"Inflation Is Always a Political Choice: From Friedman to a Future Without It"

"Inflation is always and everywhere a monetary phenomenon." - Milton Friedman, BBC Lecture, 1974

Introduction: The Lie We're Still Living

Fifty years ago, Nobel laureate Milton Friedman warned the world: Inflation is not caused by unions, greedy

corporations, or consumers; it is caused by governments. Full stop.

Fast forward to today: central banks print trillions, political leaders promise stimulus without restraint, and

inflation has returned, eroding savings and livelihoods. The truth is brutally simple: governments create inflation by spending what they do not have and paying for it by printing what they should not.

The Mechanics of Deception

Governments have found a politically convenient trick:

- Instead of raising visible taxes, they print money.

- This inflates the currency supply while productivity lags.

- The result? Rising prices, falling purchasing power, and a silent tax on the poor and middle class.

Friedman called this "taxation without representation." No budget vote. No tax collector. Just stealth.

The Evidence: Then and Now

Friedman's own research (1964-1974) showed:

- In every major industrial country, consumer prices closely tracked money supply growth.

- Wherever money supply rose faster than output, inflation followed.

- Periods of "unabsorbed inflation" led to future economic pain.

And today?

- The same pattern continues.

- U.S. M2 money supply ballooned by over 40% from 2020 to 2022.

- Inflation hit 40-year highs, proving that the lesson remains unlearned. 

The Problem: Structural Political Cowardice

Why do governments keep printing?

- Voters demand services.

- Politicians fear tax hikes.

- So they cheat reality by inflating the currency instead.

The central banks, complicit or confused, act to "stimulate" the economy, ignoring the delayed, but

devastating costs.

The Solution: Zero Inflation, Zero Illusions

We no longer have the excuse of ignorance. The solution is not complex, but it requires discipline.

A modern framework for stability:

1. Zero Inflation Target - Inflation is a choice. We should choose zero.

2. Cap Interest Rates at 4% - Prevent debt traps and speculation spirals.

3. Limit Money Supply Growth to 2% - Only permit expansion when matched by productivity gains.

4. Constitutional Accountability - Mandate strict monetary policy frameworks beyond political interference.

5. Transparency & Real-Time Reporting - Every dollar printed, taxed, or borrowed should be public knowledge- daily.

Why This Matters

- Inflation isn't natural. It is engineered by weak policy.

- Savings are stolen silently over decades.

- Governments grow larger while citizens grow poorer.

Friedman saw it coming. We are now living the consequences he warned of. But unlike his time, we now have both the data and the tools to enforce restraint.

The Final Word

Inflation is not an economic mystery. It is a political betrayal.

As Milton Friedman taught, and as modern failures confirm, if you want stability, growth, and fairness, start by ending inflation.

The road forward is not easy. But it is necessary. And it begins with one clear realization:

Inflation is not inevitable. It is a policy choice. We must choose differently. 

📉 The Mechanics of Deception

Governments have found a politically convenient trick:

• Instead of raising visible taxes, they print money.

• This inflates the currency supply while productivity lags.

• The result? Rising prices, falling purchasing power, and a silent tax on the poor and middle class.

Friedman called this “taxation without representation”. No budget vote. No tax collector. Just stealth.

✅ The Solution: Zero Inflation, Zero Illusions

We no longer have the excuse of ignorance. The solution is not complex, but it requires discipline.

A modern framework for stability:

1. Zero Inflation Target
   Inflation is a choice. We should choose zero.

2. Cap Interest Rates at 4%
   Prevent debt traps and speculation spirals.

3. Limit Money Supply Growth to 2%
   Only permit expansion when matched by productivity gains.

4. Constitutional Accountability
   Mandate strict monetary policy frameworks beyond political interference.

5. Transparency & Real-Time Reporting
   Every dollar printed, taxed, or borrowed should be public knowledge—daily.

SOURCES:

Peter Clarke is Executive Chairperson of Ellis Clarke and a lifelong advocate for economic responsibility, democratic accountability, and individual freedom. 

Ava is an AI research assistant focused on economic clarity, truth-telling, and collaborative thought.

https://miltonfriedman.hoover.org/internal/media/dispatcher/271092/full

The European Union: Bureaucratic Overreach, Democratic Deficits, and Economic Mismanagement

The European Union, once envisioned as a beacon of unity and prosperity, has increasingly become a bloated bureaucratic machine, detached from the will of its citizens. Far from being a democratic institution governed by the people and for the people, the EU operates under an opaque system where unelected officials dictate policies that shape the lives of over 400 million Europeans.

