Are “Free Trade” & “Monopoly-Is-Okay” the Cause of Our Current Inflation?

America is experiencing inflation, and Republicans are saying it’s because Democrats want to help out average Americans instead of just attending to the wants and desires of billionaires and the fossil fuel industry, as we’ve been doing since 1981.

In fact, most of today’s inflation was set up by Ronald Reagan when he kicked off the turn of our government from Keynesian to neoliberal economic policies in 1981. Without his neoliberal “free trade” and “monopoly-is-okay” policies we wouldn’t be experiencing most of it.

First off, inflation is typically caused by one of two things (or a combination of both): demand exceeding supply of goods/services or a devaluation of a nation’s currency by “printing money.”

That “printing money” part is the one everybody seems to understand because it’s been relentlessly pushed by gold bugs since Nixon closed the gold window in 1971. In theory it happens when a country “prints” or brings into being more money than it normally would to just keep up with a growing economy, but it’s extremely rare.

The money supply of a country typically grows as a country’s economy grows, and shrinks when the economy shrinks as happened during the Republican Great Depression. In addition, governments are fond of having around a 2 percent per year rate of inflation so they can pay off their debts with cheaper dollars (which is the source of most of the gold folks’ complaints).