Sep 18, 2026

Inflation is not rising prices. Rising prices are what inflation does. In this third lesson of a four part economics series, Lawrence W. Reed, president emeritus of the Foundation for Economic Education, walks Jenny Beth Martin through money and inflation from the first coins to the Federal Reserve, and makes one argument the whole way: when a government prints too much money, everything priced in that money goes up, and the grocer who changes the sticker is not the one who did it. Reed starts with what money is, a medium of exchange, a middleman that makes trades possible that barter never could, and why it is different from every other good. Double the supply of shoes and a nation is richer. Double the supply of money and you have only doubled the claims on the same wealth. His coat check ticket makes the point in thirty seconds. Then the history: seashells, wampum, tobacco, cattle and cigarettes; the first standardized coins around 650 BC; Rome pulling the silver out of its coinage; the Constitution's gold and silver clause; and April 1933, when Franklin Roosevelt gave Americans until May 1 to turn in their gold under penalty of a 10,000 dollar fine or ten years in prison. Then the definition. Call inflation rising prices and business gets blamed. Call it an increase in the quantity of money and the question becomes who prints it. Jack Kemp's rule: wet streets don't cause rain. Learn more at teapartypatriots.org and jennybethshow.com.

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