Sometimes leftist media outlets try to out-dumb themselves like it’s some sort of prestigious competition for who can churn out the most ignoramus hot take of the year. The Washington Post is definitely in the running for first place with its latest stupidity about inflation.
Post reporter Julie Zauzmer Weil published a piece of propaganda with a headline that defied any modicum of common sense: “Why you may not want lower prices as much as you think you do.”
Her sub-headline was just as bad: “Though Americans might be clamoring for relief on groceries, housing and energy costs, economists say there’s a bigger downside to falling prices.”
Imagine being a Post editor with at least a functioning brain agreeing that this insanity was actually going to go over well with the readership. This is just as kooky as when MSNBC tweeted out November 8, 2021, that the spiking inflation running amok under President Joe Biden was “a good thing.”
But Weil couldn’t be stopped. She spent 1,456 words worth of column inches attempting to make this lunacy somehow make a lick of sense. Despite her own admission that prices across a litany of sectors soared a whopping 25 percent over the last five years, Weil then basically just told American consumers to deal with it: “The problem is, there’s generally no going back once prices rise. And for good reason.” She then distorted the dismal science of economics to cast falling prices as a de facto indicator of recession: “Ironically, falling prices can both signal a recession and trigger one.”
Here’s the glaring problem with that logic. Deflation, as Investopedia explained, could actually be considered a “good thing” for “most of the time.” In fact, with prices as exorbitantly high as they are, a general decrease “gives consumers greater purchasing power.” Aside from price drops from food and energy volatility, which Weil conceded were welcome exceptions, Investopedia further contextualized that “a general, persistent fall in all prices not only allows people to consume more but can promote economic growth and stability by enhancing the function of money as a store of value and encouraging real saving.”
Even the National Bureau of Economic Research wrote in a paper published 2004 that there’s much more nuance to deflation than what Weil let on. “Good deflation, they maintain, occurs when aggregate supply of goods (say from technological advances, improved productivity, and the like) increases faster than aggregate demand, resulting in falling prices,” NBER noted. “Bad deflation in turn occurs when aggregate demand falls faster than any growth in aggregate supply.” NBER even concluded then that “These economists find that, contrary to conventional wisdom, deflation may well be more positive than negative.”
You wouldn’t know any of this nuance reading Weil’s nutty piece painting a broad, negative stroke across a decrease in prices writ large. Instead, she simply conjectured that “If wages stay high but the price of goods fall, companies won’t make enough profit to pay their employees.” She even cited Columbia Business School Professor Laura Veldkamp to take her fringe theory a step further by suggesting that “even the expectation of lower prices can trigger a recession.”
How dare Americans not want to pay the price of a new car for a used one! Are we getting that right, Weil? Veldkamp reportedly told Weil that “‘“Price declines are typically associated with really severe negative outcomes,’” which in light of Investopedia’s context clearly shows this is not necessarily true. Mises Institute Associate Scholar Frank Shostak even wrote in January that “Contrary to such thinking, deflation, which is manifested by declining prices, is the mechanism that makes a great variety of goods produced more accessible to individuals.”
So what exactly would work to compensate for this dilemma, eh Weil? Well, she gave one suggestion: government price controls. Yes, you read that right:
[Moody’s Analytics economist Matt] Colyar said he thinks government policy could reduce prices in two major areas: housing and health care. The government is heavily involved in health care and could pursue policies that reduce costs.
So the solution is the government once again sticking its grubby hands to control the means of production. Now where have we heard that hammer and sickle idea before? Weil continued to go down that cesspool, and even puffed up communist New York City mayor-elect Zohran Mamdani’s economy-wrecking government tax and spend policies:
Some left-leaning activists who have been blaming Trump for high prices acknowledge he can’t return prices to pre-pandemic levels. Instead, while acknowledging the risks that government spending can itself juice inflation, some envision a government that covers more of the costs with which families are struggling. Zohran Mamdani won the New York mayoral race on a platform that calls for subsidizing child care, freezing rent and making public transit free.
Holy smokes. It’s like watching a train wreck happen in real time.
