Managing the national economy is complicated and I don't pretend to understand it. All I know is that practically the entire world suffered from inflation during and after the COVID-19 pandemic. Various governments have struggled to get inflation under control and some have been more successful that others. For example, here's what the inflation rate for the USA looks like over the past five years. The current inflation rate is about 2.4%.
I just heard a couple of Republican pundits claim that one of the priorities of the new Trump administration is to bring down inflation. Does anyone know what their goal is? Are they aiming at a zero inflation rate or just something below 2.4%? Can someone explain, in simple language, what policies the new administration will use to bring down inflation? Does the general public think that the Trump administration will actually lower the cost of goods by creating a negative inflation rate?
We have a similar situation in Canada. Here's the inflation rate over the past ten years. The current inflation rate is 1.6% (September 2024).
The Canadian opposition parties are blaming the current government for inflation and they are promising to do better. Does anyone in Canada know what their inflation rate goals are and how they hope to achieve them?
Let's assume, for the sake of argument, that my questions are merely rhetorical questions and I actually know the answers. Let's assume that the opposition parties in Canada and the United States (and elsewhere) know full well that current governments have been quite successful at combating inflation. Those opposition parties are deliberately misleading the public by claiming that they would have done better and they will bring down inflation if they are elected. Is is possible to create a society where this kind of rhetoric is not acceptable? Is it possible to create a society where the public is so well educated that opposition parties cannot get away with spreading misinformation?
Or are we doomed to be controlled by an electorate that is incapable of distinguishing between truth and reality?
Most people have neither the time nor ability to handle questions of that sort. They vote on the basis of an overall impression of candidates (vibes). Even an educated person like myself struggles to choose candidates for offices like judge and insurance commissioner.
ReplyDeleteI think the claim is that they will bring down prices, not the inflation rate. Of course that's deflation, which is supposed to require a depression. But the details are unimportant; the claim has served its purpose, at least in the U.S.
ReplyDeleteLarry better don’t step outside your area of expertise again, or you might end up deleting entire posts, like those on the politics of infectious diseases and Palestine, after your readers gave you more than you bargained for.
ReplyDelete@Anonymous I have been blogging for eighteen years and the only post that I have ever deleted was for legal reasons to avoid a threatened lawsuit by someone who had more money than brains.
ReplyDeleteI do not recall any posts on Palestine or infectious diseases where my readers gave me more than I bargained for.
If you have some serious objections to my comments about inflation then please post them here. I assure you that your comment will not be deleted even if you choose to remain anonymous.
@John Harshman I agree that much of the rhetoric seems to imply that one party will actually lower the cost of goods and services. I can't tell whether this is a deliberate lie or whether they have some policy that will lower prices without causing a recession.
ReplyDeleteLarry, I believe the side in question has concepts of a policy.
ReplyDeletePractically all the inflationary pressures are external and are happening in all countries, so neither side is going to get a grip on inflation. Firstly, inflation started with the catch-up after covid, not during (when it flatlined), and then the Russian invasion of Ukraine caused another big spike. Inflation has had further boosts from other sources, and inflation is going to stick around because we are going to get more or more crop failures with climate change.
ReplyDeleteAs far as policies go, the general agreement is that if Trump keeps his promises (e.g. deporting foreigners, tariffs on trade), he will cause inflation to increase. Though I suppose it is possible that if Musk and Kennedy sack enough people in the name of efficiency, it might cause enough of a depression to stop people buying (as happened with the Covid lockdown), and that would bring down prices.
I think Finland does quite a good job of countering misinformation. As far as I remember, it is taught in schools. It is probably already too late for that in most countries though.