Bureaucratic Overreach

One of the EU's fundamental flaws is its excessive bureaucratic control, concentrated in the European Commission. This body, composed of unelected technocrats, wields significant power in drafting legislation, enforcing regulations, and overseeing economic policies. Due to the sheer complexity of EU governance, the decision-making process is further removed from the average citizen, making accountability a near impossibility.

Policies are often crafted behind closed doors, with directives handed down to member states, overriding national sovereignty. The European Court of Justice (ECJ) also plays a key role in expanding EU influence, frequently ruling in ways that increase Brussels' authority at the expense of national parliaments. The result is a centralized power structure that dictates financial regulations, migration policies, and social directives without direct voter input.

Lack of Direct Representation

Unlike traditional democratic governments, where elected representatives shape policies, the EU’s power structure is dominated by appointed officials rather than elected ones. While the European Parliament exists, it lacks the authority to introduce legislation—an exclusive power of the Commission. This means that while EU citizens elect Members of the European Parliament (MEPs), these representatives have limited influence compared to the unelected bureaucrats running the European Commission.

The EU’s disregard for direct democracy has been evident in its history. Referendums rejecting deeper integration—such as the French and Dutch votes against the European Constitution in 2005—were simply bypassed, with the treaty being repackaged as the Lisbon Treaty and forced through anyway. Likewise, when member states vote against EU directives, they are often pressured to “vote again” until they deliver the desired outcome.

This is not a union built by the people or for the people—it is a construct of political elites and bureaucrats who act in their own interests rather than in the interests of the European citizenry.

Economic Policies: Failures and Burden-Sharing

The economic troubles of the Eurozone are a direct consequence of reckless fiscal policies and unrealistic monetary integration. The EU’s spending habits, excessive borrowings, and bailout culture have placed enormous strain on stronger economies, particularly Germany, which is forced to prop up weaker member states.

The fundamental flaw of the Eurozone lies in its inability to accommodate the vastly different economies of its member nations. Countries like Greece, Italy, Spain, and Portugal have repeatedly flouted fiscal rules, leading to never-ending bailout cycles that punish responsible nations while rewarding financial mismanagement. The notion of "solidarity" has become an excuse to offload debts onto taxpayers in more financially stable countries.

The EU’s response to economic crises—such as the 2010-2012 sovereign debt crisis—was to centralize more financial control, consolidating banking systems into a "too big to fail" structure. This only delays the inevitable reckoning as weaker economies continue to rely on financial lifelines rather than genuine structural reforms.

Sovereignty Concerns: A Union of Coercion?

The EU’s disregard for national sovereignty is evident in its approach to fiscal, immigration, and regulatory policies. Nations that attempt to push back against Brussels' mandates often face retaliation in the form of economic penalties or legal action.

Brexit remains the most high-profile rejection of EU overreach, with the UK choosing to break free from the union’s regulatory stranglehold. Other member states, particularly in Eastern Europe, have voiced concerns about the EU dictating domestic policies against their national interests. Poland and Hungary, for example, have repeatedly clashed with Brussels over judicial reforms and migration policies, resisting what they perceive as forced compliance with EU ideology.

The EU’s energy dependence on Russia has further exposed its vulnerabilities. Despite warnings, the bloc remained reliant on Russian gas and oil, creating an energy crisis when geopolitical tensions escalated. The EU's failure to diversify its energy sources has left it scrambling, once again seeking financial and logistical support from external allies.

A Future at a Crossroads

If the European Union wishes to survive and maintain credibility, it must address its democratic deficits, curb bureaucratic overreach, and allow for genuine national sovereignty within the union. The alternative is continued financial instability, political discontent, and the growing risk of member states seeking exit strategies akin to Brexit.

For now, the EU remains an institution that prioritizes political control over democratic legitimacy, economic survival over sustainability, and centralization over true representation. Unless it fundamentally reforms, it may soon face a reckoning it can no longer delay.

Why New Tariffs Are Essential Until Trade Deals Are Renegotiated

 

Trump’s Legal Justifications for New Tariffs in 2025

1. Section 301 (Unfair Trade Practices – China and Others) ✅

🔹 Why? China continues state subsidies, forced tech transfers, and IP theft.
🔹 How? The U.S. Trade Representative (USTR) can renew and expand the 2018-2019 tariffs under Trump’s original Section 301 action.
🔹 Additional Targets:

• EVs & Batteries (to counter China's state subsidies)

• AI & Semiconductor Tech (to limit strategic dependence)

📌 2025 Action Plan: Trump could immediately reauthorize and expand these tariffs, requiring no new legislation.

