1) Yes, We Have No Bananas

We highlighted in Friday's Hotline the many consumer items that are falling in price - hotels, airline flights, pork chops, cell phones, etc.  

Now let's look at where prices have risen the most. Here's a list:

What do these products have in common? The majority of these high inflation items were hit with tariffs that were as high as 50%. That list includes coffee, beef, frozen fish, jewelry, bananas, and flowers.

We have here a useful real-world economics lesson: Tariffs don't cause overall inflation - as an overall increase in the CPI is a result of too much money - but they do cause relative price increases.  We know this to be true because to alleviate the negative effects of the beef and coffee price hikes, Trump recently slashed or suspended the tariffs.  

2) Trump 2.0: 129 Regs Killed for Every New Regulation

Trump has often said he wants to be the "deregulation president," and he's well on his way. Since the start of the year agency chiefs have been silently, but productively, slashing costly and cumbersome federal rules and regulations. There have been hundreds of rule reversals ranging from killing electric vehicle mandates, to ending racial preferences in hiring, to allowing hundreds of thousands of more acres of federal lands to be open for mining and drilling to canceling the bogus EPA climate change "endangerment finding."

We can only guess that the economy-wide savings from these deregulation efforts will be well into the hundreds of billions of dollars. What a great way to make America great again.

3) The Future Is Plastics

Christmas spending is at a pace to shatter all records this year, topping $1 trillion for the first time - so much for the "affordability crisis." About two thirds of those sales will be on credit or debit cards.

Congress will make a big play next year to place federal price controls on credit cards in a purely symbolic attempt to lower consumer costs.  

Here we have the classic second kick of the metaphoric mule.

The first was when Senator Dick Durbin of Illinois authored the amendment to Dodd-Frank in 2010 that put price controls on debit cards. That flopped miserably.  It made debit rewards programs disappear and account fees rise sharply with no real savings for consumers at the cash register.

In response to the debit price controls consumers in large part shifted to using credit cards, which continued to offer rich rewards programs.

Absurdly, the lesson Durbin and many pols learned from this failed experiment is that price controls should be extended to credit cards, too.  

It's a terrible idea. Everyone benefits from the ease of flashing or tapping a card at the cash register. Consumers don't have to carry cash. Retailers get increased sales. Credit card companies make money by facilitating the ease of transactions.

A new study from the left-leaning Progressive Policy Institute finds that nearly everyone now has a credit card - all incomes and all races. This is a modern day free-market success story.

Washington keeps trying to fix things that aren't broken.

4) Argentina Proves Academic Economists Wrong Again

By the way, Piketty is one of the lead leftist economists who advises the Left on economic and tax policy. His soak-the-rich book written with Emmanuel Saez endorsed tax rates as high as 83% and became an international sensation. It's no doubt on the top of Zohran Mamdani's reading list.

No matter how repeatedly wrong these celebrity "scholars" are, they are never laughed out of the faculty lounges.

5) The AI That Stole Christmas

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