We will reduce inflation, reduce inflation, reduce inflation.
Joe Biden in July 2021
Joe Biden created a no-way-out problem, runaway inflation, that’s created a one-term presidency. We saw this in 1968, when the no-win Vietnam war forced LBJ to not seek re-election.
It’s the economy, Joe-Doh, and the math is simple: low-income voters crushed by food and petrol prices, and higher-income voters crushed by a bear market. No wonder the President has only 33% job approval, because only 25% of Americans approve of how he is handling the economy (source: Quinnipiac).
Even worse, only 36% of voters believe Joe Biden is honest (source: Fox News). That’s a key cause of the June Michigan consumer-sentiment survey being the lowest ever, and why consumer-inflation expectations and stock-market pessimism hit record levels in May (source: NYFR). The President’s created what Jimmy Carter called a national crisis of confidence.
His no-way-out trouble began on Day One, when he ignored Larry Summer’s inflation warning. It worsened with every inflation-is-transitory denial, and proved fatal when he had no solutions – only more false claims and finger-pointing.
Biden is 100% to blame, starting with ignorance. He tried to explain inflation to a CNN Town Hall: “Look. You’re trying to build a house? Try to find lumber. Well, guess what? People stopped working cutting lumber. They stopped doing it because they their the unemployment was so down” (note: if folks stop working, unemployment doesn’t go down).
After Summers said more stimulus was “inflationary” and Joe Manchin said inflation would hurt retirees, Biden said his mega-trillion plan would “reduce inflation, reduce inflation, reduce inflation.” That was so dumb, one gal on Twitter (Kristin) responded, “He doesn’t know what he’s talking about, talking about, talking about.” It’s not a good look when a US president gets dope-slapped by we the people.
A year later, THAT is how most Americans feel; the Democracy Institute predicts (as of today) a 264-seat GOP majority in the House and 54-seat majority in the Senate. Sic Semper Tyrannis.
Right now, average Americans know inflation is higher than the 8.6% reported in May. The CPI used to measure a constant basket of goods to gauge the standard of living. Until 1980, when the CPI-U began measuring a substitution-base basket of goods. It was “modernization” to account for technology improvements, but suffice it to say it coincided with spikes in printing and spending money.
The chart up top, from John Williams’ Shadow Government Statistics, lets us look at May comparatively. The Fed’s CPI-U (red line) of 8.6% is what you heard on CNBC. The SGS Alternate CPI (blue line) of 17% is what you felt at the gas pump. That’s the R-E-A-L inflation rate as calculated prior to 1980 (and a 75-year record high).
The CPI-U values a product as the sum of its internal characteristics and external factors affecting it (if computer prices stay unchanged, but are 25% faster than last year, the Fed sees lower computing costs that offset higher prices elsewhere). Great theory; but a family’s higher grocery bills aren’t offset by robotics, and truckers’ more expensive diesel fuel isn’t offset by faster computers.
People and businesses are hurting, while Biden is busy passing the buck.
“Republicans are doing everything they can to stop my plans to bring down costs on ordinary families.”
“We’ve never seen anything like Putin’s tax on food and gas.”
“Exxon made more money than God this year. Exxon, start investing and start paying your taxes.”
That’s your big punch to stop inflation, Mr. President? Yikes! So here’s the deal…
Food and petrol prices are sky-rocketing, so 2022 is much worse than 1980. What they cost is essential to our standard of living, so the CPI-U is now a cover-up. Biden is so out of his depth, it will take a miracle for him to win his own party’s nomination.