{"id":1458787,"date":"2022-04-30T07:59:41","date_gmt":"2022-04-30T11:59:41","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1458787"},"modified":"2022-04-30T08:00:22","modified_gmt":"2022-04-30T12:00:22","slug":"glenn-h-reynolds-stagflation-is-staring-biden-in-the-face-but-he-refuses-to-change-course","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/glenn-h-reynolds-stagflation-is-staring-biden-in-the-face-but-he-refuses-to-change-course\/","title":{"rendered":"Glenn H. Reynolds: Stagflation Is Staring Biden in the Face \u2014 But He Refuses to Change Course"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">34<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fglenn-h-reynolds-stagflation-is-staring-biden-in-the-face-but-he-refuses-to-change-course%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1458787&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><aside class=\"single__inline-module alignleft\">\n<\/aside>\n<p>First we were told inflation was imaginary.\u00a0Then we were told it was \u201ctransitory,\u201d the result of COVID-inflicted supply-chain problems.\u00a0Then we were told it was Russian President Vladimir Putin\u2019s fault.\u00a0<\/p>\n<p>Now people are starting to admit the massive runaway spending of the <a href=\"https:\/\/nypost.com\/2022\/04\/23\/joe-bidens-all-malarkey-all-the-time\/\">Biden era<\/a> has something to do with it.\u00a0But we\u2019re also facing stagflation, a mixture of inflation and slow growth, and the government also plays a role in turning inflation into stagflation.<\/p>\n<p>As Milton Friedman famously warned, inflation is always and everywhere a monetary phenomenon.\u00a0When the government pumps the economy up with excess dollars \u2014 something usually referred to as \u201cprinting money,\u201d though a too-literal USA Today <a href=\"https:\/\/www.usatoday.com\/story\/news\/factcheck\/2022\/04\/14\/fact-check-federal-reserve-has-balance-sheet-9-trillion\/7198368001\/?fbclid=IwAR2UY4skltgjfx-hd02N97O5jHLD6vbvFSA33w5UH04tJcOQMQFP7zfgGe0\" target=\"_blank\" rel=\"noreferrer noopener\">fact-checker<\/a> hastened to assure us that much of the money created isn\u2019t actually printed on paper \u2014 inflation results.\u00a0When you have more money in the system than goods, the price of goods goes up.\u00a0That\u2019s inflation, and it\u2019s what\u2019s happening now.<\/p>\n<p>We\u2019re seeing it everywhere, from soaring food and gasoline costs to a housing \u201cbubble\u201d that looks more like inflationary pricing to increases in rents and automobile prices and just about everything else. The latest figures, meanwhile, show that the <a href=\"https:\/\/nypost.com\/2022\/04\/28\/us-economy-shrank-by-1-4-as-inflation-takes-toll-on-gdp\/\">economy shrank 1.4% last quarter<\/a>, making it the worst since the pandemic\u2019s start; economists had expected 1.1% <em>growth<\/em>.<\/p>\n<p>There are two ways to address inflation:\u00a0Remove some of the money from the system, which the Federal Reserve did in the past via higher interest rates, and increase the supply of goods.\u00a0At this point in 1980, when inflation soared, the federal funds rate <a href=\"https:\/\/www.macrotrends.net\/2015\/fed-funds-rate-historical-chart\" target=\"_blank\" rel=\"noreferrer noopener\">was nearly 20%<\/a>.\u00a0Presently, it\u2019s 0.33%.<\/p>\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/04\/Milton_Friedman.jpg\"><\/a><figcaption>Milton Friedman is a recipient of the 1976 Nobel Prize for economic science.<\/figcaption><figcaption><span class=\"credit\">Getty Images\/ Alex Wong<\/span><\/figcaption><\/figure>\n<p>In the Carter era, we saw not only runaway inflation but stagflation.\u00a0People normally associate inflation with an overheated economy, but the sluggish Carter economy was not even close to running hot.\u00a0We had economic stagnation <em>and<\/em> inflation, which led to the coinage of the term \u201cstagflation.\u201d<\/p>\n<p>Now we\u2019re seeing the same thing.\u00a0And I suspect the reason is the same.<\/p>\n<p>Scholars of administrative law refer to the 1970s as a period of \u201cregulatory explosion.\u201d\u00a0The inflationary spiral was driven by the massive increase in spending under Democratic President Lyndon Johnson.\u00a0But when Republican Richard Nixon came in, he didn\u2019t do enough to restrain spending.\u00a0Worse yet, he midwifed the greatest expansion of federal regulatory authority since the New Deal. In fact, in many ways the regulation was more intrusive and pervasive.<\/p>\n<p>New agencies like the Occupational Safety and Health Administration and the Environmental Protection Agency were created and given sweeping mandates to remake American employment and industry. Volumes of new regulations were enacted.<\/p>\n<p>This was great for lawyers:\u00a0Membership in the District of Columbia Bar more than doubled between 1975 and 1986, from 20,311 to 44,394.