Fake Indian, fake economics: Elizabeth Warren unleashes her economic illiteracy on inflation

Like a fussy old librarian, Elizabeth Warren is suddenly all worried about the Federal Reserve tipping the economy into a recession with its coming rate hikes, a topic she's never shown much concern about until now.

According to Reuters:

WASHINGTON — Sen. Elizabeth Warren said on Sunday that she was very worried that the Federal Reserve was going to tip the nation's economy into recession and that interest rate hikes would put people out of work.

"Do you know what's worse than high prices and a strong economy? It's high prices and millions of people out of work. I am very worried that the Fed is going to tip this economy into recession," Warren, D-Mass., told CNN on Sunday.

The U.S. central bank's chief, Jerome Powell, warned on Friday that Americans were headed for a painful period of slow economic growth and possibly rising joblessness as the Federal Reserve raises interest rates to fight high inflation.

Powell said in a speech on Friday the Fed will raise rates as high as needed, and would keep them there "for some time" to bring down inflation that is running at more than three times the Fed's 2% goal.

So you see, she'd prefer we continue to have high prices — high, higher, highest — soaring to the Venezuela-style levels instead of the Fed taking the only known action that can stop the God-awful dynamic.  That's because rate hikes, which are done to kill off inflation, have these other unpleasant consequences.

She's perfectly right about that, but does she know what she's talking about?  About as much as she knows about Native American cuisine and what to serve at Pow-Wow Chow.

What she's saying with this economically illiterate statement is that inflation should continue to run rampant, because she doesn't like the consequences of stopping it. 

That's a tone-deaf statement, given that inflation is America's number-one concern right now, according to polls, toxic and corrosive to the economy, while the only solution thus offered by the Bidenites has been to sic the IRS on taxpayers to drain more money out of the system, a notoriously inefficient solution. 

We don't hear any complaints from Warren, who founded the Consumer Financial Protection Bureau, about that nasty business, despite her claims to be all in for the little guy.  All we hear from her are proposals for ever greater amounts of federal spending, which is fueling the inflation, and now this unseemly demonization of the Fed, which is the last thing that can stop it.

Who's the loudest advocate for student loan debt "forgiveness"?  That's right: Liz Warren.  Biden, after all, has proposed forgiving $10,000 in student debt in most cases.  That hare-brained scheme, by a Penn-Wharton estimate, is expected to cost Uncle Sam $1 trillion.

Warren would like that figure to be $20,000.

Were Warren serious about avoiding rate hikes to avoid the deleterious effects of rate hikes, she might just consider turning off the federal money spigots for a stretch.

But you'll never hear that kind of talk from her.  And that's where we see the full panoply of her fake-economic stupidity:

Inflation is caused by the Fed printing money, which, when the Treasury asks for it, the Fed will do.

Inflation is "always and everywhere a monetary phenomenon" as Milton Friedman insisted.  Friedman was icily firm on this because he knew what he was talking about  — and as architect of the Reagan prosperity years, he had the results to show for it.

Rate hikes are a necessary evil when the government can't stop spending money.  They happened during the era of Fed chief Paul Volcker in the early years of the great Ronald Reagan administration, cleaning up after the federal spend-a-thons done by Lyndon Baines Johnson, Richard Nixon, and Jimmy Carter.  They are likely to happen now, according to Fed chief Jerome Powell, given that Joe Biden can't turn off the federal money spigots.

Biden's done that big at least two times in this month alone with his monstrous $790-billion "Inflation Reduction Act" and his $10,000 federal student debt amnesty executive order, which will add as much as a trillion dollars in federal spending.  Throw in various multi-billion-dollar Ukraine war spending bills, and the federal spending just keeps rising.

Spending-wise, Biden's like a drunk going on extended and increasingly frequent benders as his disease progresses.

Warren is even worse, her only virtue being that she doesn't have her hands on the levers of power.  She's demanding that inflation be allowed to run and the federal government to just keep spending at an even higher rate than Joe Biden is doing already.  Rate hikes to stop it?  No way.  Rate hikes intended to correct this imbalance of too much money chasing too few goods will slow the economy down and cost jobs, even if regulatory red tape is fixed so that more goods may flow, so she's yelling about rate hikes.

But on the input side fueling the inflation, she's as bad as Joe Biden, who once crowed that Milton Friedman is not in charge anymore, if not worse. 

She hasn't a clue about where inflation comes from.  She just wants to spend and spend, and never let anything like inflation ever stop her.

Image: Tim Pierce via Wikipedia (cropped)CC BY-SA 4.0.

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