Look at me, I am a Lew Rockwell paleolibertarian
If
I were a skilled cartoonist, you know what kind of editorial cartoon I
would first draw? My first cartoon would be drawn in the style that was
common in cartooning about a century ago. The cartoon would depict a
poor widow and her two orphans who are dressed in old and worn-out
clothes, and they would be shivering and huddling together on the
floor, looking all scared. They would be looking at the front door that
is half-open as the laughing Inflation Beast is stepping in, ready to
greedily take everything from these poor people.
If there is anything dumber than actually advocating inflation, I don't even want to know what it might be. As surreal as this may hopefully sound to some of my readers, in the Finnish political scene there used to be political parties and politicians who explicitly wanted higher inflation. I don't know if similar idiots ever existed in USA or Canada. These days, of course, we can thank Wal-Mart for protecting the decent people from the fangs of the Inflation Beast, and even creating deflation in many fields. Perhaps this is one of the real reasons why Wal-Mart is so very hated. (We can easily see that the stated reasons of leftist hatred of WalMart are not their real reasons for doing so, simply by observing whether they e.g. similarly oppose other for-profit and nonprofit outfits whose wages and benefits are equally low.)
For some reason, none of the standard arguments against deflation have ever struck me as being valid or even relevant. Stuff gets cheaper and that is always a good thing. For example, the argument that nobody will buy anything right now because things will be cheaper in the future, which will then supposedly lead to a deflationary spiral, seems oddly ignorant of temporal discounting.
If there is anything dumber than actually advocating inflation, I don't even want to know what it might be. As surreal as this may hopefully sound to some of my readers, in the Finnish political scene there used to be political parties and politicians who explicitly wanted higher inflation. I don't know if similar idiots ever existed in USA or Canada. These days, of course, we can thank Wal-Mart for protecting the decent people from the fangs of the Inflation Beast, and even creating deflation in many fields. Perhaps this is one of the real reasons why Wal-Mart is so very hated. (We can easily see that the stated reasons of leftist hatred of WalMart are not their real reasons for doing so, simply by observing whether they e.g. similarly oppose other for-profit and nonprofit outfits whose wages and benefits are equally low.)
For some reason, none of the standard arguments against deflation have ever struck me as being valid or even relevant. Stuff gets cheaper and that is always a good thing. For example, the argument that nobody will buy anything right now because things will be cheaper in the future, which will then supposedly lead to a deflationary spiral, seems oddly ignorant of temporal discounting.
One good argument to this thing is computers/cellphones. You can be quite sure next year you will be able to buy better computer or cellphone with much cheaper price. Does this stop people buying computers or cellphones now?
But maybe you are advocating return to gold standard?
Posted by Anonymous | 7:16 PM
Yes, the pro-inflation party was very active about 100 years ago. In the U.S., historically the government has helped farmers take out huge loans. These farmers commonly end up over their heads and crying for inflation.
William Jennings Bryan's famous "cross of gold" speech (cited by populists still today) in 1896 was a call for inflation (by silver coinage) over concerns that a return to the gold standard would cause "deflation" crucifying farmers on a "cross of gold."
Most people today don't realize that the key role of the Federal Reserve bank is to steadily inflate the money supply - never give a saver an even break. However, the independent Fed has moderately inflated compared to most countries where the treasury directly gets to spend the new paper.
Posted by Disgruntled | 8:37 PM
Don't confuse price-level changes from efficiency improvements with inflation. Inflation is an increase in the money supply. All other things equal, it will result in higher prices. Similarly deflation is a decrease in the money supply.
Generally, other things are not equal. For one thing, new people are born all the time, which increases the demand for money. This results in a decrease in price levels, as money-demand increases and the price of money increases. Another effect is efficiency increases in business and production result in price level drops. A converse effect is efficiency increases in tranactions, which tend to decrease the amount of money people want to hold.
All things totalled, the Fed is pumpiong out money at a goodly clip - perhaps 9%/year inflation in recent years. (Measuring money is tricky.) But this inflation is somewhat masked in the measurements of price levels the government makes, because of the countervailing effects of population increase and efficiency gains.
Posted by Leonard | 12:02 AM
We MUST return to a gold standard (or other metal) standard.
Posted by Anonymous | 11:04 PM