“The first panacea for a mismanaged country is monetary inflation, the second one is war.” Ernest Hemingway
In a recent news conference, President Biden lashed out at reporters who questioned his huge spending policies as being inflationary. In a furious fit he said “I’m sick of this stuff!” and then proceeded to lecture them, and apparently all Americans, for thinking that way, saying that such policies actually reduce inflation. Now if such drivel came from some low level bureaucratic hack it would not have gone viral, but coming from the President and also the Speaker of the House it did; it came off as moronic, perhaps even delusional, but certainly a political blunder.
I’m no fan of the Republican Party as they have done their own share of harm through this insidious practice of inflation, but we can understand why they will make the most of this ignorance, or delusion, or perhaps both. Hard to understand in any case as even the darling of economic interventionists, John Maynard Keynes, observed that “By a continuous process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” Thanks to information technology we are witnesses to actual testimony by the Federal Reserve Chairman Jerome Powell, so not “secretly and unobserved” any longer.
Powell no longer parrots the transitory narrative, but now sees the risk of “persistently higher inflation”. The flip/flop followed his confirmation as Biden’s choice for the next four year term; timing is important when you’re “data driven” so Powell morphed from inflation denier to inflation fighter. So too did Janet Yellen have to eat crow as she was worked over by congressional committees for not only supporting the transitory narrative, but seeing inflation as a benefit. What this did is expose the Biden administration to its untenable fiscal justifications, supported by monetary expansion and accommodation, for the massive spending for the green and social spending plans. As interests rates will inevitably rise, some seven hikes of at least 25BP each currently predicted, the already occult like calculus supporting such largess just doesn’t compute, even to the party faithful. With his support so undercut by reality, Biden’s frustration resolved to mindless fury.
Although an alcoholic, Hemingway curiously didn’t drink while working, maintaining that he couldn’t deal with both pleasures simultaneously. He was known for a keen insight, both in how to make a good martini and how people behaved, except of course as it involved himself. Keeping with Papa Hemingway’s observation, the second panacea of a mismanaged country is war, and we have had an awful lot of such mismanagement in our history. We are now faced with another managerial crisis with Ukraine.
I have written before about how I feel about the US getting involved with another adventure in interventionism, but the new question is will Biden be the last president to do so? I say last because if there is to be the big number three, oblivion will make Biden the last in the pantheon of fools to finally bring the end to all wars, and with it the human race. In the past it was Europe who brought America into their endless fights, but despite Biden’s rhetoric about unity with our allies, Europe wants no part of a Ukraine in NATO, the EU, or as a contributor to their already bloated immigration populations. They support neither a no-fly zone nor an energy sanction; the former requires their participation in military enforcement, the later their economic suicide.
While I abhor inflation and war, I would rather deal with ignorance than delusion; at least with ignorance we can hope for enlightenment, but with delusion irrational thoughts and beliefs become so fixed that nothing, including evidence to the contrary, can convince people that what they think or feel is not true. I sincerely hope that the current administration is more ignorant than delusional.