CONRAD BLACK: Barring a Miracle (They Do Occur), It Is Hard To See Biden’s Presidency Going on Three More Years.

Hourly pay scales are increasing at 7.5%, new car prices at 10%, rental accommodation at 12%, and new homes at 20%, all well ahead of the official rate of inflation, contrary to the smug assurances of Treasury Secretary Yellen and even some Federal Reserve spokespersons, that inflation was a mere bubble.

Historically, the only sustainable way of fighting stagflation has been to counter inflation with increased supply and achieve that goal and the corresponding non-inflationary increase in demand through the encouragement of demand in the tax system. The present administration is committed to raising taxes and to colossal spending increases, which would exacerbate both stagnation and inflation.

After 13 years of negligible interest rates, there isn’t much that’s useful left in the toolbox. The inflation of the sort that is already building up historically has been attacked by reducing demand and sharply increasing interest rates. Any such policy now would produce a disaster that would be a fiscal and monetary replication of the debacle in Afghanistan.

Not since Herbert Hoover prescribed higher taxes, higher tariffs, and a shrinkage of the money supply as the remedy for the Great Depression has an American administration more poorly judged the policy prescriptions necessary to fight deteriorating economic conditions.

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