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Inflation is a choice. It's a choice for which the Fed is chiefly responsible. The risk of an inflationary spiral arises when policy makers first dismiss the problem and then cast blame elsewhere. Inflation becomes embedded in the price-formation process when the central bank acts belatedly or with insufficient conviction. To date, the Fed has acted as an enabler.
The sure sign of a problem: when a president gives voice to the scourge of inflation — and takes executive action — well before the central bank acknowledges the severity of the situation.
Chairman Jerome Powell called low inflation — which averaged 1.7% in the prior decade, a mere 0.3 point below the Fed's target — the pre-eminent economic challenge of our time. So the Fed bet on a new policy regime to get inflation higher. It worked. It's not the first time a central bank wanted a little more inflation and got a lot more.
Last year, in another break with precedent, the Fed loudly and explicitly endorsed a blowout in federal spending. Congress swiftly agreed. Federal spending increased from an average of about 21% of gross domestic product in the prior decade to more than 30% in fiscal 2020 and 2021. National debt relative to GDP increased from 79% in 2019 to more than 100% today. Most troubling, the Fed bankrolled the fiscal profligacy, purchasing more than half of the new Treasury debt issued this year. Call it monetary dominance.
Achieving a soft economic landing at this late stage is difficult. If the sole task were to drive inflation down, the Fed would immediately taper its asset purchases and start raising rates. But a significant tightening cycle would likely cause market volatility to surge and assets to reprice. The authorities have expressed little concern about financial excesses, bubbles or financial imbalances. Hope they're right. I expect tension between the Fed's goals of price stability and financial stability to be in sharper relief in the new year.


"To meaningfully punish them and send a clear signal to the surveillance technology industry, the US government should deploy financial sanctions."
"It's terrible to every morning get up and have to go look at the numbers and then look at the news and see the stories. It's just crazy. It's just crazy and this needs to stop."Philadelphia, a city of roughly 1.5 million people, has had more homicides this year (521 as of Dec. 6) than the nation's two largest cities, New York (443 as of Dec. 5) and Los Angeles (352 as of Nov. 27). That's an increase of 13% from 2020, a year that nearly broke the 1990 record.

Comment: Odd, because when you compare covid requirements to the principles of the Nuremberg codes (enacted especially because of the treatment of Jews in Nazi Germany), Baudet's comparison doesn't look so outlandish.