Today’s inflation is the result of global shocks whose consequences far exceed the capacity of any one government to control. And while some of the policies US Democrats implemented in response to these shocks may have exacerbated inflation, they were also entirely justified.
NEW HAVEN – Next week, the United States will hold its midterm elections. While Democrats hope to attract voters with their pledge to protect abortion rights, Republicans have focused their campaign messages primarily on inflation, which they blame on their opponents’ “reckless” and “out-of-control” spending. But can recent price increases really be blamed on Democrats?
The short answer is no. Today’s inflation is a global phenomenon, fueled by two large-scale shocks – the COVID-19 pandemic and the war in Ukraine – whose consequences far exceed the capacity of any one government, even America’s, to control. And while some of the policies the Democrats implemented in response to these shocks may have exacerbated inflation, they were also entirely justified.
Start with the pandemic. Economic textbooks place inflation into one of two categories: demand-pull or cost-push. But this classification does not apply to markets under pandemic conditions. Consider restaurants. When the pandemic began, the number of people willing to dine in a safe and legal environment presumably stayed the same, as did the number of restaurants willing to provide their services safely and legally. What changed was that dining out was suddenly unsafe and, in many cases, illegal.
NEW HAVEN – Next week, the United States will hold its midterm elections. While Democrats hope to attract voters with their pledge to protect abortion rights, Republicans have focused their campaign messages primarily on inflation, which they blame on their opponents’ “reckless” and “out-of-control” spending. But can recent price increases really be blamed on Democrats?
The short answer is no. Today’s inflation is a global phenomenon, fueled by two large-scale shocks – the COVID-19 pandemic and the war in Ukraine – whose consequences far exceed the capacity of any one government, even America’s, to control. And while some of the policies the Democrats implemented in response to these shocks may have exacerbated inflation, they were also entirely justified.
Start with the pandemic. Economic textbooks place inflation into one of two categories: demand-pull or cost-push. But this classification does not apply to markets under pandemic conditions. Consider restaurants. When the pandemic began, the number of people willing to dine in a safe and legal environment presumably stayed the same, as did the number of restaurants willing to provide their services safely and legally. What changed was that dining out was suddenly unsafe and, in many cases, illegal.