Part II of III on Inflation: Conservative Analysis of the Proposals Offered by Liberals and Trumpists

In my last post, I explained what inflation is and how it affects the economy and examined the causes of its current increase. In this post, I analyze the proposals offered by liberals and Trumpists and explain why they would not work or would even exacerbate inflation or cause other economic problems. Proposed Solutions by Liberal Democrats: More Government Spending: As always, liberals propose more government spending, which would temporarily help people afford increased prices, but it would soon be more inflationary because it would decrease the value of the currency by adding to the surplus of money over goods and services that causes inflation. Increased Minimum Wage: Liberals propose to increase minimum wages, which would force businesses to increase prices, thus exacerbating the wage-price spiral, plus also have the same effect as more government spending because the employees would have more money to spend. The usual liberal proposal to compensate employers for increasing their labor costs would obviate price increases, but nevertheless be as inflationary as other government spending. Anti-Fossil Fuel Policy: They are also engaging in opportunistic and populist politics because of their opposition to fossil fuels, but fossil fuels alone are not the culprit of the current situation and an anti-fossil fuel policy would neither be a short-term solution, nor even a complete long-term solution. Imports must be shipped — using oil. Furthermore, the world economy affects the American economy through travel, trade, etc. Proposed Solutions by Trumpist Republicans: Similar to what liberal Democrats do when they are out of power, Trumpist Republicans have been exaggerating problems and blaming liberal Democratic President Joe Biden for everything bad, no matter how external causes or even how much Donald Trump’s policies contributed to them, while minimizing or ignoring anything positive. And they are offering similarly thoughtless solutions. Trumpism is a populist mix of protectionism, isolationism, nativism, authoritarianism, corruption, cruelty and falsehood. Tax Cuts: Trumpists are offering the usual conservative proposal to cut taxes, which although economically beneficial, would have a similar result to increased government spending for the same reasons: it would temporarily make prices more affordable, but then increase demand and thus prices. Energy “Independence”: And similar to liberals on energy policy, they are being opportunistic and populist. Their slogan of “energy independence” is phony, as it would include Canadian oil. There is nothing wrong with importing British or Norwegian oil, for example, or fossil fuels from other friendly foreign States. It is not necessary or efficient to produce everything domestically. Moreover, the culprit of the current situation is the production cuts from the Organization of Petroleum Exporting Countries, a cartel, which is aggravated by the Russian invasion of Ukraine. Thus, eliminating imports would not even be a the only short-term solution, even if it were possible in the short-term, which it is not. Furthermore, as with the liberal proposal to reduce American reliance on fossil fuels, the potential benefit of so-called “energy independence” is exaggerated because it would not insulate Americans from the economic harms of increased oil prices. High Tariffs for Protectionism: Although not necessarily promoted as a solution for inflation, Trumpists call for increased tariffs, or at least oppose reducing or eliminating them, particularly on Communist China, as an economic remedy (i.e. not for security or human rights concerns). Tariffs, which are excise taxes on imports, necessarily increase prices. Donald Trump imposed many as part of a policy of protectionism (i.e. favoring domestically produced goods by raising the costs of imports). Biden lifted some, but not all, as some liberals are protectionist like Trumpists. Imposing more tariffs would increase inflation, while not reducing or eliminating them would be losing an opportunity to reduce the prices of some goods and thus reduce inflation. More Restrictions on Migrants: Trumpists are being populist and demagogic by advocating for increasing border enforcement, particularly more restrictions against migrant workers or immigrants looking for work, as this proposal would exacerbate the labor shortage, which is one of the causes of the current spike of inflation. In my next post, I offer conservative solutions to the current price spikes.