Scott talks to Bob Murphy about the economic side of all the covid policies this past year. Most obvious are the huge spending bills, which dwarf even the stimulus measures taken after the 2008 recession. Murphy reminds us that this kind of rampant spending really means the federal reserve and the treasury have “created” new money out of thin air. This money enters through the financial sector, slowly making its way through the rest of the economy, where it can cause price inflation, stagnating wages and the loss of the value of savings. But it allows the federal government to spread out the harmful effects of its policies in a way that wouldn’t be possible if it were to raise taxes or borrow the money all at once. Murphy also talks about the way that small businesses have been devastated by lockdown policies, while large corporations have absorbed the losses more easily. These large corporations will survive when the small businesses close, buying up their assets and moving in on what used to be their business. This is yet another way that huge government action benefits big business and the politically connected at the expense of the average business owner, employee or taxpayer.
Discussed on the show:
- “Understanding Money Mechanics” (Mises Institute)
- “Neoliberal Champion Larry Summers Opens Mouth, Inserts Both Feet” (TK News by Matt Taibbi)
- The Great Deformation: The Corruption of Capitalism in America
Bob Murphy is an economist with the Institute for Energy Research, a research fellow with the Independent Institute, and a senior fellow at the Ludwig von Mises Institute. He is the author of The Politically Incorrect Guide to Capitalism and Choice: Cooperation, Enterprise, and Human Action. Find him on Twitter @BobMurphyEcon and listen to his podcasts, Contra Krugman and The Bob Murphy Show.
This episode of the Scott Horton Show is sponsored by: The War State, by Mike Swanson; Tom Woods’ Liberty Classroom; ExpandDesigns.com/Scott; Photo IQ; Green Mill Supercritical; Zippix Toothpicks; and Listen and Think Audio.