Source: Christopher Chantrill
If you want to know the pickle the Democrats are in as they scuttle their Build Back Better bill and pivot to the real red meat, the H.R.1 bill that imposes vote-by-mail nationwide, read this piece from the NY Sun about Ronald Reagan in 1981-82.
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Beating stagflation required political heroics by President Reagan and the chairman of the Federal Reserve, Paul Volcker. It was “a triumph of economic policy,” Robert Samuelson recently wrote. “Volcker imposed a ferocious credit squeeze, and Reagan supported this wildly unpopular policy.” Interest rates soared to 21 percent. Unemployment spiked at more than 10 percent. Bankruptcies ensued. “The triumph over inflation was bought at a huge personal and social cost,” Mr. Samuelson writes.
Probably, what Reagan and Volcker did in 1981 was one of the greatest acts of political courage in U.S. history, with Volcker having the cojones to apply the monetary brakes, and Reagan having the cojones to support him and take a 27-seat shellacking in the 1982 midterms.
Now, do you think that there is anyone in power right now likely to exhibit any cojones at all on monetary policy? President Biden? Reserve Board Chairman Jerome Powell? Treasury Secretary Janet Yellen? Vice President Kamala Harris? House Speaker Nancy Pelosi?
See, if I were president, I would have had an emergency meeting right there in the White House on January 20, 2021, with all the notables and I would have begun the meeting thus:
“We have about ten months to fix policy to avoid a total political and economic meltdown in the next four years. I’m talking about the inevitable inflation from a year of printing money, plus a huge rupture in the labor market, and who knows what COVID rubbish from St. Anthony.
“So, we’ve got to stop printing money right now; we’ve got to stop trillion-dollar giveaways right now, and we’ve got to jump-start the private economy with tax-rate cuts right now. Otherwise, by February 2024 we are toast.
“By ‘we’ I mean Democrats. By ‘toast’ I mean every elected official from the president to assistant dogcatcher.”
But President Joe Biden didn’t do that. Instead, he did what Joe Biden has always done: go along to get along. C’mon man, go with the flow!
Actually, I understand our president’s problem and the problem of all 27-year-olds that literally know nothing. Just read La Wik’s article on “Stagflation.” What’s a president or a senator or a BIPOC staffer to do with all the complex interweaving of Early Keynesianism, monetarism, Neo-Keynesianism, Supply Theory, Austrian School, not to mention “Jane Jacobs and the influence of cities.” What does it all mean?
As Senator John Iselin so memorably said of the number of Communists in the State Department:
“Just one, real, simple number that’d be easy for me to remember.”
Here’s something really simple, from my website usgovernmentspending.com.
That’s a really simple chart of total gubmint spending since 1900. Notice the real simple takeaway? Spending has been chugging along at about 35 percent of GDP, plus or minus, since 1980. I wonder what that means about the possibility of a big increase in spending for Build Back Better?
Here’s something else really simple. It’s from usgovernmentrevenue.com.
Notice something real simple about total submit revenue? It ain’t goin’ nowhere. It has been chugging along somewhere south of 35 percent of GDP since about 1990. I wonder what that means about the prospects of increasing tax revenue, other than mining Elon Musk’s Roth IRA for crypto?
Let’s get really simple. The first chart is about monies handed out by a beneficent Wizard to all deserving residents of the Land of Oz. The second chart is about monies taken by force by a hateful wicked witch from nice innocent Munchkins and Winkies living in the Land of Oz.
Imagine something else really simple. That one-third, or even one-half of that money, instead of being seized by wicked witches and handed out by beneficent wizards, was exchanged by the Munchkins and Winkies in normal workaday working and making and buying and selling and saving and investing. I know, it isn’t hard to do.
But I fear it may be beyond the ability of our President and Vice President and the Democratic operatives with bylines. Too complicated! I wonder why there wasn’t anything about Munchkin economics in the Wiki article?
Anyway, it’s probably too late for that. It’s time for Emerson:
“Things are in the saddle. And ride mankind.”
“You have sat too long for any good you have been doing lately… In the name of God, go!”
BIDEN: I can call spirits from the vasty deep.
TRUMP: Why, so can I, or so can any man, / But will they come when you do call for them?
See, when the average politico understands that “Houston we have a problem,” it’s already way past midnight.