During the 1980 presidential campaign, Republican challenger Ronald Reagan said, âA recession is when your neighbor loses his job. Depression is when you lose yours. And recovery is when Jimmy Carter loses his. The Gipper turned out to be correct. The strong winds of rising inflation had thrown working class people to the ground, with paychecks shrinking month after month. Reagan won a landslide victory and Carter was removed from office.
The middle class hates inflation. The New York Times recently hypothesized that the effects of inflation are primarily “psychological” and that people should understand that “the US economy is doing well”. Wrong. People are feeling the impact of rising prices on a daily basis. It doesn’t make them feel poorer. They are poorer.
President Joe Biden doesn’t seem to understand this, and if he doesn’t get it soon, he could suffer the same fate of a ruined presidency that befell Carter. Biden touted wage increases for workers of 4%. Normally that would be a very solid number. Except that for each of the past six months, the consumer price index has exceeded wage gains. Over the past year, inflation has stood at 6.2%, which means that the purchasing power of the public steadily decreases, even with salary increases of 4%.
Even more worryingly, the government recently reported that the costs businesses face in producing their goods and services, the producer price index, have increased by more than 8% from just a year ago. . These costs are soon and inevitably passed on to buyers in the form of higher consumer prices.
One of the prices we are all most sensitive to is the price of gasoline at the pump. Gas now costs $ 3.41 per gallon nationwide, up $ 1.31 per gallon from last November. So don’t be surprised if $ 5 a gallon isn’t around the corner.
Biden isn’t just a victim of bad luck. His policies detonated this inflation bomb. Remember, when Biden took office, the first item he signed on was a $ 1.9 trillion stimulus spending plan, which was completely unnecessary because we already had nearly $ 1 trillion worth of money. unspent COVID-19 relief funds in the pipeline. These trillions of dollars more money pumped into the economy fueled inflation.
Then Biden declared war on American oil, gas and coal. As a result, domestic oil production has fallen by about 2 million barrels per day since Donald Trump was president. So at $ 83 a barrel, that means we’re wasting around $ 165 million a day in domestic production and $ 50 billion a year. This has only given OPEC and the Saudi oil sheikhs a lever to cut production in order to raise prices, and there is nothing we can do about it.
Biden has canceled the Keystone XL pipeline and now wants to shut down a major Midwestern pipeline that is already operational.
No one in the Biden administration seems to have a clue of what to do. Energy Secretary Jennifer Granholm laughed hysterically when asked what the United States’ response should be to rising gas prices. She said she would need “a magic wand” to bring the prices down. It didn’t help things that Biden rescinded a directive from the Trump administration to allow drilling in oil-rich Alaska a few weeks ago.
Biden looks distraught, and he might need a lifeline to call a friend on how to tackle this alarming trend in inflation, which is now anything but “transient.” By far the most urgent measure to stop the push for higher prices is to kill its $ 3.5 trillion social spending bill, which would be paid in part by borrowing and printing even more dollars. You don’t need to have a graduate degree in economics to understand that it will make inflation worse. Yet he and House Speaker Nancy Pelosi continue to insult the people by saying that the Godzilla Bill “won’t cost anything – it’s free.”
And while we talk about Biden’s bogus claims, he continues to assure the public that he will not raise taxes for those who earn less than $ 400,000. But, Mr President, inflation is a tax. You pay this Biden tax every time you fill up your gas tank.
Stephen Moore is a union columnist.