Capital Matters is the antidote.
Looking back at 2022, one can only marvel at the audacity of politicians and partisan economic commentators. Two consecutive quarters of negative GDP growth? Not a recession! Runaway inflation? Nothing to do with Biden’s policies!
The market’s gyrating understanding of current events over the past 18 months makes no sense if you look at the economics or the data, but all the sense in the world once one admits that we live in a golden age of economic disinformation, and we do so in a Pinocchio-free zone.
The fun all began when the Biden administration and Democrats pushed through an enormous stimulus bill, despite the fact that the economy was fully recovered from the pandemic recession. Writing for National Review’s Capital Matters in April 2021, my Hoover colleague John Cochrane and I warned that inflation was coming, and that it would likely get very bad because policy-makers would be in denial.
(NR Capital Matters is made possible thanks to National Review Institute and, importantly, its supporters across the country. You can make a tax-deductible contribution to NRI, and help support the important work it is doing to defend free enterprise, by donating here.)
“The Federal Reserve’s new policy framework and its officials’ speeches are eerily reminiscent of the early 1970s,” we wrote, and “the Fed has announced that it will delay interest-rate hikes until inflation substantially and persistently exceeds its target, just as it delayed responses in the 1970s.”
With inflation skyrocketing, how would policy-makers justify sticking to their runaway spending and low interest rates? Well, as a matter of fact, they followed a completely predictable playbook. That’s not simply Monday morning quarterbacking. Again, to quote that piece from April 2021, John and I wrote, “Inflation will be quickly dismissed as ‘transitory pressures’ or ‘supply disruptions.’”
The Federal Reserve, while behind the curve, has finally come around, but the absence of a link between fiscal policy and the mess that we are in is still gospel to the White House and the mainstream media. Inflation is coming down, or, if it’s not coming down, it’s Putin’s fault, or Covid’s fault, or Donald Trump’s fault.
But it doesn’t stop there. If one tires of the finger-pointing and flips to another channel, lo and behold, there is shameless crowing! Writing in the Wall Street Journal, Treasury secretary Yellen claimed, “The policies of the Biden administration have propelled the American economy to one of the fastest recoveries in modern history. Because of President Biden’s plan, we have improved the economic well-being of American families and workers.”
But if the economy is so good, then why do we need to blame anyone for how bad it is? Because it really is bad. Real disposable income is down over the past year. The Treasury secretary has the mathematical sign wrong, but other than that . . .
Of course, it is not just Janet Yellen. The disinformation goes to the very top. Here’s President Biden asserting that he inherited an economy on the brink of a Great Depression. Well, actually, GDP growth in Q1 2021, when Biden was inaugurated, was 6.3 percent.
The risk of allowing this disinformation to go unchallenged is that the disastrous spending and monetary policies of the past two years will continue into the future. If that happens, there is no telling how bad inflation will be, or how deep the recession to fix it will have to be.
Which is why we at Capital Matters get up every day, dust ourselves off, and jump back into the fray with the facts and analysis that provide a guide for those who might desire to fix this economy, and to fix it with more than a Band-Aid.
The best way to build a recovery — and to use that recovery as a platform for long-term growth — is to highlight not only what should be done now, but also to win the argument for free markets. Free markets, economic growth, human flourishing, and individual liberty reinforce each other. But the belief that the first of these pillars can be jettisoned without jeopardizing the other three has become disturbingly widespread. Such a view might be expected from the Left, but we are now living in an era when free markets are also under attack by sections of the Right as well as by some on Wall Street, and in the C-suites of many of our largest companies.
NRI launched NRCM to address these issues. Specifically, the Institute supports my work and that of editor Andrew Stuttaford and of Dominic Pino, the Thomas L. Rhodes Journalism Fellow. Capital Matters is dedicated to making the case for free markets, carefully, calmly, in detail, and without apology. The best way to counter misinformation is with accurate information, effectively delivered. We believe that we are increasingly being heard where it matters and, importantly, that we are helping equip those in the front lines of the debate over the future direction of the American economy with the arguments that they need to push back against those who would stifle enterprise and innovation. Whether with longer articles or shorter posts, or the Capital Record podcast, the Capital Matters site — supplemented by webinars and events — is, we believe, a valuable resource for those who champion free markets. We are proud of the quantity and the quality of what we have published in 2022, and of the fact that we have been able to provide a platform for a number of new voices never previously heard at NR, just one sign, we believe, that we are headed in the right direction.
It is no exaggeration to say that our future will be bleak if more rational economic policy does not arrive soon. Please join me in supporting NRI and Capital Matters as it endeavors to turn the collectivist tide.