Economic blackouts and economic illiteracy

[Da Lat]

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Economic blackouts and economic illiteracy










By Peter C. Earle
Nov. 27, 2025

Only in the world’s richest country -- with the deepest capital markets, the most studied institutions, and the broadest consumer choice -- could tens of millions of people persuade themselves that refusing to buy a cup of coffee for 24 hours constitutes a coherent form of economic protest. These choreographed “blackouts” and “no-shop days” are not movements, they are tantrums. Worse, they are tantrums rooted in a catastrophic misunderstanding of what causes prices to rise, how markets function, and what actually drives improvements in living standards.

The central fiction animating these protests is the idea that prices are set by a shadowy cabal of greedy firms, and that abstaining from consumption -- moreover, briefly and often symbolically -- will somehow teach businesses a lesson. It’s a risible, comic-book conception. Prices have risen over the past half-decade because the Federal Reserve flooded the financial system with trillions of dollars during 2020–2021; because the Federal government spent hand over fist; because regulatory constraints froze supply in housing, healthcare, and energy even as demand surged; because tariffs have raised input costs across global supply chains; and because state and local governments shut down production capacity and labor markets for months on end. Prices increased for both producers and consumers because the underlying structure of costs shifted upward.

To imagine that skipping a trip to Costco or Target “sends a message” is to ignore the actual message policymakers already sent: distort incentives, restrict supply, subsidize demand , and inflation follows. It never ceases to astonish that a population standing amid the widest, most varied consumer markets in human history interprets inflation as a moral failing or a conspiracy, rather than a predictable monetary and regulatory outcome.

At the heart of these protests sits the ever-popular but completely backward belief that profits cause high prices. This reverses cause and effect. Profits are the result of delivering value to consumers; they are the signal that resources are being used efficiently. Remove profits and you remove the incentive to innovate, to take risks, to expand supply, to lower costs, and to differentiate. Ironically, the very things the blackout activists claim to want -- cheaper goods, better services, more competition -- require more profitability, not less. Profit is not the enemy; it is the only mechanism by which firms discover whether they are creating or destroying value. We have ample historical examples of economies run on the premise that profit is unnecessary or immoral: shortages, queues, rationing, low-quality goods, and corruption were their hallmarks from the Soviet Union onward.

Firms do not reprice goods because of a 24-hour dip in transactions -- assuming these protests even generate one, which they generally do not. Inventories are not recalibrated around hashtag activism, and supply chains do not reorganize because people delay buying laundry detergent until tomorrow. If anything, these shoddily conceived protests signal to policymakers that the public has little idea where inflation comes from, thereby making it easier for officials to use monetary policy to paper over political mistakes, knowing the blame will fall on entrepreneurs and retailers instead. It is far easier to accuse Starbucks or Walmart of raising prices out of greed than to grapple with the consequences of a decade of suppressed interest rates, exploding federal deficits, and tariffs that fall directly on American consumers.

What makes all this especially embarrassing is that Americans, of all people, should know better. We live in a nation built on markets, competition, and decentralized decision-making. Our prosperity is not the result of mobilized boycotts or emotional consumer theatrics; it is the outcome of profit-seeking firms allocating capital far more effectively than any bureaucracy ever has or ever will. It is the result of entrepreneurs identifying unmet needs and taking risks. It is the result of millions of consumers exercising choice, rewarding firms that deliver value and starving those that do not.

If Americans want lower prices, the last thing they need are boycotts and other posturing. We need monetary discipline, central bank reform, deregulation, and restraint in government intervention. Until then, these ridiculous protests will continue to reveal themselves for what they are: absurd economic superstitions masquerading as civic engagement. A nation that once understood markets has, in abject ignorance, been reduced to performing rituals against them.


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Link: https://www.americanthinker.com/blog...lliteracy.html





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