Kamala Harris’ Dishonest and Stupid Price Control Proposal

“Inflation comes when aggregate demand exceeds aggregate supply,” wrote economist John Cochrane of the Hoover Institution and the Cato Institute in a March piece for the International Monetary Fund. “The source of demand is not hard to find: in response to the pandemic’s dislocations, the US government sent about $5 trillion in checks to people and businesses, $3 trillion of it newly printed money, with no plans for repayment.”

“Fiscal stimulus boosted the consumption of goods without any noticeable impact on production, increasing excess demand pressures in good markets,” admitted the Federal Reserve Board of Governors as early as July 2022. “As a result, fiscal support contributed to price tensions.”

Even Jim Tankersley and Jeanna Smialek of The New York Times, a paper which almost reflexively supports Democrats, concede “most economists” say that factors including “snarled supply chains, a sudden shift in consumer buying patterns, and the increased customer demand fueled by stimulus from the government and low rates from the Federal Reserve&are far more responsible than corporate behavior for the rise in prices.”

And the rise in prices is substantial. The U.S. Bureau of Labor Statistic’s inflation calculator shows that in July 2024, it took $120.25 to buy what $100 purchased in January 2021 when Joe Biden and Kamala Harris took office. That’s on average; some sectors have seen greater or lesser inflation.

via reason.com

J.D. Tuccille.