To read about monetary policy today and prices, is to be reminded of that George Orwell line about something being so ridiculous that only an intellectual could believe it. So true. Let’s add a corollary to Orwell that today’s discussion of “inflation” and its cures is so ridiculous that only an economist could take it seriously.
Think the alleged “taming” of higher prices by the Federal Reserve over the last several months. Economists, Fed economists, and those who write about both claim the Fed’s masterful market interventions brought about the lower prices. On its face the notion is absurd from a currency angle alone. Seriously, the dollar’s definition has never been part of the Fed’s policy portfolio, after which it’s almost a waste of words to ask when in history market interventions have worked out to the betterment of anything.
But that’s a digression. Let’s be pretentious and pivot to Arkady Svidrigailov, the “gentleman” in Fyodor Dostoevsky’s Crime and Punishment, and the individual who first told Raskolnikov that he knew him to be a murderer. Talking about himself, Svidrigailov noted that “I’m decently dressed, of course, and am not reckoned a poor man.” Ok, stop right there. There’s global information for the present in Svidrigailov’s self-description.
To see why, consider a previously mentioned study written for the Cato Institute by Joy Buchanan, an associate professor of quantitative analysis and economics at Samford University. Buchanan makes the crucial point that “Historically clothes have been very expensive. Thanks to globalization, almost everyone in the world now has abundant clothing in many styles.” Well, yes. Dostoevsky would understand.
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