan political shill.)

There is an important point to be made here: all of these “experts” are willing to say they believe inflation is a problem for most people and the disagreement isn’t so much about the real and potential harm inflation brings, but rather the duration of the current spikes. However, there also exists among radical progressives a belief that inflation actually is a good thing because, in their minds, it transfers wealth from the rich to the poor.

The first time I saw this theme was in an article by the Marxist journalist Alexander Cockburn, who at one time had a regular column in the Wall Street Journal. Writing about the alleged “Hitler Diaries” supposedly unearthed in the early 1980s (and later exposed as forgeries), Cockburn said if one actually could mine Hitler’s thoughts, they would find that he didn’t see the hyperinflation that ravaged Germany in the 1920s as any kind of a threat, and that it actually was good for the economy. (I’m writing from memories, as I have not been able find this column in the WSJ archives.)

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