George Bresiger over at Mises hits the ball out of the park with this post. All of this oil industry finger pointing, all of the spikes in inflation hedges, all of the criticisms against hedge funds, and the slow, steady drumbeat heard for more protectionism, more tariffs, more controls, are all a direct result of George W. Bush's economic policies... which for the most part, are the economic policies of Richard Milhous Nixon.
It is a long post, but I commend it to all A9 readers. The Mises blog, a favorite of A9 blogger Mitya K., always delivers exceptional work, but this essay is one of their best. I'll give some highlights below, but please, read the whole thing for yourself and let George know you appreciate his work.
Like I said in the intro, this post links all the things you're seeing happening right now into a cohesive whole, with the benefit of being one of the simplest explanations available... To pay for war governments inflate the economy and steal what they need to afford their plans. It is a trick tried a thousand times. Shame on us for not throwing the entire federal government out of their jobs.
The story of price controls begins, as it usually does, in wartime. A government can't pay the bills through direct taxation and tries inflation. Soon, its trading partners and some of its citizens realize what's happening and start dumping its currency. [...]
Inflation and unemployment started to become a problem, with both running at about five percent midway through Nixon's first term in 1970.
There was a run on the dollar as the federal government ran deficits. That was because it was paying for both the Vietnam War and the expanding welfare state by printing money. [...]
While there is always debate about the gold standard, few economists will disagree about the Nixon administration's wage and price controls. They were — as thousands of previous episodes with controls — a disaster. The stock market declined some 50 percent in an eighteen-month period of 1973-74.
Our nation was in a brutal recession through most of 1973-1975. But Nixon, and most of the incumbents in Congress who voted for increased spending, were re-elected. [...]How did a "conservative Republican" administration give the nation wage and price controls? The Nixon administration — like the Bush administration today — was never fiscally conservative. [...]
We should also understand that Bush, like Nixon, cannot resist the political temptation of public-sector spending and various price controls to achieve short-term political goals. Bush, backed into a political corner, may well re-impose wage and price controls. [...]
Nixon's economic problems — like George Bush's — stemmed from his embrace of inflation as an economic cure-all. He increased state spending at the same time that he pressured the chairman of the Federal Reserve Board to expand the money supply.