Inflation is not easy to fix. Most government solutions fail | Opinion
How do countries control inflation? The answer is: very badly. The misunderstanding of money that leads governments and central banks to devalue currency too often means they’re ill-equipped to put the Inflation Genie back in the bottle. History is littered with attempts to end monetary disasters that have failed and frequently made things worse.
Often, that something is pressuring businesses to lower prices, or getting people to spend less money. These strategies never work. Price controls are another favorite method, often accompanied by threats and shaming from authoritarian regimes. Turkey’s strongman President Recep Tayyip Erdoğan responded to rising food prices resulting from a sliding Turkish lira by blaming foreign “food terrorists” he claimed were working with international speculators. He called on citizens to report food sellers who were “bullying” consumers, and ordered price inspections of food shops and warehouses.
a wide range of products including corn flour, car parts and children’s toys. The government sent a small army of price inspectors armed with central bank data in pursuit of supposed price gougers. After further devastating the nation’s economy, the controls were eventually relaxed. Meanwhile, the government keeps printing money to help fund its soaring salaries, which went up at least 60-fold in one year alone.
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