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Reblogged:Econ Texts Are for Reading, Not Hiding Guns

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The good news about all those "I did that" stickers people keep attaching to gas pumps is that it seems that the mechanism of price inflation is generally understood. When the government prints fiat currency faster than we can produce things, prices generally increase as proportionally more currency chases proportionally fewer goods.
I believe my use of this screen capture from Twitter to be protected under fair use.
If only Republicans would admit that Trump, like Biden after him, spent like a drunken sailor during the pandemic, and that since inflation is part of how the government "pays" for things, Trump deserves part of the blame for inflation. Being not a Democrat does not magically absolve him.

And if only that were the only problem with this new conventional wisdom.

The bad news -- apart from Trump getting a pass for spending and inflating like a Democrat -- is that this understanding would seem to be ... incomplete and not connected to so much as common sense.

I base this claim in part on the mutterings about egg prices from more than one Republican-leaning voter I have heard from.

The fact that inflating the money supply leads to a general increase in prices does not mean that any increase in the price of something is due to (or completely due to) government manipulation of fiat currency.

Regarding egg prices: The bird flu was especially harsh last year, requiring incredible numbers of egg-laying chickens to be culled, resulting in fewer eggs to be bought. It is common sense that if there are fewer eggs to be had, those who can pay more to get them will, and others will have to find ways to cope with not having eggs.

(Or, if egg prices are kept down -- improperly by government, or by grocers who sell them at a loss in hopes of selling other things -- people who buy first will have eggs, and others will do without. That is, there will be shortages.)

These things would happen even if the buying power of a fiat dollar were constant overall, or we used actual money, like gold, and had a truly free banking system.

One need not sit through a lecture on supply and demand to see this. One need merely to remember that there was a bird flu very recently and that this affected egg supplies, and then think logically.

The fact that there is also an upward trend in prices across the board due to the government printing money partially obscures this, but it doesn't hide it completely.

Take oil. Some on the right have correctly indicated that our gas prices could be lower -- inflation nonwithstanding -- if only Biden would increase supplies, say, by getting out of the way of the petroleum industry increasing domestic production.

In the short term, prices have gone down despite this, but even Biden understands the long-term need for increasing the supply of gasoline: Beholden to the anti-fossil fuel elements and socialist sympathizers in his party, he has opted to increase the supply of petroleum ... from Venezuela.

Set aside for the sake of argument Biden's scandalously aiding a hostile regime: On this evidence, Biden understands how supply and demand affects prices better than many conservatives seem to.

Conservatives who are goading rank-and-file Republicans to blame Biden for everything, willy-nilly are discrediting themselves: Anyone can learn that Trump spent like a Democrat, contributing to monetary inflation, and anyone can tease apart the causes of high gasoline and egg prices -- as witness Biden's actions and the fact that Vox, of all places, has given a pretty good explanation of egg prices, complete with a warning that a spring wave of bird flu could keep them high for a bit longer.

If conservative intellectuals pander to "populists" long enough, they will succeed in making the left look like the font of economic wisdom.

Some time back, I saw a meme to the effect that the best place to hide a gun from a Democrat was in a hollowed-out economics textbook. It would seem that too many conservatives took that advice literally, and have forgotten what those pages contained, if they ever read them in the first place.

-- CAV

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