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America will need another Ronald Reagan to wring out Biden’s raging inflationary cycle

Written By | Jan 12, 2022

President Joe Biden addresses rising US inflation during a press conference in Baltimore, Maryland. PBS News Hour screen capture.

WASHINGTON. CNN says inflation is a blessing in disguise. It’s a “good thing for many working-class Americans – especially those with fixed-rate debt like a 30-year mortgage.” That’s like saying, “The Titanic striking an iceberg was tragic, but at least the ship’s sinking solved its rat-infestation problem.”

Like those rats on a sinking ship, all Americans are affected by the inflation now flooding the economy, driving up prices to levels not seen in four decades. Inflation will devalue the savings of every sacrifice-making, hard-working American.

Friedman, Reagan, Inflation, Biden, Krugman

Economist Milton Friedman receives the Presidential Medal of Freedom from President Ronald Reagan, 1988. Photo: The White House.

Economist and Nobel laureate Milton Friedman described inflation as an “old disease” affecting humankind. “There is nothing simpler than stopping an inflation,” said Friedman, but added,

“There is no way of slowing down inflation that will not involve a transitory increase in unemployment and a transitory reduction in the rate of growth of output. But these costs will be far less than the costs that will be incurred by permitting the disease of inflation to rage unchecked.”

When Ronald Reagan assumed the presidency in January of 1981, unemployment stood at 7.6 percent. The prime interest rate hovered around 21.5 percent. And inflation topped out at 13.2 percent.

Reagan’s economic policies reduced taxes and regulations, lowered federal spending, and decreased America’s money supply. His policies, as Friedman observed, brought about “transitory” pain. Misery the media used as a weapon to attack what it dubbed “Reaganomics.”

Nine months into his administration, the Associated Press surveyed Americans’ views on Reagan’s economic program,

“While Reagan got his lowest marks for handling the economy and there was less optimism about the economy in general than in any previous poll in 1981, the poll reported no change in how respondents foresee their family finances over the next year.”

Buried near the bottom of AP’s analysis was this,

“People who said either inflation or interest rates were the most important economic problems were more likely to give Reagan favorable economic ratings than those who said unemployment was the most important problem for the government to help control.”

By 1988, unemployment fell to 5.5 percent. The average family’s earnings grew 27 percent. And the nation’s gross domestic product rose 26 percent.

But not all were happy with America’s much improved economic situation. New York Times columnist Paul Krugman for one.

In a 2004 op-ed, Krugman noted,

“By the end of 1982, the US economy was deeply depressed, with the worst unemployment rate since the Great Depression. So, there was plenty of room to grow before the economy returned to anything like full employment.”

However, Krugman, an economist with a deep affection for interventionist Keynesian economics, all but admits these FDR-era policies dug a fiscal hole so deep there was nowhere else to go but up. Reaganomics, Krugman contends, was no more than an economic dead cat bounce. (Tuesday stocks: Dead cat bounce, turnaround rally, or bull trap?)

Friedman, Reagan, Inflation, Biden, Krugman

New York Times columnist Paul Krugman.

Well, the good old days of Keynesian stupidity are back. And faux President Joe Biden and Fed Chairman Jerome Powell are the new inflation’s architects. Inflation that will undoubtedly get worse.

As the Washington Post’s Henry Olsen observed,

“The United States, like much of the rest of the world, poured money into the economy during the [COVID-19] pandemic. Indeed, it poured so much money into people’s wallets that personal income hit record highs in 2020 despite widespread unemployment. Biden’s unnecessary and spendthrift relief bill merely poured gasoline on the smoldering fire. Tens of millions of Americans had money to burn when the vaccines allowed the economy to reopen. They’re burning it now, and inflation is the result.”

America’s first inflationary period arose after the US emerged from World War II. President Harry Truman and the US Congress enacted wage and price controls in response. An inflation-fighting tool that President Richard Nixon also used in the early 1970s. His successor, President Jerald Ford, issued “WIN” (Whip Inflation Now) buttons to encourage Americans to save and control spending. All failed to ring out inflation.

Ford, Friedman, Reagan, Inflation, Biden, Krugman

Ford administration 1970s “WIN” button. CBS News screen capture.

And this inflationary cycle extended past Adolf Hitler’s suicide, Neil Armstrong’s walk on the moon, and the premier of Steve Jobs’ half-pint Macintosh computer.

However, it’s unclear how long the new inflation will plague America before another Ronald Reagan emerges with the courage to take on the dissembling media’s attacks. All while painfully wringing out America’s new Bidenian inflation.


Read more from Steve Lopez

About the Author:

Originally from Los Angeles, Steven M. Lopez has been in the news business for more than thirty years. He made his way around the country: Arizona, the Bay Area, and now resides in South Florida. Steven is a senior political staff writer for Communities Digital News and an incredibly talented artist, a cigar and bourbon aficionado.

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Steven M. Lopez

Originally from Los Angeles, Steven M. Lopez has been in the news business for more than thirty years. He made his way around the country: Arizona, the Bay Area and now resides in South Florida.