There Is No Magic Pricing Fairy with Brian Romanchuk

** Be sure to check the Real Progressives website’s calendar for upcoming events. On Sunday, March 17th at noon ET/9am PT, we’re hosting a webinar, RP Live with Esha Krishnaswamy: Putin’s Russia. On Tuesday evenings, 8pm ET/5pm PT, come to Macro ‘n Chill, where we listen to the most recent episode of this podcast and discuss it with the community. https://realprogressives.org/rp-events-calendar/

“Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” Milton Friedman

This quote by the grandaddy of neoliberal economics is from 1963. Some in the mainstream have been dining out on it ever since.

According to our guest, author and blogger Brian Romanchuk, neoclassical economics relies on mathematical models and fail to capture the complexity of real-world inflation. He highlights the importance of understanding the supply and demand dynamics in setting prices and explains that inflation can be influenced by factors such as supply chain shocks and changes in the labor market.

Brian also points out that it’s not enough to blame inflation on corporate greed; after all, corporations are always driven to maximize profits. He mentions the Cantillon effect, which suggests that the first recipients of newly created money benefit from inflation as prices go up, while the poor and working class bear the brunt of higher prices down the road.

Brian and Steve discuss inflation constraints on fiscal policy. Brian argues that while extreme fiscal policies could lead to inflation, most of the time, fiscal policy is relatively moderate and does not have a significant impact on inflation. They criticize the government for not trying to set prices and argue that the government often follows the private sector's lead, making things worse.

Brian Romanchuk is the author of several books, including Modern Monetary Theory and the Recovery. He is the writer and publisher of bondeconomics.com. His writings can be found in his substack, The BondEconomics Newsletter.

@RomanchukBrian on Twitter