As I drove up and pulled into a gas station earlier this year, I saw something strange on the fuel dispenser. When I got out of my car, I saw it was a sticker.
The sticker was of Donald Trump pointing at the sales price, which read, “Miss me yet!”.
As I looked around, I saw a sticker on most dispensers. Some were stickers of Joe Biden and read, “I did that!”. Others were different versions of Trump.
As the weeks passed, I also saw these stickers in grocery stores pointing at food prices, and while they were funny, they were all obviously implying one serious thing: Joe Biden is the reason for inflation and why we have these economic problems.
But why do people think that? Why do we blame our presidents for economic problems like these?
Outside of being an easy political jab, like ones I talked of in my article, Party Inc., it doesn’t make any sense if we understand basic economics.
Yet politicians blame their rivals and take credit for economic issues like these. For example, in his farewell address, Barack Obama mentioned gas being around 2 dollars a gallon.
However, our economy does not work this way. It’s much more complex than just who our president is and has many elements.
It’s a capitalist market economy, first and foremost, which the government can influence through a combination of fiscal policy and monetary policy. And there are many people and organizations involved in both.
Fiscal policy is taxing and government spending, which congress and the president control and can get very politicized.
Monetary policy is control over the money supply and is managed by the Federal Reserve or the Fed for short. The Federal Reserve is our central bank and government agency designed to be independent of political influence.
While it may be complex and not have easy sticker solutions, we must accept the truth of the economy: that basic economic fundamentals and the government policies surrounding them are why our economy is in its current state.
And that the Fed, forced in part due to divided politics, enacted rampant monetary policy, which both helped and hurt our current economic landscape.
1 Comment