Inflation Redux: Hello Weimar

The following is an excerpt of  the original article appearing first and formost on The American Spectator. 

It had to happen. It is almost like an Econ 101 exam question: What happens if you take an economy already in strong upsurge and add to it by pumping trillions — not billions, trillions — of borrowed dollars into it? At the same time, you pay workers not to work, but to stay home and watch reruns of Perry Mason on TV.

They stay home. The meat does not get made. The Russians and the Chinese attack the computers that control meat supply and vegetable supply and restrict output.

So we have a huge uptick in money supply and a contraction in food and cars and dwellings supply.

The classic definition of how we get inflation: too much money chasing too few goods and services.

The solution: rationing by pricing. Restrict consumption by raising the price. Thus we get much higher meat prices.

Astounding potato prices.

And then the super housing crisis, where the price of dwellings rockets up as demand soars and supply cannot be raised except with a year’s delay.

Then there are specialties like car rentals: there is a worldwide shortage of computer chips. Cars and trucks desperately need chips. The rental car companies sold off their fleets at the beginning of COVID-19. Now they cannot replace them. Travel is reviving like an atom bomb. But there are no, and I mean no, cars to be had by the rental car companies.

Hence, cars that used to rent for $50 a day are now $500 a day or more.

Or there just are no cars to be had at any price.

Then the price becomes $600 a day, and magically there are cars to be had.

This is super-inflation.

Weimar Germany-type inflation. Yes, that bad.

Ben Stein is a writer, an actor, and a lawyer who served as a speechwriter in the Nixon administration as the Watergate scandal unfolded. He began his unlikely road to stardom when director John Hughes as the numbingly dull economics teacher in the urban comedy, "Ferris Bueller's Day Off." Read more more reports from Ben Stein — Click Here Now.