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Inflation for dummies

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.

About The Author

Larry Horist

So,there‘tis… The opinions, perspectives and analyses of Larry HoristLarry Horist is a businessman, conservative writer and political strategist with an extensive background in economics and public policy. Clients of his consulting firm have included such conservative icons as Steve Forbes and Milton Friedman. He has served as a consultant to the Nixon White House and travelled the country as a spokesman for President Reagan’s economic reforms. He has testified as an expert witness before numerous legislative bodies, including the U. S. Congress. Horist has lectured and taught courses at numerous colleges and universities, including Harvard, Northwestern, DePaul universities, Hope College and his alma mater, Knox College. He has been a guest on hundreds of public affairs talk shows, and hosted his own program, “Chicago In Sight,” on WIND radio. Horist was a one-time candidate for mayor of Chicago and served as Executive Director of the City Club of Chicago, where he led a successful two-year campaign to save the historic Chicago Theatre from the wrecking ball. An award-winning debater, his insightful and sometimes controversial commentaries appear frequently on the editorial pages of newspapers across the nation. He is praised by readers for his style, substance and sense of humor. According to one reader, Horist is the “new Charles Krauthammer.” He is actively semi-retired in Boca Raton, Florida where he devotes his time to writing. So, there ‘tis is Horist’s signature sign off.

22 Comments

  1. Marty baker

    The dummies are the fools who voted for Biden and the people who helped with the voter fraud And the three stooges Ben, Joseph and Frank who support them on this site

    • Theodore Sueck

      You are so correct in your observation. It’s gotten to the point that I can hardly read the bovine excrement spewed by Ben, Joseph and Frank without getting down right sick to my stomach. The rose colored glasses that these three use to view the world have really warped their views on reality.

      • frank stetson

        And yet beyond the name calling and hatred to the point of retching, you have so little to offer in a positive vein. From the party of “just say no” and “whattttya want me to do about it” where people have been swilling lies and telling you it’s fine wine, 30,000 lies in four years, that’s basically what we get. Heck, they sent their storm troopers after any in their own party who voted for Infrastructure. Yeah, the party that’s against roads and bridges. Except to take credit for that they voted against. Nope, we ain’t perfect, but we sure are better, party-wise.

        Dems rule, Repubs drool.

        Just stop reading if you can’t handle the truth.

        • Eric morris

          Dems only rule weak minded sheep

  2. Joseph S. Bruder

    I would think that after your last disastrous foray into economics and your outright false “graphs to nowhere” just two days ago, you would give up on lecturing your readers about economics. You were taken to task by every reader that took even a 30-second look at your outdated graphs that you tried to pass off as somehow related to Biden’s policies. If there’s an “Economics for Dummies” book available, you should read it posthaste.

    First of all, Powell did NOT say that “transitory” was no longer “operative”. What he said was “it’s probably a good time to retire that word and try to explain more clearly what we mean”. It was clear that every newsmedia in the country had taken to repeating that word as a summary of all things economics related, without any context. He also said, that the “risk of higher inflation has increased,” but reiterated that his baseline expectation is for inflation to fall closer to the central bank’s 2% target over the course of 2022. So, your first strawman of the article is your statement “We are in a prolonged inflationary period of indeterminable duration and severity.”

    Florida may be different (probably because of bigger COVID problems), but prices where I live have come down by about 10 cents a gallon over the last week or two.

    Trump managed to lose 8 million jobs in a year because of his failed COVID response. And you criticise Biden because he restored “only” 5 million jobs in 9 months? Obama presided over the longest string of job gains in history, only for that progress to be destroyed by Trump. Now, Biden has started a new string of job growth, and the unemployment rate is down to pre-pandemic levels. Did you expect it to be instant? Apparently all the economics you learned during the Reagan years has turned out to be “poppycock”. And by the way, the job numbers in November weren’t great, but neither were the 4 months before – but every one of them was revised considerably upward as the data came in. You’re deliberately cherry picking early data just so you can bash Biden.

    “The outright refusal of many to return to work is largely due to all that money that has been given to people.” That’s another bald-faced lie with no basis in fact. All stimulus money ended months ago. Many people retired early because they didn’t want to be endangered by a pandemic. A lot of people who were laid off during the early months of the pandemic realized how unstable their jobs were, and went into other lines of work. And 800 million have died because of COVID, many of which were also working in the economy. There is absolutely no evidence that people just decided to quit working and live off the government teat.

