They’re both wrong. Who is? Trump supporters who’ve long defended mindless tariffs, along with economists wisely against mindless tariffs, but who now claim they didn’t really mean what they said about President Trump’s tariffs at the time. 

Take a recent letter-to-the-editor at the Wall Street Journal by economists Scott Burns and Caleb Fuller, professors respectively at Southeastern Louisiana University and Grove City College. Among other things, they write that “Higher import costs give consumers less bang for their buck.” Yes, very true. 

It brings us to the letter’s most important line: “If iPhone prices double because of tariffs, for instance, consumers enjoy less real income. Tighter budgets mean consumers have less to spend on other goods.” Yes, even more true, though perhaps not in the way that Messrs. Burns, Fuller, and most economists want it to be. 

As has been written repeatedly in these columns over the years, and also in my 2022 book, “The Money Confusion,” higher prices are decidedly not the cause of “inflation.” To say they are is like saying suntans cause the sun. Causation is being reversed. Inflation is one thing: a shrinkage of the monetary unit, in our case the dollar, with higher prices to varying degrees (or not) the effect. 

If the price of one good soars for whatever reason, it naturally shrinks the dollars available to purchase other goods. This matters with Messrs. Burns and Fuller top of mind, and economists generally, simply because it’s evident they want it both ways. 

They use the iPhone example to show that they never really meant what they said about Mr. Trump’s tariffs and “inflation,” but by extension why haven’t they and other economists retracted their commentary about President Biden and the “inflation” he and the Democrats allegedly caused? 

With the latter, there was no notable decline in the value of the dollar in 2021-22, which means so-called “Bidenflation” would have to be the first inflation in the history of mankind that occurred sans currency shrinkage. 

Were some prices elevated? Of course they were. Except that it was basic Adam Smith and his pin factory that informed the higher prices. The more hands and machines working together to produce goods, the more plentiful and cheap they are, only for politicians to panic in 2020 on the way to lockdowns that eviscerated the very global cooperation that made goods so affordable to begin with. 

You can’t recreate overnight or over many years what took decades to fashion in the first place, and prices both reflected and reflect this. Except that the effects of command-and-control have nothing to do with inflation.

 It was just higher prices following political panic that sapped global symmetry, and as Messrs. Burns and Fuller are clear about, higher prices for certain goods limit what we can spend on others. Without defending Mr. Biden’s policies, or the Democrats more broadly, their “inflation” quite simply wasn’t. 

Except that a Google search of Messrs. Burns and Fuller doesn’t disclose either saying “Bidenflation” was a myth, but it does unearth Mr. Burns writing about “raging inflation” under Mr. Biden in Keynesian, Lawrence Summers-like fashion, as though governments can introduce new “demand” with their spending. No, they can’t.

Production is the only source of demand, and as governments produce nothing, their spending is an explicit sign that producers (the only consumers) have “less bang for their buck.” Unknown is whether Messrs. Burns, Fuller, and most other economists will now finally admit that “Bidenflation” was nonsensical much as Trumpist commentary about inflation is? Tick tock, tick tock…

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This article was originally published by RealClearMarkets and made available via RealClearWire.