Inflation for dummies
Reflecting on all those self-help and educational texts that claim to be for “dummies,” it would appear that one should be published called “Inflation for Dummies” – with free copies sent over to the White House.
Currently, Biden & Co. are peddling the narrative that the current inflation is caused solely by the economy moving back to normal after the Covid Pandemic. They use the words like “transitory” to describe the sudden surge in consumer prices. They continue with that refrain even though Jerome Powell, Chairman of the almighty Federal Reserve – and the primary manager of American monetary policy (meaning handling inflation) says that the word “transitory” is no longer operative. We are in a prolonged inflationary period of indeterminable duration and severity.
In addition to peddling political poppycock regarding inflation, Biden decided to release oil from our national reserves to reduce the price at the pump. Or so he said. What he released was approximately a two-day supply – and as far as I can tell there has not even been a two-day drop in the prices at the pumps. They are still going up.
Let us consider Biden’s claim that the inflation is just a natural temporary phenomenon as the result of coming out of the Pandemic-caused government-imposed recession. The first problem with that theory is that we are not surging out of the Pandemic economy. Of the 8 million jobs that were lost because of the government shutdown, only 5 million have been recovered. Biden brags about producing 5 million jobs, but he never talks about the 3 million job deficit.
Biden is still inhibiting the economy from achieving a full recovery with his calls for mask mandates and mandatory vaccinations – and his restrictions on travel. Whatever you think of them, they are retarding job growth (another abysmal month in November) and growth in the overall economy. In dealing with Covid, Biden pursues one of those one-size-fits-all policies that again prove that federal action is less productive than allowing the states and cities to deal with the Pandemic based on their unique situations.
Not only have we not fully recovered in terms of jobs, but we also have a situation in which the disparity between job openings and available workers is greater than any time in history. The outright refusal of many to return to work is largely due to all that money that has been given to people. The greatest number and percentage of people ever are living off government money of one form or another — that includes those stimulus checks, enhanced unemployment benefits, increase food subsidies and those $300 per child tax credits.
Biden and congressional Democrats are flooding the economy with money – and propose to do more of the same with the President’s Build Back Broker Bill. More money chasing fewer goods equals inflation – that is the economic rule.
And Biden’s proposal to fight inflation is to give people more money to compensate for price increases. He has claimed that policy as a benefit of his administration. But that only adds to inflationary pressures. More price increases to come. He should know that because inflation is going up faster than the wage increases about which Biden brags. In other words, the average citizen is losing purchasing power because tomorrow’s inflation dollar buys less than today’s.
Sending more money to fight inflationary price increases reminds me of the old medical practice of “bloodletting.” To remove the bad humors of a sick patient, colonial era doctors would draw off a little blood. If the patient did not show improvement, they would take more until … well you know.
It has been rumored that it was actually “bloodletting” that killed George Washington. The plantation overseer was brought in to do the procedure, drawing off a half pint. Later a real doctor arrived and performed a second bloodletting. I know I digress, but it is an interesting bit of history
The point of the analogy is that Biden claims to be curing the inflation by doing more of what is causing it. He even claims that his BBB legislation will actually reduce inflation. That is just utter political Bovine Stuff.
Biden also claims that his BBB program is totally “paid for.” That is more bovine stuff. The Congressional Accounting Office says that there will be more than $300 billion dollars of deficit spending in BBB in the first several years. When an expenditure is not covered by taxation, we get more inflation and more National Debt.
And even if they show the future costs and revenues balanced on paper today, you can rest assured that the costs would be greater than projected and the revenues will fall short of projections. We have enough history to safely make that prediction. Otherwise, we would not have a $30 trillion National Debt.
What Biden and the Democrats are doing is legislating to gain more political power from more and more people receiving government money – whether it is a matter of dependency or greed. Inflation, recession or economic crisis are merely an unfortunate side effect that will not matter to the power-grabbing elite in Washington. They are immune to the negative results of their policies.
For the reasons noted above – and others – it is very appropriate and even necessary to call this the “Biden Inflation.” He is causing it – and he owns it.
So. There ‘tis.