Khan v. Bezos, Part II

Commentary Continued from Part I To lower inflation, the Federal Reserve Board raised interest rates in 2022. That raise, intended to reduce the net income of owners of factories and real estate, and thus their ability to spend money, is, then, a tax. By taking money out of productive use at a time when demand is rising, the tax is having the opposite effect: It’s causing inflation. The Fed took a natural phenomenon—a worldwide price rise from a worldwide reduction of supply (from factory lockdowns during COVID-19)—and made the situation worse by doubling interest rates. Reduction of a nation’s money supply reduces inflation, but reduction of a nation’s supply of goods and services, with a doubling of interest rates, causes real price rise....