Kerby Anderson
Earlier this month, Dominic Pino wrote about “Milton Friedman’s Revenge.” His argument was that Joe Biden and Kamala Harris got the economic policy they wanted and the voters hated. It’s worth looking back to understand why the election went the way it did.
Milton Friedman was an economist best known for saying that inflation is “always and everywhere a monetary phenomenon.” He believed that inflation occurs when the money supply increases faster than output.
Four years ago, candidate Joe Biden announced, “Milton Friedman isn’t running the show anymore.” Of course, Friedman wasn’t running the show even before Biden was elected. But once Biden was elected, he proceeded to spend money and run up deficits. By 2021, the New Republic proclaimed: “The End of Friedmanomics.”
First came the American Rescue Plan Act, followed by an infrastructure law, the CHIPS Act, and then finally the intentionally misnamed Inflation Reduction Act. Biden spent more and more federal money. Democrats even invented the word “Bidenomics” to describe their economic theory. The Biden administration ran up budget deficits which as a share of GDP were greater than those in the Great Depression.
Rising inflation was inevitable. As I have mentioned in previous commentaries, economist Larry Summers warned that the American Rescue Plan would “set off inflationary pressures of a kind we have not seen in a generation.” Someone should have paid attention to him since he served as Barack Obama’s Treasury Secretary. But his warning was mocked. He was right, and the skeptics were wrong.
When voters were given an opportunity to express their opinion about Bidenomics, two thirds (68%) of voters in exit polls said the economy was “not good” or “poor.” That’s why we can call this “Milton Friedman’s Revenge.”
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Penna Dexter