A word of caution. There is DELFLATION and Disinflation. What they are yammering about is disinflation. Or slowing inflation. DEFLATION occurs in times like Hoover’s/FDR’s series of recessions where idiotic government policies send prices collapsing. Like FDR’s Henry Wallace who ordered the slaughter of millions of hogs to drive down prices. It worked but had a snowball effect on the economy.
Wallace ordered the slaughter of pigs to alleviate “overproduction,” which he saw as the reason for prices dropping too far and fast. His goal was to increase spending power to farmers by raising the price of agricultural goods, ie decreasing supply in the supply/demand equation.
Uh, no.
Luskin is talking about deflation.
And he knows the difference between deflation and disinflation.