    And again, go back and read your Dummies book. “more money chasing fewer goods” is not the same as supply and demand. The supply chain has been disrupted because of COVID. Since people can now protect themselves from COVID if they choose to do so, demand has rebounded. Manufacturers transistioned into markets that were more viable when the pandemic was at its worst, and are now transistioning back. Again, it’s not an instant process, and because of the lingering effects of COVID some of the pandemic markets are also still strong.

    Even your inflation arguments fall apart when viewed in context of the pandemic. Inflation was low in the initial stages of the pandemic because some goods were scarce, and people were not using gas or buying clothes or going out to restaurants. Gas prices were depressed because traveling was down. Short term gain for Trump – no inflation if nobody can buy anything. Now that goods are flowing again, inflation will spike when compared to the low-inflation period. Comparing to unusual quarterly data from a year ago will yield unusual results. Comparing to more normal quarterly data will bring the results back in line.

    You also continue to blame your fictional poor economy on Biden’s programs. However, spending from the infrastructure bill hasn’t started, and Biden’s BBB bill hasn’t even passed. And the economy is doing pretty good considering the supply disruptions. The real shame is that Republicans are actively sabotaging the eonomy. Republican “leaders” across the country are encouraging the anti-mask anti-vax movement, purely to gain political advantage. This causes disruptions in companies as workers are out for two or three weeks because of COVID, and even more when a worker actually dies.

    The bump in inflation during Biden’s term is most likely to be a short-term temporary side effect of the pandemic. What wil be remembered for many years to come will be how the Republicans sacrificed their own constituents for a short-term advantage.

    • Joseph S. Bruder

      Excuse me, that’s 800 THOUSAND have died because of COVID and are part of the reason for lack of workers…

  3. frank stetson

    Larry, IMO, you’re batting 500 on this economic tome, doing better! You conclude: “He is causing it – and he owns it,” I’ll give you ownership. It’s on Biden’s watch. Causing it; not entirely on his watch, Biden’s policies and messaging just not helping yet. Messaging certainly hurting his efforts to calm.

    The seeds for this inflation were first sown by Trump. And yes, I think Biden saying “transitory” is a big risk, turns out a stupid one given it isn’t transitory any more, or was it ever, depending on what you thought that meant. Now they will walk it back and that will just make the messaging even worse. Just like Afghanistan, Biden has trouble with his choice of words sometimes, gets impatient too. But before you attack his messaging on a partisan basis, remember, you’re the party of The Big Lie, Personal Freedom above Public Health lies, wierd covid remedy lies, 30,000 lies in one term, and, most terrible, a culture of incoherent attack messaging all allowed as “antics.”

    BBBetter has the primary problem of being a bad alliterative name, probably not the best for a stutterer :>( But to say a spending bill causes inflation is not necessarily true. I mean if it was, wouldn’t we have inflation every year, every budget, since each all have spending bills. Or are you saying if you give a mother milk money, that causes inflation? If you help a student pay off college loans, that causes inflation? Not exactly going to be true for the entire, if any, of the BBBetter programs. IOW – you just don’t know but are guessing because we are spending a lot of money on humans that it will cause inflation. But we always spend the money Larry. Inflation is a little more complicated than that.

    Larry says: “When an expenditure is not covered by taxation, we get more inflation and more National Debt.” Larry, while it probably causes debt (not guaranteed depending on other revenues beyond taxation), it most certainly does not, by itself, cause inflation. Not one price needs to change just because programs run a deficit. Need I remind of the past, what 50 years, that we ran a deficit and had marginal inflation? Under both parties.

    So, Larry, while you throw a lot of stuff, I am not sure you have nailed the root cause, and it certainly is not all in Joe Biden’s actions alone. As to ownership, IMO, yes, it’s Biden’s. As to messaging, Biden’s sucks on this — needs to fire his Afghanistan/Inflation/??? response writers. Needs to pause, reflect, before he speaks.

    Next, I will detail what I see as root causes, and rest assured, they are not just from Biden’s actions as some partisan hacks would suggest. And yes Larry, if you tout your experience in economics, you would have never pinned this to Biden alone. That’s just partisan thinking.

    • larry Horist

      Frank … just for the record, I have previously written about Trump’s final stimulus money being inflationary. But the current problem is not only on Biden’s watch. It is his failure to impose policies to reverse the trend toward inflation –and he did not do that. And his spending contributes to the problem. Ergo, he owns it. If Trump were President today, I would be blaming him for the inflation if he followed similar policies. It is not politics. It is economics. And when we spend without the revenue to cover it, you get inflation. That is why Biden is lying about the BBB bs as being “paid for.” At least he has stopped saying it is all “free.” You say that taxation is not the only source revenues. True enough. But it is the only way to cover excessive deficit spending. If it is not covered, then the money must be borrowed. Inflation ran at 10 percent in November. If you think inflation is not a looming crisis, then just extrapolate that to an annual figure.

