No doubt many voters in the 2024 US election, who in exit polls expressed dissatisfaction with the present state of the economy, had some of these ill effects in mind. But there is no evidence to suggest that they were in the main conceptualizing a link with monetary inflation. When it came to specific questions on inflation the complaint was the cost of living and a related fall in living standards – the latter consistent with malinvestment. There was no direct questioning (in the polls) about dissatisfaction with inflation tax as levied on holdings of money and government bonds. Perhaps there were many offsetting gains whether from asset inflation or falls in the real value of debts.

The general dissatisfaction about the economy has not been sufficient to catalyze the political debate on to a promising monetary track. Rather the Republicans, whether in the Trump Campaign or in Congressional races, in responding to public resentment on inflation put great emphasis on how wasteful spending by the Biden Administration had been the culprit. Never mind that the historical evidence and theory suggests no monocausal link between wasteful spending and inflation, but rather the omnipresence of monetary malaise…….

Yes, the US voters who delivered the guilty verdict on inflation and more widely the economy in 2024 should be cautious about magicians taking up their cause. That includes a Treasury Secretary making budget projections based on long-run economic growth at 3% p.a.. We can expect the Treasury together with the Fed to dismiss as noise “transitory” bad news on consumer price inflation as explained by the supply shock of tariff war. They will resist the monetary tightening which any sound monetary system would empower in the context of such disturbance.

Yes, don’t expect anything different from the Trump administration in terms of monetary policy. if the new secretary of the treasury is such a fan of Abe and his economic policies, we are going nowhere over a long time span. This is not what people wanted or voted for, so we can only expect nothing to happen and our ire to rise.