\u00a0And as Jonathan Rauch details in his excellent book \u201cDemosclerosis,\u201d the regulatory explosion called into existence a huge array of lobbyists, interest groups, etc.\u00a0It made it harder for anyone to do anything.<\/p>\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/04\/us_inflation.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"682\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/04\/us_inflation.jpg\" alt=\"Inflation\" class=\"wp-image-22073177\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/04\/us_inflation.jpg?quality=75&#038;strip=all&#038;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/04\/us_inflation.jpg?quality=75&#038;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/04\/us_inflation.jpg?quality=75&#038;strip=all&#038;w=512 512w\" \/><\/a><figcaption>Many Americans are struggling as inflation continues to raise the price of essential items. <\/figcaption><figcaption><span class=\"credit\">AFP via Getty Images\/ Frederic J. Brown<\/span><\/figcaption><\/figure>\n<p>So not only did we have too much money chasing too few goods, the classic source of inflation, we also had a whole new array of stumbling blocks in the path of people trying to produce those goods.\u00a0Growth became more difficult, and as a result we got the dreaded stagflation.<\/p>\n<p>As President Ronald Reagan <a href=\"http:\/\/www.stateoftheunion.com\/1981.html\" target=\"_blank\" rel=\"noreferrer noopener\">noted<\/a> in his first State of the Union Address, \u201cAmerican society experienced a virtual explosion in government regulation during the past decade. Between 1970 and 1979, expenditures for the major regulatory agencies quadrupled. The number of pages published annually in the Federal Register nearly tripled, and the number of pages in the Code of Federal Regulations increased by nearly two-thirds. The result has been higher prices, higher unemployment and lower productivity growth.\u201d<\/p>\n<p>Under Reagan, a combination of higher interest rates, deregulation and tax cuts got the economy moving again even as inflation was eventually brought under control.\u00a0But now we\u2019re in the same old Carter boat.<\/p>\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/04\/Biden-6.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"682\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/04\/Biden-6.jpg\" alt=\"Joe Biden\" class=\"wp-image-22073251\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/04\/Biden-6.jpg?quality=75&#038;strip=all&#038;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/04\/Biden-6.jpg?quality=75&#038;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/04\/Biden-6.jpg?quality=75&#038;strip=all&#038;w=512 512w\" \/><\/a><figcaption>Biden could resolve inflation issues by removing money from the system, and increasing the supply of goods. <\/figcaption><figcaption><span class=\"credit\">EPA\/ Samuel Corum<\/span><\/figcaption><\/figure>\n<p>Team Biden hasn\u2019t just been spending us blind. It\u2019s also been regulating like crazy in ways that tend to reduce the supply of key goods. The administration has thrown stumbling blocks in the path of developing domestic oil and natural gas, blocked pipelines to bring in Canadian oil, increased taxes, added environmental rules and generally functioned in ways that tend to make it harder, not easier, to respond to the flood of money by adding production.<\/p>\n<p>It\u2019s no surprise that we find ourselves looking at stagflation again when we\u2019re re-enacting the approach that led to it the first time.<\/p>\n<p>If the Biden administration wanted to fight stagflation, it would be cutting red tape, encouraging business activity and investment and slashing federal spending.\u00a0But it\u2019s not doing that.<\/p>\n<p>Why not?<\/p>\n<p><em>Glenn Harlan Reynolds is a professor of law at the University of Tennessee and founder of the InstaPundit.com blog.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>First we were told inflation was imaginary.\u00a0Then we were told it was \u201ctransitory,\u201d the result of COVID-inflicted supply-chain problems.\u00a0Then we were told it was Russian President Vladimir Putin\u2019s<\/p>\n","protected":false},"author":489,"featured_media":2315279,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1458787","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1458787","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/489"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1458787"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1458787\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1458787"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1458787"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1458787"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}