Arthur Laffer had an op-ed in the Wall Street Journal early this week. I would give you the date but the WSJ online is always missing something.
Laffer did a good job of explaining the trade deficit and the recent decline of the dollar. He got one thing wrong. He gives the Fed credit for keeping inflation near zero.
Wrong Arthur. The Fed doesn’t control inflation, never did. It can only make inflation worse. Look at our stagflation during the time 1976-83 that Japan had none. Our Fed tried to control it. Japan just deflated the yen and had no inflation.
Arthur used a metaphor I love. Referring to investments in third world markets as being as risky as crossing the I-5 drunk and blindfolded at rush hour.
The I-5 is a six to eight lane freeway that runs the length of California with heavy traffic and trucks going 65-80 mph. You can’t cross it on foot at any time, sober or not. The metaphor stands alone as “crossing the I-5 on foot”.