      • Frank stetson

        Geez Larry, I get lectured for agreeing with you? I agree, still, this is on Biden‘s watch.

        However, you must admit that spending alone, even deficit spending, is not a direct path to inflation. Otherwise, I think we would’ve had much more inflation over the past 20 years.

        For example, Bush I ran quite the deficit and yet did not get rampant inflation, instead got the great recession.

        Obama, inheriting the great recession, added the great stimulus and yet very low inflation. Answer: he invoked the bush law to provide interest on excess reserves held by banks. Since then, trillions of dollars have been pulled out of the money supply and put into excess reserves, I think right now it’s at its highest level ever.

        Trump, inheriting a growing economy, cut taxes and yet suffered no inflation even as he ran up the deficit higher than anyone’s ever run it up before. Answer: he gave the money to the rich and they did not spend it. By rich in this case I even mean the middle class, most of which put much of the stimulus money into the bank or at least did not spend it.

        Further, 30% of the current inflation is caused by energy prices which is caused by producers limiting supply. At the same time, with absolutely no increase cost, they’re jacking up the price. Why: because OPEC is doing it.

        We also have supply line bottlenecks which are not solely caused by increased spending and increased demand, much of which is caused by increased govt spending.

        So, it’s a complex situation, and spending alone does not cause it, but it is most certainly on Biden‘s watch. Unfortunately, Biden can only lobby for increased spending, ultimately it’s in the hands of Congress where only 50% of the people are even engaged, the other 50% are engaged in the politics of just say no.

        I agree the deficit disorder huge problem worry. To the point of this liberal would call for a balance budget law that declares the budget should be balanced until certain economic indicators are reached. But I also think that Biden‘s build back better at 170 billion a year is just one of the drops in the bucket. Defense at almost 700, billion a year is one of our biggest budget items. You can’t tell me they could not save 10% or 70 billion on that which covers a giant share of the build back better. I am guessing that can be done in many places on the budget if Congress we get to work.

        Bottom line: inflation is bad, need to work on it. Deficit is bad, need to make improvements here. Spending should be scrutinized across the entire board, not just this new program.

  4. AC

    Larry, following your Punching Bag Posts over the past year began as an exercise in my attempts at finding the Republican opinion. The Republicans on the street along with people I have known for decades follow in lock step with Fox media personalities and other right wing oriented media. Believing propaganda promulgated by charlatans and grifters as truth. Rampant conspiracies are their truth. Now, no middle ground view possible and no compromise, the political right thinks a revolution represents the way for taking their country back. My hope has been that at least some Republicans are for democracy and know the whole Constitution as intended. Instead is see and hear Its misapplication and tortured interpretation for justification of generational prejudice rationalizing deep racial, religious, national origin, and especially the politically right bias.
    Clearly, a big share of the GOP loyalist listen to and base options on heavily loaded anti-demarcate party rhetoric dressed up with fractured facts that distort reality. Any actual context and relevant comparisons appear unimportant and impede the intended messaging.
    Since, you Larry, are mainly preaching to the Republican choir and represent the quintessential echo chamber. Your constant unswerving Democrat bashing and President Biden delegitimizing rings true for those not well grounded in American History’s realities. Cherry picking history and without regard given to historical context relating to present day does not solve the most pressing problem.
    Aren’t we all of in this together? How can we survive outside attacks while focusing on the other party’s faults? America is in disarray and not because state’s would have done a better job managing national problems. States are not equipped with depth enough in every category needed in a pandemic. If you are the preacher want to be as you indicate by your tone, better know your congregation’s real needs lay with unity.
    So, know that Democrats are not listening. All your posturing and beating on your chest evermore stridently never works except in actual combat in wars of existential consequences. Stoking the politically charged fires burning vitality out of our democracy. You too can prevent the virus causing divisiveness gripping our national mentality. The only sure immunization is not mandated by the Federal Government. Ensuring democracy’s heath and freedoms for
    all the people is paramount.
    I agree with Bruder’s reply, he is grounded in real facts. However, considering you vector’s path and your convictions to date, contributions toward unification are unlikely., It’s a personal identity thing for you, It’s all about the Old Dog’s diminished learning capacity. An epiphany conversion experience is not likely. And, expected is Larry churning out his usual baseless manufactured dirt.

    • Joseph S. Bruder

      ooh… you called him Old… he hates that!

      • AC

        Joseph, if Larry hates that, what other realities can’t he comprehend? However, that does explain a great deal. The bio picture gives a hint. And, when was it snapped?

