Monday, November 27, 2023

the wisdom of Milton Friedman

Joe Biden deliberately dismissed the influence of Milton Friedman when discussing economics, which goes to show how little Biden knows.





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Posted by Kevin Kim at 11/27/2023 07:30:00 PM

3 comments:

eastnortheast said...

I think that it a bit too simplistic view, as inflation is not a uniform increase in prices. There are many facets to it. But he is a smarter guy than me, so maybe he is right. LOL

Freidman also said that inflation is ‘always and everywhere a monetary phenomenon’ — a problem of printing too much money,

https://miltonfriedman.hoover.org/internal/media/dispatcher/271018/full

And guess under which president the amount of money in circulation DOUBLED. HINT: It is not President Biden.

I am not an apologist for President Biden but blaming him for inflation makes no sense. By the time he took office, the inflation train was fully loaded and had started its journey down the mountain. Pretty much no way to stop the train.

The web page of the Federal Reserve Bank of St. Louis has some interesting research in this area.

Brian

November 28, 2023 at 2:55:00 AM GMT+9
Kevin Kim said...

Most of the recent inflation has occurred under Biden's watch. Even with money-printing considered as a factor, it's Biden's disastrous dismantling of Trump-era policies that has led to where the US is now.

Good article on recent inflation here.

It says in part:

...inflation is only just cooling off after spiking during the last few years.

Last year, the average price of a Thanksgiving meal hit a record high. While prices of some items have dipped this year from last year’s record highs, prices are still higher than they were before the pandemic.

This year, the average cost of a Thanksgiving meal for 10 people is $61.17, down 4.5% from last year’s $64.05 average cost, according to a report from the American Farm Bureau Federation (AFBF).

However, this year’s price is still 14.7% higher than the $53.31 that a Thanksgiving meal cost in 2021, and a whopping 25% higher than the $48.91 in 2019.

“Although survey prices have begun to come down, food price inflation remains a real issue and serves as a constraint on the budget of all U.S. consumers,” the AFBF wrote in its report.

Newsom also claimed the 18% increase in the average hourly wage compared to three years ago is “nearly the best 3-year gain in 40 years.”

However, the skyrocketing inflation of the past three years has not allowed workers to enjoy their increased wages as much they might have liked.

Inflation has been a major concern for Americans since the pandemic, from groceries to gas prices and other necessities.

Two thirds of people say their expenses have risen, and only a quarter say their income has risen, according to a poll last month from the Associated Press-NORC Center for Public Affairs Research.

About 75% of those surveyed described the economy as poor.

This year, Halloween candy prices saw double-digit inflation for the second year in a row, spiking a whopping 13% since October last year.

In September, gas prices in some Southern California counties again skyrocketed to an average of over $6 a gallon.

Meanwhile, last month a report from the Alliance for Consumers estimated that the Biden administration’s rules and regulations may have forced a $9,000 price tag on American homeowners due to price hikes related to cars, washing machines, gas stoves, and dishwashers.

Americans are feeling the effects of bad policy in their wallet. I for one see no reason not to blame Biden (or, more properly, his controllers) for this. A president doesn't directly govern an economy, but he sets its general course and determines its priorities. True, the pandemic started on Trump's watch, but many businesses' reflexively fearful response to the pandemic can't be blamed on Trump, who wanted to see businesses open and operating. In Trump's case, he set the course and delineated the priorities, but businesses, especially in blue states, rebelled.

(Trump's continued advocacy for COVID jabs and his continued attempts to spin his Warp Speed project—to get jabs out to the citizenry within a year—are problematic and may have produced negative effects on quality of life and the economy. Trump is also rightly blamed for not doing much, if anything, about the towering national debt, but that puts him in line with most recent presidents who have simply stared at the debt and allowed it to balloon—as is also happening under the current administration.)

All in all, it'd be just as simplistic to shift blame for inflation totally away from Biden, especially with so much evidence of his administration's mismanagement of the economy.

People at Instapundit don't like guest poster Ed Driscoll very much, but this was a good quote:

Just think of the effects of Bidenomics as Milton Friedman’s revenge.

November 28, 2023 at 9:33:00 AM GMT+9
eastnortheast said...

I guess we will agree to disagree.

It is disingenuous to say that doubling of the amount of money in circulation did not have a MAJOR impact on inflation.

From your article, it indicates that Thanksgiving inflation was quite high between 2019 and 2021, with about a 10% increase.
"However, this year’s price is still 14.7% higher than the $53.31 that a Thanksgiving meal cost in 2021, and a whopping 25% higher than the $48.91 in 2019."

By definition, inflation is an increase in prices. I would have liked the article to give more of an analysis as to why the author thought inflation was high. The article just seemed to say, "Inflation has resulted in higher prices and people don't like it." Kind of like my parents saying that they used to be able to go out to eat for $2/meal, and they don't like now paying $10 for the same meal. I get it. Inflation sucks, and it is a relatively new phenomena that came about with the Industrial Age. Up until about the 1850's, we had 1000 years of pretty much no inflation..

But US presidents get WAY too much credit for economic success and WAY too much blame for economic bad times. The US economy, while still huge, is a smaller and smaller part of the overall world economy. Hypothetical example: President Trump gets elected in 2024. China invades Taiwan in 2025. What will happen to the US and world economy?

By pretty much any economic measure (GDP, unemployment, wage growth, inflation, debt, foreign trade, etc etc etc), there is very little historical difference in economic success/failure between Republican and Democrat presidential administrations.

Since inflation in the US has dropped from 10% to 3% over the past 1.5 years, what economic politcies enacted by President Biden have caused this? If a person is going to blame him for increase in inflation, then he should get credit for the decrease. But Biden didn't do shit to bring down inflation. The only real handle to turn is interest rates, and the President has no control over that. It would have been the same if Trump had been re-elected.

(BTW, overall It think that Biden has done a shitty job as president. But I also think that the right is as guilty of having TDS as the left. For the left, it is Trump Derangement Syndrome. For the right, it is Trump Deification Syndrome.

Politics have become so polarized, with social media resulting in people reading only the side they agree with and gerrymandering of legislative districts resulting in more and more "fringe" candidates getting elected from both sides. Another is that the primary system allows the more extreme candidates (from both sides) to win. But it doesn't play as well in state-wide or national elections, and I think that it one of the problems the Republicans have had recently.

Interesting topic, but going down the political rabbit hole on the internet is a no-win.

I think I will stick to commenting on your hiking. LOL

Brian

November 29, 2023 at 12:46:00 AM GMT+9

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