continued from page ExxonMobil, controls ….
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ExxonMobil, controls the market. Even the biggest company is just one participant in a competitive market.
Unless our president wants to argue that American oil producers are a cartel, like OPEC, that controls about 40% of total world oil production, no one company causes the price to move.
Every company is a price taker, not price maker.
Whatever the price is, companies will produce and sell as much as they can to maximize their current revenues. To suggest otherwise is pure economic ignorance.
Unfortunately, the late, great Nobel prize winning economist Milton Friedman, who explained the causes of inflation, has been washed away in today’s woke culture.
Friedman’s famous observation was that “inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”
Friedman is unpopular with liberals because once it is understood that inflation is the result of the government printing excessive amounts of money, we understand that inflation can only be caused by government, because only government can print money.
Once it is clear that only government actions, in the way of creating excessive amounts of money, cause inflation, then those in government cannot blame others, as our president is now doing.
Economists Steve Hanke and John Greenwood, looking at the rate at which the Biden government was creating money, wrote in the Wall Street Journal in July 2021, “By the end of the year, the year-over-year inflation rate will be at least 6% and possibly as high as 9%.”
Clearly, they were right on target.
Responding to Biden’s recent explanations about inflation, Hanke and Greenwood point out, “China, Japan and Switzerland also face elevated oil prices, supplychain problems and fallout from the war in Ukraine, but their annual inflation rates are 2.1%, 2.5% and 2.5%, respectively. They have avoided the ravages of inflation because their central banks haven’t produced excessive quantities of money.”
If there is anything we should be grateful for today, given what is happening, it is that Biden and the Democrats in Congress failed in their Build Back Better plan to layer another $5 trillion in new government expenditures into our economy.
Less government spending and more honesty, responsibility and clear thinking is our only path to emerging from today’s economic chaos.
Star Parker is president of the Center for Urban Renewal and Education and host of the weekly television show “Cure America with Star Parker.” To find out more about Star Parker and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com. COPYRIGHT 2022 CREATORS. COM
In defense of Reagan