No. of Recommendations: 2
ME:I think Nixon did his price freezes by EO. I'm wondering if you can do a price roll back by EO?
ALBABY:
No. And you can't do a price freeze by EO any more, either. There used to be a statute that gave that authority to the President (the Economic Stabilization Act of 1970). It's long gone.
Good to know. I know Nixon tried to impound funds and that didn't work. I think it was defeated in the courts. But he also had some money he never spent when his term was over.
There are two main tools governments use to get to a desirable level of inflation: monetary and fiscal. Monetary policy involves shrinking (or expanding) the monetary supply using interest rates, and is largely the purview of the Fed. Fiscal policy involves cooling (or heating) the economy using levels of taxation and spending. Cutting taxes and raising spending are expansionary, and can increase inflation; the reverse are contractionary, and can mitigate inflation.
Yah, the Fed I'm familiar with, the interest rates part and the expansion and contraction. If we forgot the lessons, the GFC underscored it all. I'm hoping the Fed can remain independent. I think Trump may get a little bit of sway, I'm hoping not much.
Since neither party wants austerity (no, Trump doesn't actually want to materially reduce government spending, the DOGE dreams of his wealthy patrons notwithstanding), fighting inflation mostly falls to the Fed. Since Democrats have a lot of different factions in their coalition with different priorities, it's hard for them these days to manage the potential inflationary impact of their proposals (or it will be, now that Manchin is gone). There's no easy way to do it without ticking off important members of the coalition.
Yes. The more I look at the Dem coalition, the stranger the party gets. I hope you're right about Trump. You really don't want to slow or tank this economy with rapid changes. Ease in. If he does manufacture a crisis, it still depends what he does. If nothing is too outlandish, we may do OK.
