The event was opened by Florin Cîțu, the Romanian senate president whose free market ideas were a breath of fresh air, coming from a high level politician. He explained how what free markets meant and why he is trying to persuade his colleagues to adopt them. Furthermore, he explained from a personal perspective what has been tried free-market wise and how the process unfolds in when you are in government.
Larry Reed talked about inflation and its connection to the role the central banks play. Cris Lingle continued where Larry left off, emphasizing the folly of the Ph.D. macroeconomists who seem to never accept their faulty assumptions and models. Both Larry and Cris pointed out that what we need to be afraid more than the pandemic crisis is the one that will follow. Although predicting is the hardest part when it comes to economics, Larry did exactly that, predicting the crisis to hit by the end of the year or in early 2023.
The local speakers focused on the relationship between the EU and Romania and the path forward.
Simon Sarevski continued the talk about inflation, explaining how the official numbers are understated, not because of bad intentioned by those who measure but because of the limits of the tools. Moreover, although the central banks have printed so much money since the beginning of the pandemic, part of the blame for inflation has to fall on the fiscal policy, i.e. the overspending ever since the Great Recession which was further accelerated during the pandemic.
We have completely given up on the idea that there are causes and effects. We tell ourselves that we are going to print out $5 trillion but there will be no inflation. We are going to have plentiful and reliable energy, we are going to rely on an authoritarian regime for our energy needs, but the prices are not going to go up. Why? Because we want that to be the case. And although the popular libertarian answer is to blame the government, that is not the case, COVID-19 illustrating this perfectly. It was many of us who asked for more lockdowns and government action because “something had to be done.” We became principled in good times only and pragmatists when crisis comes. It is high time, as Ayn Rand would say, to check your premises because they don’t correspond to reality.
The audience were quite engaged with the speakers, asking what the future holds for the economy, focusing on Romania’s situation. At the same time, they were interested as well in the spillover effects of the war in Ukraine.
FMRS Bucharest – Program
The effects of the current overlapping crises on the global and Romanian economy