Dumbest Headline of 2023

Tom Woods

I don't know how to choose between all the candidates for Dumbest Headline of 2023. In my heart, they're all winners.

But I have to admit I'm leaning towards this one, just published in The Atlantic: "Inflation Is Your Fault," by Annie Lowrey.

The author begins with this:

"You would think, with prices as high as they are, that Americans would have tempered their enthusiasm for shopping of late; that they would have pulled back spending on luxury items; that they would have sought out budget and basic options, bought smaller packages, fewer things."

Let me get this straight: prices being "as high as they are" is some kind of unexplainable given, that has no cause. But the spending habits of Americans are keeping those already high prices up.

That's the thesis she's going with.

Here's the problem.

Where are Americans getting all this money to keep up all the spending that is supposedly driving the high prices?

Consumer spending can explain why certain prices rise. But if consumers spend more on X bundle of goods and thereby push those prices up, then they have less money to spend on Y bundle of goods, which in turn suppresses those prices, so there's no overall rise in prices.

But both (1) the "luxury goods" that the author says Americans are buying and (2) the budget alternatives, are rising in price. Why isn't all that extra luxury spending putting downward pressure on the prices of budget items, of which she says Americans are buying fewer?

The only thing that can make all prices rise is an increase in the supply of money. Then it is possible for consumers to increase spending on X without having to cut back on Y.

So when "Annie Lowrey" claims that "Americans have nobody to blame but themselves," she deserves to be ridiculed and mocked. Americans do not have the ability to create trillions of dollars out of thin air. The greedy American consumer explanation for inflation is nothing but cover for the US regime and its central bank, the Federal Reserve System.^*

Isn't it funny: the Federal Reserve never appears in the list of reasons our opinion-molders give for rising prices. Oh, it's Putin and Ukraine, it's consumers buying too much, it's that the economy is too strong, whatever. It is never the Federal Reserve.

They're not even once going to mention the only institution that can actually create trillions of dollars? Not even in passing?

What do we expect from professional liars, I guess.

Tom Woods

^*I can hear my economist readers asking: what if demand for money to hold should fall? That will raise prices, even absent any action by the Fed! But what is driving this sudden decrease in demand to hold money? Could it be that the money is losing its value because the central bank is creating so much of it?

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