Jimmy Carter’s Grim Lesson for Joe Biden
Joe Biden is even older than I am, so he surely remembers inflation’s searing political costs in the late 1970s: President Jimmy Carter’s loss to a candidate, Ronald Reagan, who promised to align an anti-inflation fiscal policy with the bazookas already firing full force at Paul Volcker’s Fed. What does this mean for Joe Biden? A fundamental axiom of political decision-making is that politicians maximize their own advantage at all times sure as they do so that what’s good for them is also good for everyone about whom they care. Combine the history of the late 1970s with this seemingly-eternal axiom and one knows what Joe Biden will do: he will make his Fed pick based on where he sees his political advantage. If inflation is not proving itself truly transitory by the time this call lands in his hands, even the formidable powers pushing Mr. Powell may not prevail.

M080921.pdf