The obtuse narrative about Volcker having slayed inflation is further rooted in the backwards view that economic growth causes inflation to rise, while contraction causes it to fall. As for worker shortages, economic growth is their greatest enemy. It’s a reminder that periods of economic growth are defined by falling prices for a growing number of goods and services. Not only did the central banker regularly leak against the Reagan tax cuts, his focus on “money supply” was doomed to fail no matter what given the globalized nature of money and credit. It’s time for Reaganites to bury a Paul Volcker myth that promotes suffocating an economy in order to save it, and that needlessly besmirches Reagan’s impressive achievements.

Source: Forbes September 16, 2018 13:00 UTC