Early in the first term of the Obama presidency, some dissidents made a parody of the rainbow-and-unicorn poster that called attention to their fears.
The bill didn't come due in either the first or second term, perhaps in part because Congress was in dissenting hands. Now, though, Congress is, by the slimmest of margins, in friendly hands. Stacey Lennox suggests that the over-reach, whether as a reprise of Congress rolling a weak president, or as a consequence of Team Obama pulling the strings, is soon to come. "Wokeness is about to be killed by inflation and stagflation. Economic issues will magnify the foreign policy failures of Biden and his team, just like a similar set of circumstances plagued the Democrats during the Carter administration. The 1970s killed the progressive movement for nearly 40 years." The majority of her post deals with the cultural over-reach, and as it was when Steal This Book gave way to The Official Preppy Handbook, it is now again. "Democrats will not simultaneously appeal to college-educated suburban voters and working and middle-class Americans." But there was a lot of pain to go with the restoration.
[A]n entire generation has come of age without knowledge of anything but de facto zero interest, and little or no inflation, and plentiful jobs. I can attest from 1978-84, that inflation, recession, and unemployment can all exist at the same time. I can remember feeling lucky to have a farm production credit loan at 9% and knowing “delighted” friends who bought homes in 1981 at 10% and a family member who bought a car at 18% and felt he got a good rate. So buckle up…John Cochrane and Kevin Hassett, which is to say, macroeconomists of some experience, are there too.
The Fed intends to deliberately let inflation run above target, in the belief that this will drive up employment, especially among disadvantaged groups. But in the 1970s we learned that there is no lasting trade-off between inflation and employment. Sustainable employment and wages result only from microeconomic efficiency, better incentives, and well-functioning markets. The record employment and fast-rising wages just before COVID-19 struck, especially among disadvantaged groups, were not the result of inflation or of monetary policy.Put "microeconomic efficiency" and "better incentives" into the basket of deplorable things, because those produce disproportionate effects that the fashionably noisy will probably denounce as systematically racist, and "well-functioning markets" are in too many parts of the country still being slammed by the ongoing corona tyranny. Buckle in, indeed.
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