The article argues that the Federal Reserve's recent rate hike decision, while justifiable on inflation grounds, highlights a critical lack of an underlying, transparent policy framework. The core problem is that the Fed's decisions appear discretionary, leading to market uncertainty because the committee's judgment, rather than clear data, dictates policy shifts. The author proposes that the Fed adopt a formal monetary policy rule—an algebraic formula linking the target rate to indicators like inflation and unemployment—to replace subjective guidance. Implementing such a rule would provide market predictability, enhance transparency, and shield the Fed from political attacks by making deviations from the standard easily quantifiable.
Note to Bessent and Congressional Republicans: Greedflation Is Still Bad Economics
English Summary
The article argues that the 'greedflation' narrative—which blames corporate price gouging for inflation—is economically unsound. It posits that recent price spikes, such as those in energy, are primarily the result of supply shocks (e.g., geopolitical conflicts like the war in Iran) or excessive monetary and fiscal stimulus. The author contends that market prices reflect true scarcity and opportunity cost, making corporate greed an insufficient explanation for widespread price increases. Policymakers, therefore, must shift accountability away from consumers and companies and instead hold governments and central banks responsible for the policies that generate inflationary pressures.
中文摘要
本文主張「貪婪通脹」（greedflation）敘事——即將通脹歸咎於企業哄抬價格——在經濟學上缺乏根據。文章提出，近期能源等價格飆升，主要源於供應衝擊（例如伊蘭戰爭等地緣政治衝突）或過度的貨幣與財政刺激。作者認為，市場價格反映的是真正的稀缺性與機會成本，因此，將企業的貪婪視為普遍物價上漲的解釋，是遠遠不夠的。因此，政策制定者必須將責任歸屬從消費者和企業轉移開來，轉而追究政府和中央銀行在產生通脹壓力政策上的責任。
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