Why do I feel that I have seen this movie before?
I would like to think that learning is cumulative. But I’m beginning to think that, every generation or two, people need to learn all over again the lessons that have unaccountably been forgotten or tossed aside.
The elderly among us can see this unfolding, even as young people insist that they are experiencing things never before experienced by human beings and that this time will be different.
Let’s take it issue by issue:
* Inflation. The Consumer Price Index for June rose on an annual basis before seasonal adjustment by 5.4%. That’s higher than in May, suggesting that inflation is accelerating. It is far above the 2% annual rate, which is the professed goal of the Federal Reserve. Treasury Secretary (and former Fed Chairwoman) Janet Yellen insists that the jumps in prices are just temporary adjustments to the COVID economy, although she’s extended the period for adjustments, and current Fed Chairman Jerome Powell says he’s not worried and will keep interest rates low.
They’ve got the bond market on their side. But those expressing alarm include not only the Wall Street Journal editorial page but also Harvard economist (and Clinton administration Treasury Secretary) Lawrence Summers. He’s been arguing for months that the Biden administration is pumping too much money into the economy.
Consumers may agree: A New York Fed survey showed they expect a 4.8% annual rise in prices over the next year. As we learned in the 1970s, once people start expecting inflation, they start to feed it, raising prices and boosting wages to keep ahead of the trend.
We know how to get rid of inflation. Federal Reserve Chairman Paul Volcker, appointed by Jimmy Carter and supported by Ronald Reagan, raised interest rates and triggered a steep recession, from which a low-inflation growth economy eventually emerged. Are we ready for that kind of pain again?
* Crime. Calendar year 2020 saw a 25% increase in homicides, the highest since 1960. Higher than in any single year in the 1965-75 decade, when the number of violent crimes almost tripled. They seem to be rising by similar rates this year.
Many people don’t like to admit it, but this is obviously a result of the de-policing movement urged on in Black Lives Matter protests and cheered on by liberal editorial writers, corporate moguls, and Silicon Valley monopolists. They applauded and declared exempt from COVID restrictions the “mostly peaceful” demonstrations against supposed systemic police misconduct. Few if any deplored the 600 violent riots that caused some $2 billion in damage and from which, if the experience of the 1960s is any guide, modest-income neighborhoods will not recover from for decades.
Once again, solutions are visible for those with sufficient memory. The intensive policing tactics of Rudy Giuliani and Bill Bratton in New York during the 1990s, copied and adapted by many others around the country, cut violent crime rates by more than half. Thousands of black lives were saved, and the number of blacks with prison records was actually reduced. Neighborhoods, once neglected and abandoned to criminals, were revived with new jobs and opportunities.
Can that happen again? Maybe if Eric Adams, the former cop, is elected New York’s mayor in November, he can show the way. Or maybe, we’ll have to wait out a couple of high-crime decades, as we did after 1965-75.
* Illegal immigration. Does the United States need 1 million or 2 million new illegal immigrants? The Biden administration apparently thinks so. It has opened the southern border to tens of thousands of supposed asylum-seekers, not just from Central America and Mexico but from Haiti and the Middle East and Africa.
The illegal immigrant population, according to Pew Research, increased from 3.5 million to 8.7 million in the 1990s and peaked at 12.2 million in 2007. It then dropped and leveled off at 10.5 million in 2017.
The 2007-08 recession reduced low-skill immigration over the southern border to zero. Trump administration agreements with Mexico kept it down. As a result, low-skill individuals saw greater percentage wage gains than the rich, even as immigrant inflow became increasingly high-skill. What was so terrible about that?
It may be that these problems will just solve themselves: Inflation will subside, as many economists expect; violent crime will subside, de-policing or no; recent border-crossers will meet their court dates and legalize their status.
But maybe not. In which case, doesn’t it make sense to go back and update policies that worked rather than watch this movie repeat itself at agonizing length?
