Tony Petroski

Looking for a Volker to Fight the Next Economic Battle

I agree that after the post-election deflation/panic subsides (I recall President Clinton declaring during a mild recession that "this is the worst economy we've seen since the Great Depression"), inflation and then stagflation seems likely. Volker tightened the money supply and caused political pain that was absorbed mostly by President Reagan. What should not be forgotten, because we're going to have to resurrect it, is supply-side economics. Inflation is too much money chasing too few goods. Monetary policy addresses one side of that equation, but you need to create incentives for producers to produce. Obama's formula of soaking the rich and raising taxes on capital gains is precisely the formula that will win him the title of Jimmy Carter II.