15 Milton Friedman's solid principles to explain why inflation was a key factor in the 2024 election outcome.

Neither at American Leadership nor at our parent company of European Leadership or at our associates like Spanish Leadership we ever talk about politics. Because LinkedIn is a wealth of expertise and respect. Take this article please as a purely technical and macroeconomic analysis

Here are 15 solid reasons, supported by Milton Friedman's principles, explaining why inflation was a key factor in the 2024 election outcome:

1. Time Lag in Monetary Policy: As Friedman noted, there is a 12-18 month lag between changes in the money supply and their impact on inflation. Trump's policies in 2020, such as March 2020 stimulus checks and April 2020 oil production cuts, led to inflation by the time Biden took office, but Trump could argue it was only 1.4% by the time he left. Besides Biden´s ongoing expansionary keynesian fiscal policies only exarcerbated the problem and ultimately did not resolve it, as can be seen here in this AI chart below.

2. Fiscal Expansion: Biden's fiscal expansionary policies from 2021 to 2024, including increased government spending, led to higher inflation rates year after year.

3. Inflation Perception: Voters felt the impact of inflation on their daily lives, from higher prices for groceries to increased housing costs, which influenced their voting decisions.

4. Central Bank Independence: The Federal Reserve's attempts to control inflation through interest rate hikes were seen as insufficient, leading to voter dissatisfaction.

5. Economic Stability: Friedman emphasized that a steady rate of monetary growth could provide economic stability. Voters were concerned about the lack of stability under Biden's administration.

6- Taxation Without Legislation: Friedman's idea that inflation is a form of taxation without legislation resonated with voters who felt the government was not addressing inflation effectively.

7. Private Sector Growth: Voters believed that reducing government intervention and allowing the private sector to grow would help control inflation, aligning with Friedman's views.

8 Debt Reduction: Balancing the budget and reducing national debt were seen as ways to control inflation, as excessive government borrowing can lead to higher inflation.

9. Investor Confidence: Fiscal discipline and a balanced budget can boost investor confidence, which is crucial for economic growth and controlling inflation.

10. Crowding Out Effect: High government spending can crowd out private investment, leading to inefficiencies and higher inflation.

11. Economic Flexibility: Reducing government intervention allows for more economic flexibility, which can help control inflation.

12. Long-term Planning: Fiscal discipline encourages long-term economic planning, which is essential for controlling inflation.

13. Market Confidence: A balanced budget and fiscal responsibility can enhance market confidence, leading to more stable financial markets.

14. Inflation Control: Central banks' efforts to control inflation were seen as inadequate, leading to voter dissatisfaction.

15. Economic Security: Voters were concerned about their economic security and how inflation was affecting their purchasing power, influencing their voting decisions.

These reasons highlight how inflation, as explained by Milton Friedman and the Quantity Theory of Money (QTM), played a significant role in shaping the 2024 election outcome. This quote below was also stated by Milton Friedman in his TV debates with John Kenneth Galbraith

In conclusion, all we hear in the 0.0 mainstream media of TV and videos is just parrot fashion wording without any macroeconomic susbtance at all. Inflation is a macroeconomic monetary phenomenon which cannot be resolved with microeconomic keynesian measures.