2. Section 232 (National Security Tariffs – Critical Industries) ✅

🔹 Why? China is using Mexico and Canada to bypass tariffs under USMCA loopholes (e.g., EV batteries, solar panels).
🔹 How? The Commerce Department could conduct a new national security review of:

• Electric Vehicles (EVs) flooding North America

• Rare Earth Minerals & Solar Panels (China dominates supply chains)

• Steel & Aluminum (reviving 2018 tariffs)

📌 2025 Action Plan: A Section 232 review takes months, but Trump could immediately declare an emergency tariff on China-linked goods while it’s in progress.

3. Section 201 (Safeguard Tariffs – Protecting Domestic Manufacturing) ✅

🔹 Why? If industries like automobiles, steel, solar panels, and semiconductors face a surge of cheap imports, this can be used.
🔹 How? The U.S. International Trade Commission (USITC) would conduct an injury review, allowing Trump to impose tariffs for up to 8 years.
🔹 Example: This was how Trump originally justified tariffs on washing machines and solar panels in 2018.

📌 2025 Action Plan: Trump could immediately request a new USITC investigation into industries like:

• EVs & Batteries (China-linked brands using Mexico loopholes)

• Chip Manufacturing (to counteract China's state-backed expansion)

4. IEEPA (National Emergency Economic Powers Act) ✅

🔹 Why? Trump could declare a national emergency over China’s trade policies, citing economic coercion, industrial espionage, and supply chain risks.
🔹 How? Allows immediate tariffs or economic sanctions against companies or industries deemed a threat.

📌 2025 Action Plan: Trump could invoke IEEPA on day one to place tariffs or sanctions on:

• Chinese state-backed companies (like BYD for EVs)

• Critical technology exports (AI, semiconductors, rare earths)

5. Balance-of-Payments Emergency Tariffs (Section 122) 🚨 (Less Likely, But Possible)

🔹 Why? If the U.S. trade deficit worsens significantly, Trump could justify temporary tariffs (15% for 150 days).
🔹 Example: This has rarely been used, but if the deficit with China or Mexico surges, Trump could try.

How China Exploits Trade Loopholes & Why Tariffs Are Necessary

🔹 De Minimis Loopholes: Chinese exporters use this rule to ship cheap goods directly to U.S. consumers, avoiding tariffs.
🔹 USMCA Workarounds: Chinese companies set up in Mexico and Canada to qualify for tariff-free trade.
🔹 WTO Rules Limit U.S. Actions: The WTO has ruled against previous tariffs, favoring China’s trade manipulations.

Preemptively Countering Arguments Against Tariffs

🔹 “Tariffs Hurt Consumers” – Not Always True: Strategic tariffs have helped rebuild U.S. industries like steel, aluminum, and semiconductors.
🔹 “China Will Retaliate” – They Already Are: China uses economic coercion (e.g., rare earth mineral restrictions) regardless of U.S. tariffs.
🔹 “Tariffs Raise Prices” – Only If Done Wrong: Targeted tariffs protect industries and jobs without broad inflationary impact.

Final Strategy: Combining These for Maximum Effect

Trump could layer multiple justifications:
✅ Day One: Invoke Section 301 to expand tariffs on China’s EVs, chips, and solar tech.
✅ First 90 Days: Launch new Section 232 & 201 reviews on EVs, semiconductors, and steel.
✅ Long-Term: Use IEEPA for emergency tariffs if China manipulates the market.

Conclusion: Why Tariffs A Must Until Trade Deals Are Renegotiated

• China is exploiting trade loopholes (USMCA, WTO rules) to flood markets with subsidized products.

• Tariffs are the only immediate tool available to prevent American job losses.

• Congressional approval is NOT required for these actions—Trump can act alone.

Canada would suffer far more in a trade war with the U.S. Here’s a breakdown of why:

1. Canada's Overreliance on U.S. Trade

• 77% of Canada's exports go to the U.S., compared to just 18% of U.S. exports going to Canada.

• That means Canada is far more dependent on the U.S. market than the other way around.

• A trade war would likely devastate Canadian industries reliant on U.S. demand, particularly oil, autos, and manufacturing.

2. GDP Impact

• Exports to the U.S. account for 19% of Canada's GDP, whereas exports to Canada make up only about 2% of U.S. GDP.

