OPINION:
By most counts, 2021 turned out to be another miserable year. COVID-19 is still with us, inflation soared, the foreign policy establishment got everything wrong, particularly, Afghanistan, and on some days, President Biden appears to have a vague understanding that he is president. But here we are at year’s end, and most of us are still alive — that is why it is important to look at the good news so that we are not depressed for the holidays.
Perhaps the best news was that the Cuomo brothers managed to self-destruct so America will no longer have to suffer from their hypocritical sermonizing about how much better they are than the rest of us.
The annual “State of the Polar Bear Report” was released early in the year, leading off with the comment: “Celebrate the fabulous news that polar bears had yet another good year.” According to the principal author of the report, Dr. Susan J. Crockford, much to everyone’s surprise, the bears are now more numerous and fatter (and one can suppose happier) than they have been for decades. Dr. Crockford reports that “less summer ice means more food for the entire food chain, including polar bears.” “Polar bears are more flexible in their habitat requirements than experts assumed, and less summer ice has so far been beneficial rather than detrimental.” (Wait till polar bears find out there is plenty of fish and no income taxes in Florida.) Alas, the good news for the polar bears is bad news for the seals — a yummy food source for the bears. (We take no official position on the polar bear-seal war — while awaiting Mr. Biden to decide which side the U.S. will officially support.)
There is good news from China. It is now using record amounts of coal to generate record levels of electricity, which boosts its GDP. It is also great news for those seeking employment in the coal and power industries that dig and transport coal, and build and operate the many new coal power plants. However, like so many good news stories, there is a negative side effect — increased CO2 emissions — which have more than offset all of the reduction in the emissions in the rest of the world — oh, well!
Speaking of experts, Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen admitted that they were totally surprised that consumer prices are now rising at an almost 7% annual rate and producer prices at a 10% rate — and the “transitory rise” in prices is no longer transitory. They would not have been surprised if they had been reading this column over the past year, looking over the WSJ editorial page or watching Larry Kudlow, Steve Moore and Art Laffer on Fox. The Fed has several hundred economists working for it (many from the “best schools”), yet its forecast record over the last couple of decades is far worse than most of its private sector peers. In school, the economists at the Fed learn that if the central bank (the Fed) produces too much money, inflation is one of the side effects. The Fed building appears to have a dumbing-down effect on those working there. Fortunately, but often too late, many experience a regeneration of brain cells upon leaving government employment.
The folks in government want you to know that even though many prices such as oil are up 45% and food up 22% over the last year, there are other very important products such as toys, whose prices have been falling, down 27% over the past year. So, if you buy more toys and less gasoline and food, your real income in terms of purchasing power will remain the same.
Economists and others have observed that governments that produce money not fully backed by gold or silver and some other real asset always eventually end up debasing the currency. This is why some of the great economists of the last century, like F.A. Hayek, Ludwig von Mises and Milton Friedman argued for abolishing central banks and allowing the private sector to issue the money. The good news is that there are now many entrepreneurs issuing various cyber (e.g., BitCoin) and other currencies without asking for government permission. As inflation grows, more and more people will start using private monies, and the central banks will eventually wither away as people abandon their inferior products.
The explosion in information technology, combined with the internet, increasingly allows people to avoid stifling government rules by doing “workarounds.” Banks are losing market share partly because of over-regulation, but endless new “fintech” companies are finding better, faster, cheaper and less regulated ways of providing desired financial services.
There is an explosion in new medical technology — including tools, devices, drugs and information — which will make medical care better and less expensive. Government regulation has slowed innovation and patient service — but it is increasingly cost-effective for providers to go their own way without government officials sitting on their heads. IT allows increases in the ability of companies to find new uses for old drugs. For instance, a new large study by the highly regarded researchers at the Cleveland Clinic discovered that Viagra appears to reduce the development of Alzheimer’s disease by almost 70% — which can only be characterized as good news/good news.
• Richard W. Rahn is chairman of the Institute for Global Economic Growth and MCon LLC.
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