Demonizing those who want to fight inflation

OPINION:

Using ad hominem attacks often indicates a weak argument—or no argument at all. Exhibit A: Pundit Matthew Dowd compared those who want to reduce inflation with Adolf Hitler.

Yes, you read that right. Politicians who are promising to do something about the fact that ordinary Americans cannot afford gas and groceries in the same week, or are struggling to pay their rent and their prescriptions each month, are basically like the Nazis, according to Mr. Dowd. Why? Because, Mr. Dowd said, the Nazis also vowed to “do something about inflation.”

As millions of Americans fall into credit card debt and deplete their savings because of inflation, being compared to Hitler adds insult to injury. But Mr. Dowd is also painfully ignorant of history, as his accusations and comparisons demonstrate. That history is worth remembering because of its fateful consequences.

Contrary to Mr. Dowd’s assertions, Hitler’s rise to power in the 1930s was not so much based on a pledge to reduce inflation as anger over the Treaty of Versailles, although the two were admittedly related in the years immediately following World War One.

The hyperinflation in the Weimar Republic following the war was caused by the government’s inability to pay war reparations to France and Britain. Germany simply printed the money it didn’t have, debauching the currency through inflation and effectively defaulting on its payments.

By the end of the hyperinflation in 1923, prices doubled hourly in a final fatuity. But Hjalmar Schacht, the German financial wizard, stopped the inflation literally overnight by creating a new currency that was effectively pegged to gold, thus restricting the printing of new money, and preserving the new currency’s value.

By the 1930s, the problem of inflation in Germany had been solved for about a decade. Had Hitler made that his primary economic issue, he would likely not even be a footnote in history.

It was not inflation but the mortgaging of Germany to France and Britain via reparations payments which was a necessary ingredient in Hitler’s rise to power. The Fuhrer himself was often at loggerheads with Schacht, the latter of whom refused to pay for Hitler’s military spending through inflation and devaluing Schact’s precious stepchild, the new German currency.

That was a key reason for Schacht’s dismissal, subsequent arrest, and imprisonment in a concentration camp. Hitler was perfectly willing to use any means, including inflation, to achieve his ends.

Schacht, who became Germany’s central banker before his ouster by the Fuhrer, understood that all government spending, whether it was domestic spending or transfer payments to foreign countries, must be paid for with taxes, either explicit taxation or the hidden tax of inflation. The same is true today; inflation is still a method by which the government taxes its citizens.

If you are wondering where the government got the trillions of dollars in excess spending over the last two years, the answer is that the government is taking it out of your hide right now, in the form of higher prices. Every time you pay more to fill your back seat with groceries or your tank with gas, you’ve paid the inflation tax. You are spending more to receive less.

For the average American, paychecks don’t go as far, homes are increasingly unaffordable, and retirement savings have been decimated. Inflation is not a Nazi-centric issue, but a commonsense issue.

Those on the radical left, many of whom espouse the virtues of Communism, increasingly rely on ad hominem attacks, with Hitlerian comparisons now being the go-to assault.

There’s an old saying that when you’re a hammer, everything looks like a nail. The leftist corollary is that when you’re a hammer and sickle, everyone looks like Hitler.

• E. J. Antoni is a research fellow for regional economics at the Heritage Foundation’s Center for Data Analysis.