Robert Reich vs. inflation

Robert B. Reich just posted an article extremely critical of the Federal Reserve.  Go figure.  He's seriously opposed to raising interest rates.  He almost robotically burps out the left's canard that inflation isn't really happening.  Rather, instead, evil corporations are colluding with each other to take advantage of the COVID pandemic and the ensuing supply chain snafus to stick it to the hardworking consumer.

In Reich's mind, massive increases in government borrowing and other ways of increasing the money supply, without ever bothering to create new wealth, are irrelevant when it comes to the purchasing power of the dollar.  Instead of the Fed tapping the breaks in order to stabilize the value of their fiat money, he wants there to be more high-paying jobs.  Really?  How do you do that?  The short answer is by increasing productivity.  But then, however, fewer people will be needed to do the same amount of work...not more.

Reich doesn't seem to have the slightest understanding of competition.  Other than privately owned utilities, which are regulated, there really are hardly any real monopolies.  Consumer sovereignty allows people to choose for themselves how they spend their money.  If steak is too expensive, there's always chicken or hamburger.  Rice and beans can be a tasty fallback if necessary.  Spend less than you have in your pocket, and eventually you can save up and treat yourself to steak.  Not only do "corporations" (and other businesses) compete with each other, but so do various kinds of commodities.

The bad news in all of this is that a lot of people take Reich seriously.  They want to believe that all that's making their lives less pleasant is someone else's greed, and that it can be stopped by giving the government more power.  And, speaking of the power of government, a big chunk of the supply chain problem stems from nonsensical regulations on freight transport, such as the age of a truck's engine and the union membership of the driver.

Back to the disturbing reality of Reich's unearned credibility: I once had a conversation with some fairly committed lefties.  They both had master's degrees, one in history and the other (I think) in marketing.  There was sort of a recession going on then, and they proposed cutting the workweek to four days to lower the rate of unemployment.  All I could say was "would you be willing to take a 20% cut in pay for this to happen?"  They looked at each other for a moment and then said, "Of course not."  Duh!

The champions of raising the standard of living of the lower echelons of humanity seem to be all too willing to tune out the whole concept of wealth creation.  They focus instead on distribution.  This never ends well.

Image: Steve Jurvetson.

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