As I wait for Kamala Harris’ inflation plan, I am convinced she knows nothing about monetary policy.

When you think about government, you should allow yourself to go outside the box. It means looking at the realities of human behavior and how we relate to each other. The only reason humans force themselves to be together is for the exchange of value. The values exchanged could be promises of physical protection exchanged for money; the delivery of public services in exchange for a tax; paying the house bills in exchange for a home cooked meal, and a clean house, and frequent sex.

Some would argue that government, in exchange for your promise to comply with the law and treat government as valid, promises to protect your personal and property rights. At least that is what we read on the paper the Constitution is written on.

Rather, I see government, based on its actions, simply as a transfer agent for bondholders who are interested in extracting your “money”, your energy. This extraction takes the form of the taxes that are turned into the currency that funds government bonds.

Law and order is necessary for the smooth transfer of taxes to bond payments. In a democracy, political promises of protection are necessary to distract the taxpayer from the extraction process. So distracted are we that we never even bother to ask the government for an itemized bill spelling out the cost/benefits of the relationship.

In some ways, Kamala Harris is a near perfect agent. Her current campaign ads sans discussion on the economy remind us that she cut her teeth as a prosecutor, constantly reminding us that her opponent, Donald J. Trump, is a convict who so far has done his impersonation of the Teflon President by escaping the frying pan of the electorate. Let’s face it. He should have been cooked politically given his legal problems. So, as a prosecutor, Ms. Harris can appreciate the law-and-order aspect of government.

She also understands the importance of promising gifts to the electorate. In her case she has combined her caregiver, nanny state version of economics with the gift giving of politics. As the convention draws near, Ms. Harris must present definitive policy on the economy, a topic that occupies the minds of most working Americans.

Ms. Harris’ economic narrative is centered on ending child poverty, reducing the costs of health and childcare, and promoting labor unions. While she has not spoken directly to inflation and its causes, Ms. Harris seems to prefer focusing on the consumer prices within which inflation manifests itself.

Ms. Harris may believe that to get to the cause of inflation may be too wonky for the average voter. I don’t think its wonky at all. Inflation is the increase in money supply such that the additional money created is bidding up prices on too few goods. For Ms. Harris to go down that monetary policy rabbit hole risks the quick conclusion that she cannot do much about inflation at all.

To be fair, her Republican critics get it wrong as well when they blame her and the current president for higher prices. They rather play attack politics than educate the voter.

To Mr. Trump’s credit, he understands that grabbing inflation by the balls means breaching the wall of political independence between the Executive Office of the White House and the Board of Governors of the Federal Reserve. Just about everyone but Ms. Harris understands that talking about inflation means talking about money supply and when you talk about money supply, you talk about the Federal Reserve.

On the other hand, Ms. Harris may be offering a passive aggressive narrative on inflation and the economy because if the predictions regarding the labor force over the next ten to twenty years are correct, the government may have to play nanny state.

Alton Drew

8 August 2024

For more of my take on the American political economy, buy my book at amazon.com/author/altondrew. Or make a donation.