Rising Prices Are a Consequence of Bad Politics

[Tomás Rizos]

Kevin Warsh dismisses “supply-chain bottlenecks” as the source of rising prices based on the assertion that “prices are rising at the points of production, assembly and transportation” (“The Fed Is the Main Inflation Culprit,” op-ed, Dec. 13) “This is a description of the state of affairs, not its source,” he writes. Such a view presumes that the producers of the inputs that lead to finished goods are immune to monumental political error. In truth, the prices we consumers enjoyed before the imposition of “command-and-control” lockdown policies were the wondrous result of remarkable cooperation defined by trillions of commercial relationships entered into over many decades by billions of workers around the world.

The smothering of this amazing global achievement was going to have consequences, and we’re suffering them now. Except that the consequences are not inflation. To misdefine them, as Mr. Warsh does, is to relieve politicians the world over who, in response to a spreading virus, chose economic contraction as their mitigation strategy. The state of the consumer-price index is a political phenomenon born of panic, not an inflationary story of dollar-price decline.

John Tamny


https://www.wsj.com/articles/rising-pri ... 1639780219