The Discredited Phillips Curve Cannot Be Discredited Enough

While filming an already over budget The Exorcist in the early ’70s, the late director William Friedkin secured from the stingy execs at Warner Brothers the purchase of a $50,000 air conditioning unit. Friedkin needed Regan’s (played by Linda Blair) room to be so cold that her breathing would create “breath clouds.”

Nowadays digital imagery could do for Friedkin what cost a fortune 50 years ago. As for the $50,000 AC unit or the cameras Friedkin filmed with, it’s no reach to suggest that a similar AC and camera would cost a tiny fraction of what they did back then.

Economic growth is all about falling prices, except to the economics profession. The word from the latest Jackson Hole Fed bash is that growth must slow further to push prices down. What’s sad is that both sides buy into what’s so at odds with reality.

Talking to the New York Times recently, AEI’s lead economist in Michael Strain observed that “good news” for the Fed would be a recession. Since the credentialed near unanimously believe that job loss and bankruptcy are the cures for inflation, it’s up to those short on credentials but mildly long on common sense to correct an impoverishing narrative – over and over again – that just won’t die. 

Read the rest of the article at Forbes


  • John Tamny

    John Tamny is a popular speaker and author in the U.S. and around the world. His speech topics include "Government Barriers to Economic Growth," "Why Washington and Wall Street are Better Off Living Apart," and more.

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