From: ec1828@somewhere.edu   
      
   I read this story after watching 3--4 hours of Jennifer Burns   
   interviewed by Lex Fridman in his YouTube channel.  Jennifer Burns seems   
   to have written a biography of Milton Friedman and another one of Ayn   
   Rand.  I heard about this article she wrote to the Wall Street   
   Journal---title of this post.  Has inflation ended neoliberalism?  What   
   does she mean exactly?  The story is not deep---it's likely written for   
   people who already understand the subject deep enough.  I'm asking   
   myself now---what is neoliberalism (more exactly)?  Has it ended?  I'd   
   like to understand.  Full article below.   
      
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            How Inflation Ended Neoliberalism—and Re-Elected Trump   
                             Jennifer Burns, WSJ   
                           Nov. 15, 2024 2:43 pm ET   
      
   Do you think we'd have these price increases had there been no pandemic?   
   How much did the supply chain issues impact the rapid rise in pricing?   
      
   At the time, Trump squarely placed the blame on China for this (even   
   naming the virus after them).  Now crickets.  About a year ago, evidence   
   came out in congressional hearings that the US was involved in funding   
   gain of function research in the Wuhan lab that is believed to be the   
   origin of the COVID leak.   
      
   Ergo the US may have helped fund the very lab that caused all this   
   sheet.  If that's the case, perhaps it helps explain why the US gov is   
   no longer talking about the subject? In any event, if I, in fact, caught   
   the virus from China, the least my government can do is allow me to buy   
   a BYD car from them.  They make awesome low-priced EVs!  Woooo   
      
   How Inflation Ended Neoliberalism—and Re-Elected Trump   
      
   In the 1970s, skyrocketing prices spurred free-market reforms that   
   promoted economic stability. In the 2020s, they fueled Trump’s comeback.   
      
   By Jennifer Burns, WSJ   
   Nov. 15, 2024 2:43 pm ET   
      
   Inflation is remaking America—again. It looms above all competing   
   explanations for Donald Trump’s comeback. Despite the widespread belief   
   that the worst economic cost of curing inflation—a steep recession—had   
   been avoided, it turned out the political price had yet to be paid.   
      
   The power of inflation to destroy a political establishment emerged   
   clearly in the 1970s, when a decade of rising prices transformed   
   American society and politics. High rates of inflation ushered in an age   
   of neoliberal economic policies focused on free markets, free trade and   
   globalization. Mr. Trump’s election, to be sure, marks a repudiation of   
   this consensus. But ironically, this final break from neoliberalism came   
   because both left and right ignored its signal achievement: decades of   
   stable prices that insulated our fractious democracy from the pressures   
   and strains that today threaten to tear it apart.   
      
   John Maynard Keynes said the best way to overturn “the existing basis of   
   society” was to debauch the currency—wisdom he attributed to Vladimir   
   Lenin. The 1970s illustrate his point. While the rest of us think of   
   disco, wide ties and Richard Nixon, economists know this decade as “the   
   Great Inflation”—a steady and sustained rise in prices for nearly a   
   decade, at a rate that in some years exceeded 10%. Not coincidentally,   
   the decade also saw the dawning of globalization, financialization,   
   accelerating inequality and a powerful new taxpayer politics, all of   
   which can be traced directly to the rise in prices.   
      
   It was America’s inability to control inflation that shattered Bretton   
   Woods, the postwar currency system that bound the major trading nations   
   together, ushering in a new era of globalization. Central to Bretton   
   Woods were fixed exchange rates and capital controls, both of which gave   
   governments considerable leeway over foreign investment and trade. The   
   system couldn’t hold as the U.S. dollar inflated and lost value. Under   
   Bretton Woods, other governments could trade their dollars for gold, and   
   they did so with increasingly frequency. Fearing the Treasury would run   
   out of the precious metal, Nixon slammed the gold window shut, killing   
   Bretton Woods in the process.   
      
   Instead of a managed, regulated currency system, the U.S. and the rest   
   of the world moved to a regime of floating exchange rates, in which   
   currencies traded against one another in global capital   
   markets. Emerging alongside new computing technologies, this new system   
   of fluid currencies accelerated globalization and underwrote the first   
   serious challenges to U.S. manufacturing from abroad.   
      
   At the same time, pervasive inflation meant skyrocketing interest rates,   
   which pushed the economy toward financialization and simultaneously   
   deepened inequality. Because it was easier to earn interest from   
   accumulated capital than reinvest in factories and infrastructure, major   
   corporations turned away from manufacturing and toward financial   
   markets. The CEO of U.S. Steel, once a linchpin of American industry,   
   announced that it “was no longer in the business of making steel” but   
   “in the business of making profits.”   
      
   In 1980 Congress hastened this process, along with sweeping deregulation   
   of the financial system, by passing the Depository Institutions   
   Deregulation and Monetary Control Act. This wasn’t the brainchild of   
   free-market economists or the Reagan administration. Rather, the   
   legislation was signed by Jimmy Carter and drafted in response to   
   complaints from consumer advocates and commercial banks, which chafed   
   against interest-rate caps. They pointed out, and rightly so, that the   
   wealthy were able to benefit from high interest rates by using private   
   banks and sophisticated investment vehicles.   
      
   Financial deregulation in this context was a move toward equality. Yet   
   in the end, financialization mainly benefited financiers. Along with   
   globalization, it pushed the U.S. economy toward the FIRE industries   
   dominated by educated professionals—finance, insurance and real   
   estate—and away from the stable manufacturing jobs that predated   
   inflation’s rise.   
      
   California residents gather in support of Proposition 13, 1978.   
   Photo: Sygma via Getty Images   
      
   In turn, this rising inequality ignited a populist reaction: the tax   
   revolt of the late 1970s, epitomized by California’s Proposition 13 in   
   1978. This was a fierce new homeowner politics that, like the push for   
   financial deregulation, stemmed from a mismatch between existing policy   
   and the new era of inflation.   
      
   Property taxes in many states tracked assessed value, calculated   
   annually. When prices were steady, these taxes were predictable and   
      
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   --- SoupGate-DOS v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)