        • Joseph S. Bruder

          I don’t know… but online bios put him somewhere between 78 and 120…

          • larry Horist

            AC Oops some of the text vanished. Must be an age thing…lol. Anyway, you get the point.

          • frank stetson

            Age is in the mind.

            Therefore, I would lean towards the high side for Larry :>)

            just kidding buddy, but that picture, did you just eat a baby? I heard DMV turned that one down :>) Rumor has it that your phone won’t allow you facial recognition, it keeps crashing…. is that a cattle prod application, constipation, or are you really just smiling…… just funnin you but when you fix the picture, fix the typo in the tag line. It’s killing us. It’s not “So,there‘tis…” It’s So there ‘tis…

          • larry Horist

            Frank … you sound like you are trying out to replace Don Rickles…lol. With all the childish animosity Bruder and Ben express toward older folks, I am amazed at their support of Biden, Pelosi and Schumer. But as I occasionally point out .. hypocrisy is not a problem in politics. It is a condition of employment.

        • larry Horist

          AC… Gads, you are right. I have not paid attention to the bio pic. That is pre-beard. I need to bring that up to date. Thanks for drawing my attention to it. And for the record … I am very comfortable with my age. You should not take what Bruder says about me in his childish ad hominin attacks because he is not talking about me — but has created a mythical Larry Horist in his
          the fanciful debate between him and the imaginary LH. Rest assured, I am a very happy and healthy 78 — heading toward 120.. My parents genes, luck and providence have been very good to me.

          • Joseph S. Bruder

            In the immortal words of Reagan, “there you go again”… Accusing me of building up a “mythical Larry Horist”… It’s getting a little old… Either you are what you write, you’re deliberately deceiving your readers, or you’re deceiving yourself.

            And the definition of ad hominin is: “Attacking a person’s character or motivations rather than a position or argument.” You often accuse me of that, but that’s exactly what you’ve done with this reply – attack me, attribute my motivations to some grudge against the site, and never debate the arguments.

            I didn’t lie – you really do hate to be called old, and lash out with attacks and insults. I reported your age as “somewhere between 78 and 120” – a bit of humor there, which you seem to be incapable of recognizing, but factually correct. It wasn’t even me that called you “Old Dog”. But still, you reply with the attacks and insults, as usual.

            Larry, you have a serious lack of self-awareness.

  5. Grank stetson

    Brau, come on, you know how old guys get fixated. Give him a break. Fyi, I can attest to repetition mot helping, ever read my posts? Yesh, I am old too. He still can’t get that when the headline says net import, repeated three times, it does not mean export…

    Larry, Don who? Bet he worked on vaudeville ;-). You’re only as okd as you feel, again, just funnin. Cuz based on that picture, you must feel….::just funnin still, my pictures make yours look golfen.

    My FiL saved Frank Sinatra’s voice, maybe his life! Another story. Maybe after Joe tells ys anout his ole Kentucky home one more time!

    • larry Horist

      Grank ,,,, you mock my age for my reference to comedian Don Rickles … and then you bring up Frank Sinatra, who was born in 1915, long before Rickles was born. LOL

  6. tom williams

    I think it’s time we all went back to Economics 101. There are just a couple of simple facts. You have workers and business owners, no matter if it’s a cupcake shop in the Mall or a multinational corporation. The owner provides the workplace, the product to sell, and the means for the worker to sell that product. The worker needs to do their job well and produce that product in an economical manner. This leads to sales and if AND ONLY IF the owner can sell that product for MORE than it cost to make it can that owner stay in business. The idea that there can be a “free lunch” is absurd. No matter what the recipient of that free lunch has to pay for it ($0), SOMEONE has to pay for the stuff it takes to make the lunch. Nobody does ANYTHING for NOTHING. Volunteers in charities? Still, the money donated or the goods donated will always be paid for by someone.
    I agree that there is less a tendency to want to work as long as there is a free ride provided by the government. I have no problem with helping out those who really need it through something beyond their control. But those who are able-bodied and will not take a particular job because it’s “below their dignity” should have benefits cut off. I’ve worked a lot of “dirty” jobs in my life, but at least I worked for what I have. No job was ever below my dignity if my own well-being or especially that of my family was at stake. People need to get that in their minds and get it taught to them in school, no matter what school it is.

  7. Ben

    Turns out, US corporations ( outside of the finance sector) have posted the fattest margins since the 1950’s.

    So much for Biden/Democrats/ free money/ being the cause of inflation.

  1. Larry, Good luck with that. I am in the same situation. VAXXED to the MAX Moderna and in age category…