Politicians, and those with political motives, want you to believe inflation is back to stay. They call inflation “theft,” and harp on the size of the national debt.
This is bullshit, and there’s an easy tell.
Markets rose after the government announced prices rose 6.5% in the month of October. Not only did markets rise, but Bitcoin fell. If Bitcoin were the great inflation hedge that’s claimed, it would have skyrocketed.
Prices are up because the pandemic is ending. This created a sudden rush of demand, in areas where demand had been slack. This is especially true in the case of oil and natural gas. I thought they would rise with the pandemic’s end and indeed they did.
But they’re not going to stay up. Oil exporters know it. Bankers know it. Even Exxon Mobil knows it. Those who have profits are handing out dividends and looking for other places to invest that aren’t going away.
We know oil is dying, not just because of climate change, but because of the behavior of electric car stocks. Tesla is now a trillion dollar company. Other electric car plays are rising fast. Electricity is still being made with natural gas. But the cost of harvesting energy, from the air and the sun, is now lower than fossil fuels, and it’s still dropping. Once a machine is in place, backed by batteries, that demand is taken out forever. (If the machine breaks, get a new cheaper one.)
What’s the politics? Besides rooting against the economy, which is run by Democrats, idiots want to kill the Biden social agenda, called Build Back Better. The Chamber of Commerce can see a direct benefit from investing in roads and bridges. They can’t see it from investing in people.
This is short-sighted because it’s people that are driving the economy. If the current market tells us anything it’s just how dominant America is, especially American software. Clouds, and cloud applications, now sit astride the world, and these are overwhelmingly American companies. We’re killing it.
The gating factor to growth in a technology age is also creativity, educated and (more important) empowered human minds. We’re talking all sorts of creativity, not just code monkeys. We’re talking organizational creativity, business creativity, financial and artistic creativity. Even writing creativity. It’s all valuable, made more so as Moore’s Law continues to advance, from nanometers into the Angstrom Age.
Given that economic reality, the best investment any society can make is in people. Bring more creativity to bear on our problems and, if some people can’t keep up, at least keep their costs down. It costs a lot less to give someone a living than to put them in jail. Why not do it, beyond the fact it’s the right thing to do?
Why not? Greed. Ideology. Power and the need to dominate. All the forces that have held mankind back, all the forces threatening to destroy human life on this planet, are now arrayed against new investment in people.
They’re mighty. Can they be beaten?