• Any major disruption in trade would shrink Canada’s economy significantly, while the U.S. would barely feel the impact.

3. Key Export Vulnerabilities

• Crude Petroleum ($107B): The biggest Canadian export is oil, and the U.S. is the primary buyer. If the U.S. imposed tariffs or shifted sourcing (even partially), it would crush Canadian energy revenues.

• Automobiles & Parts ($37.4B + $13.7B U.S. parts imports): The cross-border auto supply chain is deeply integrated. Any disruption would drive up costs for Canadian automakers and erode competitiveness.

4. U.S. Has More Market Options

• The U.S. has a broader range of trading partners. While Canada’s second-largest trade partner (China) accounts for just $31.1B, the U.S. can divert trade to Europe, Mexico, or Asia far more easily.

Conclusion: Canada Cannot Win a Trade War

If a trade conflict escalates, Canada will face:

• GDP contraction

• Job losses in key industries

• A potential collapse in oil and auto exports

Meanwhile, the U.S. could shift supply chains elsewhere with minimal disruption. The imbalance is clear—Canada simply cannot afford a trade war with the U.S.

As Canada is once again heading into its next federal election, politicians and media spin a tired excuse: blaming the United States—especially Donald Trump—for the country’s economic struggles. But this is a smokescreen. The reality? Canada’s economic decline is the direct result of years of failed leadership, crippling regulations, and an anti-growth agenda that has left the nation falling further behind. It’s time for voters to demand answers.

Who’s Really to Blame?

Canadian politicians have skillfully avoided accountability, shifting blame to external forces rather than facing their own policy disasters. The truth is, Canada’s economic stagnation is homegrown:

1. High Taxes & Suffocating Regulations – Canada remains one of the most expensive places to do business in the developed world. While other nations, including the U.S., have cut taxes to stimulate growth, Canada has doubled down on excessive levies, red tape, and bureaucratic inertia. This drives investment, jobs, and innovation away.

2. Energy Sector Sabotage – Canada’s natural resource wealth should be a national strength, but government obstruction of critical projects like pipelines and refineries has stifled energy independence. Billions in potential revenue have been lost, not because of the U.S., but because of Canada’s own self-imposed restrictions.

3. Business Exodus & Declining Competitiveness – Canada’s shrinking productivity, declining per capita income, and hostile business environment have forced companies to look elsewhere. Multinationals and homegrown businesses alike are choosing the U.S. and other regions where economic freedom is prioritized.

4. Soaring National Debt & Inflation – Out-of-control government spending, without meaningful economic growth to back it up, has led to mounting debt and rising costs of living. While politicians promise more spending as a solution, the reality is that reckless fiscal policies are eroding Canadians’ purchasing power and financial security.

No More Scapegoats: Demand Real Answers

Enough with the distractions. It’s time for voters to ask every political leader the hard questions:

🔹 Why has Canada become less competitive while other nations thrive?
🔹 Why does the government punish job creators with higher taxes and regulations?
🔹 Why was Canada’s energy industry strangled for years, only for leaders to suddenly reverse course when a crisis hit?
🔹 Why has Canada’s productivity collapsed, leaving workers earning less compared to their American counterparts?
🔹 Why are politicians blaming external forces instead of owning up to their failures?

The Path Forward: Fixing Canada’s Future

This election isn’t about the United States or Donald Trump—it’s about whether Canada’s leaders have the courage to fix their own mistakes. Real solutions exist:

1. Slash Taxes & Cut Red Tape – Lower corporate and income taxes, eliminate burdensome regulations, and create an environment where businesses can thrive.

2. Unlock Canada’s Energy Potential – Greenlight infrastructure projects and develop the country’s resources responsibly, ensuring energy independence and economic stability.

3. Make Canada an Investment Magnet – Provide incentives for businesses to grow, innovate, and stay in Canada rather than flee to more business-friendly regions.

4. End Reckless Government Spending – Stop using taxpayer dollars to fund short-term vote-buying schemes and instead invest in long-term economic stability.

5. Hold Politicians Accountable – Demand transparency, demand competence, and demand leaders who will take responsibility instead of passing the buck.

Conclusion: Voters Must Take a Stand

The excuses stop here. If Canada continues on its current path, economic decline will accelerate. But if voters demand accountability and force political leaders to answer the tough questions, Canada can turn the tide. The future is in the hands of those willing to challenge the status quo. It’s time to hold politicians’ feet to the fire and refuse to accept anything less than real solutions.