Johns Hopkins University economics professor Steve Hanke decimated the Federal Reserve’s sordid record of excusing the inflation crisis on “everything” but its own disastrous policies.
Hanke called out Fed Chairman Jerome Powell for blaming “everything under the sun but money” for the current inflation crisis on the Sept. 7 edition of Yahoo! Finance. Powell notoriously claimed that the skyrocketing inflation that has plagued the American economy since 2021 would be “transitory.”
Hanke embarrassed Powell again on Twitter: “Fed Chair Powell is trying to convince the public that inflation was caused by anything OTHER THAN an increase in M2.” Hanke continued: “NEWSFLASH: There has NEVER been sustained inflation in the world unless it was preceded by a significant INCREASE in the MONEY SUPPLY.”
Fed Chair Powell is trying to convince the public that inflation was caused by anything OTHER THAN an increase in M2. NEWSFLASH: There has NEVER been sustained inflation in the world unless it was preceded by a significant INCREASE in the MONEY SUPPLY.https://t.co/YrYsb0Z4Vj— Steve Hanke (@steve_hanke) September 8, 2022
The money supply, also referred to as M2, skyrocketed to over $21,000,000,000,000 in July, according to the Federal Reserve Bank of St. Louis. Just two years earlier in July 2020, when Donald Trump was president, the money supply was roughly $18 trillion, meaning that the money supply ballooned by over 16 percent in just two years.
Powell has repeatedly shirked responsibility for the inflation crisis during congressional testimony, most recently during an Aug. 26 speech in Jackson Hole, Wyo., Hanke said. Hanke ripped Powell for allegedly insinuating “that the money supply really didn't have any connection with economic activity.”
Even in his Jackson Hole speech, “Chairman Powell never admitted that he understood where inflation was coming from, and he never mentioned the money supply,” Hanke said.
That didn’t stop Powell from claiming in that same Jackson Hole speech that “central banks can and should take responsibility for delivering low and stable inflation,” per the Fed’s transcript of Powell’s remarks. It remains a mystery how Powell can take responsibility for solving inflation when he has “been trying to convince us that inflation is caused by something else besides growth in the money supply,” as Hanke explained.
Money supply has decreased over the last five months, Hanke said, but that is also a major danger because the “Fed is not looking and not cognizant of this huge decline or flattening of the money supply growth.” As a result, he predicted that there will be “a whopper of a recession coming next year.”
Powell has a long history of making tone-deaf statements on inflation. The Fed Chairman said the following during a European Central Bank annual policy forum in June: “We now understand better how little we understand about inflation,” drawing audience laughter.
Conservatives are under attack. Contact ABC News 818-460-7477, CBS News 212-975-3247 and NBC News 212-664-6192 and demand they report on Chairman Powell blaming “everything under the sun” but his own decisions on the inflation crisis.