I have been watching global inflation closely, in almost every country, for more than the past 20 years. It’s literally part of my job. Brazil, China, Mexico, Hungary, Turkey, Argentina, Germany, Russia, Taiwan… I look at them all, the causes, the policy reactions, the contagion….

Of course adding stimulus to an economy can have an inflationary impact. But we needed significant stimulus during and exiting from Covid. The far bigger risk at that time was a potential decade of lost growth, which would have had a far more serious negative effect on our debt to GDP ratio, as the denominator wouldn’t have grown.

But inflation was a completely global phenomenon in recent years, for the reasons I mentioned, as well as other countries adding stimulus. My main counter to Tylertri was his effort to pin it on Biden’s stimulus, which was not a main contributor to US or global inflation.

And our economy now, with tight employment, declining inflation and relatively good - albeit low - growth (ie not a recession), is about as good as we could have hoped for two years ago.

For me it is Poland, Hungary, Germany, Croatia, Slovakia. Turkey and Greece to a lesser extent. Follow energy super closely. Tyler's attempt to pin the global chaos of the last 2+ years on the stimulus is laughable.

The German and Hungarian economies are not good right now. Not good at all. Turkey is a mess. Erdogan and Orban are idiots.

I’ll see your Turkey and Hungary, and raise you Argentina! 😂

That was my understanding, and that it being a spike is a gross exaggeration. To my recollection, it wasn't that there was significant inflation. Rather, it was that the Fed had long been looking for an opportunity to raise rates that had been held dangerously too low for two long and considered the tax cuts* and corresponding growth they generated as an opportunity to do that without any significant negative impact on the economy. Trump just wanted a higher GDP growth rate to accentuate the tax cuts and thought that lower rates would help accomplish that, regardless of whether that was actually good for the economy in the long run.

*I prefer to call them the Ryan tax cuts, as the Trump administration largely deferred to Congress on them. Ryan and McConnell deserve the credit. Trump just happened to be the Republican in the White House to sign them in. (This is also why I don't give Trump any credit, good or bad, for his Supreme Court appointments. That was all McConnell.

Long live the King

Your post is very accurate but have to disagree on the term "Spike". It was indeed a spike.

Inflation went from 1% in June 2016 to 2.9% in June 2018. The FFR went from .54% in December 2016 to 2.40% in December 2018. Those are big jumps. The markets panicked. The S&P dropped 18%. 9% in December 2018 alone, and was down 5% for the year.

Totally agree on Ryan Tax cuts, far more accurate term.

I guess what constitutes a spike is relative, but regardless, it's difficult so see an increase of 1.9% over two years as a significant, especially when considering that 2.9% in itself is not alarming. Still, a trend would be enough of a concern for the Fed to step in.

Like I said, the Fed rate was dangerously low at the time and had to be raised eventually. They arguably should have done so earlier. But seeing even a minor trend coupled with significant tax cuts forced the issue. That Trump made a meal of it says more about his selfishness than anything. He wanted a GDP growth rate higher than Obama, not because it would have been good for the economy, but because, well, his ego.

It's funny how so many of Trump's so-called accomplishments can be attributed to others, with him merely being the guy taking credit despite playing little to any role. And on the flip side, in those areas where his administration played a significant role, we can ask where's the accomplishment.

Reagan was so eager to selflessly share the credit for the 1980's economic expansion with Carter and Volcker for the unpopular deflationary actions they took in the Carter admin. :)


But to your point, I think the increasing American hunger for personality-based leadership is worrisome. Talking both sides here, as I'm also no fan of the fetishization of "Bernie," AOC, et al. Not saying I dislike everything about Bernie, AOC, just saying I dislike the celebrity nonsense attached to them.

I'm always sad that the burgeoning Tea Party ideal of elected civil servants being tightly constrained bureaucrats ("Stray from our principles, we will get rid of you and move on to the next guy") was so quickly supplanted by Trumpism where personality was everything and principles nothing.

I agree. I only want to clarify that I'm not talking about credit for what a predecessor did or didn't do. Not that Trump hasn't done that either. But rather credit for what other branches of government did. For better or worse, I don't give him much credit for the tax cuts. Nor for his court appointees. Those would have happened if any other Republican had obtained the nomination and won the election. McConnell takes the most credit for the court appointments.

I call that blame. :) I agree any GOP President would have had the same cuts and same court appts.

But I'm also OK giving the chief executive credit for chief executive things.

There are moments of strong chief executive leadership, though. Say JFK during the Cuban Missile Crisis. That was him overriding a fukton of his advisors, and he deserves massive credit for the outcome. I'm not sure Trump had any moment much like that. He seemed to go with the flow quite a bit, even with this good COVID decisions, like funding rapid vaccine development.

The last place a politician needs to be going is the Met Gala. Politicians want to be celebrities now and have no desire to be politicians. You are correct, it is on both sides of the isle. I remember the comment on W was, he's a guy you could sit down and have a drink with.

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You make very good points. I think the point about the Fed looking for an excuse is a good one. I think I was also hyper focused on the topic at that time for a few work and personal reasons so the increase seemed more dramatic to me at the time.