To Feed His Ravenous Flock, Ron DeSantis Ignores the Real Problem With the Fed

When the late, great Sam Walton was starting out in five-and-dime retail, one of the products that appealed to him most was the ball-point pen. Though they retailed for $12.50 in 1950, Walton knew the prices would eventually come way down. And they did. Nowadays, one can visit Walmart
WMT
and purchase big boxes of pens for several dollars less than it cost to purchase just one in 1950.

What brought on the plummeting cost? The answer is simple. Economic growth. The surest sign of growth is what Rich Karlgaard refers to as a “cheap revolution” as productivity enhancements born of copious investment relentlessly push down the cost of production, and with it, prices.

It seems the only profession oblivious to the genius of economic growth is the economics profession. Yes, you read that right. Economists at the Federal Reserve in particular believe against all logic and empirical reality that growth causes prices to rise. This explains the aversion of Fed economists to prosperity. It terrifies them since they believe it sparks inflation. To “fight” inflation, economists at the Fed think the answer is centrally-planned job loss and business bankruptcy. They dress up what vandalizes reason with gauzy phrasing like “soft landing” and “Goldilocks.”

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Fed officials advertise what really indicts them on a daily basis with their belief that people must suffer to keep inflation in check. Unfortunately, politicians like Ron DeSantis ignore the real problem with the Fed in favor of cheaper theatrics. These actions insult the undeniably sharp mind of the Florida governor.

As readers are already aware, a few weeks ago DeSantis riled up his flock with the nonsensical assertion that with digital coins, the Fed would spy on us. In DeSantis’s words, “You go and use too much gas, they’re going to stop it.” He followed with “You wanna go buy a rifle, they’re going to say no, you have too many, too many of those, you can’t do it.” The Washington Post’s Catherine Rampell let DeSantis off easy with her “bonkers” comment about DeSantis’s odd assertions. Sadly, they continue.

Having sensed that Fed-bashing feeds his base, DeSantis has continued with the polemics. This has included the falsehood about the Fed printing “trillions and trillions of dollars.” The challenge for DeSantis is that if the Fed were in fact just wantonly printing dollars, then the dollar would logically cease circulating. Think about it.

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The surest sign of a lack of inflation is when a currency is abundantly circulated. That’s the case because underlying all monetary exchange is the exchange of real goods and services. If the dollar were being rendered increasingly worthless by “money printing” as DeSantis alludes, it wouldn’t serve its purpose as “money.” Really, who among us would accept rapidly declining paper in exchange for goods and services of real value?

It’s just a reminder that while governments are most certainly (and unfortunately) the primary issuers of “money,” a very real and very exacting global market decides which currencies circulate, and which do not. That the dollar is the currency of choice around the world is the surest sign that the Fed isn’t presently “printing” with abandon. For DeSantis to contend otherwise is for him to suggest that markets aren’t just stupid, but remarkably so. DeSantis once again has a good mind, and knows better.

No doubt there are higher product prices right now, but they’re rooted in the lockdowns from three years ago that DeSantis properly disdained. Good politics would be for him to remind voters that falling prices of everything are born of productivity achieved by a global division of labor which was wrecked by panicky politicians three years ago.

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Back to the Fed, advisers to DeSantis would be wise to remind him that he’s actually smart about policy, and that he should lean into his smarts. There’s much to criticize the Fed about, most notably its belief that economic growth is harmful. “Money printing” rhetoric is simple-minded stuff that is beneath DeSantis. Which means when DeSantis feeds his flock instead of educating them, he actually shrinks Ron DeSantis.