BankruptBaby
Printed Deficits and the Inflation Attribution Game
"Inflation is made in Washington because only Washington can create money and any other attribution to other groups for inflation is wrong" said Milton Friedman. When gasoline prices jumped and stations ran out in the 70s, big government proponents blamed the Ayatollah. So they killed Khomeini and gas prices went down - just kidding. Raising Interest rates and tightening the money supply killed it. Only a monetary solution could fix a monetary problem.
So why do people believe Big Government when they blame Big Oil greed, Putin, supply chains, or your fairy godmother for inflation? Why do they blame the bathtub for overflowing after dumping a swiming pool's worth of water into it?
Supply is salient. You see and feel empty grocery shelves but you do not see millions of printed dollars in millions of bank accounts. Also, the effects of "printing money" is delayed so people are less apt to connect variables. Inflation takes a full two years to set in (assets, commodities to consumer).
Given supply sliency and the Inflation delay, the average person's first experience with Inflation is gasoline. It is the only "commodity" most people purchase directly and frequently and considerable time has elapsed from the monetary expansion to when gas goes up. Few notice other commoditires rising in lockstep. Fewer still experience the first (asset) inflation - how many price a car or house then re-price the identical asset after the print? Oil - this oft purchased, ubiquitous commodity - falsely appears to be causing inflation to average people - making consumer prices rise.
Further, Big Government proponents are not keen to take the blame for inflation so they put everything they have into a communications blitz as if their lives depend on it - which is not illogical. This time they are blaming Russia often. They don't mention variability by country / bank noting dealings with Russia has no correlation. They don't mention countries with massive resources that are far away from Russia and are world leaders in inflation (say. Argentina, Venezuela).
Venezuela is a good example of how truly evil blaming supply chains can be. Chavez executed this play to perfection: He convinced most that empty grocery stores (due to printing/borrowing) are due to "evil private sector" but don't worry, government will take over! A Pro-socialist 2013 article best explains these events inadvertantly. Sadly, babies then starved to death and suisides increased dramatically just so a few could gain money and power through their false Inflation attributions.
Hopefully people will not be fooled this time with false Inflation attributions and further Big Government intrusion can be avoided.. An inadvertent benefit of the coming hardships may be a salient realization of the harm government deficits cause as voting adults will experience them first hand and not pass these hardships on to their grandchildren (via borrowing). It is poetic that the deficit perpetrators will feel the pain for deficits that brought no general benefits be it medical or economic. So maybe the inevitable recession, skyrocketing Interest rates and asset devaluations is the lesser of three evils (with socialism, kids debt) but these hardships are upon us as “Inflation is always and everywhere a monetary phenomenon...”.
