by David Catron
An increasingly disturbing feature of American politics is the routine suppression of major news stories that reflect poorly on candidates favored by the Fourth Estate. The most egregious example in recent years occurred in October of 2020 when corporate news outlets and social media platforms colluded to bury a New York Post article on Hunter Biden. Fortunately, some stories just aren’t susceptible to such censorship. Inflation is a case in point. It can’t be hidden from the voters because soaring prices shout the bad news from every grocery store shelf and gas pump in the nation.
And the voters don’t like what they’re hearing. A recent Gallup poll reports: “Americans’ confidence in the economy remains very low, and mentions of economic issues as the most important problem in the U.S. are at their highest point since 2016.” Moreover, when asked to specify the most important economic issue, inflation topped the list. Not coincidentally, the survey found that Americans identified “the government/poor leadership” as the most important non-economic problem facing the country. This is an evil portent for the Democrats who must defend tiny congressional majorities in the midterms. Politico elaborates:
The professionals who track American attitudes toward the economy say they can see the trouble coming. Angry voters slammed by higher prices and scarred by two years of fighting the pandemic are poised to punish Democrats in midterm elections, according to some of the leading experts in consumer sentiment and behavior. And with inflation persisting and Russia’s war on Ukraine stoking uncertainty, there are indications that public sentiment is getting worse, not better, posing a growing threat to Democrats’ already slim chances of holding onto Congress, they say.
Nor can they claim they weren’t warned. Most reputable economists predicted that the $1.9 trillion “American Rescue Plan” that the Democrats pushed through Congress without a single GOP vote was likely to ignite inflation. Lawrence Summers, who served in the Clinton administration as Treasury Secretary and later as an economic advisor to former President Obama, predicted more than a year ago that the bill was reckless: “I think this is the least responsible macroeconomic policy we’ve had in the last 40 years.… I think there is about a one-third chance that inflation will significantly accelerate over the next several years.”
When Summers’ prediction proved accurate, President Biden and his accomplices added insult to injury by claiming that inflation was unrelated to the huge stimulus bill. First, they insisted the inflation spike was temporary. When that was shown to be nonsense, the White House said it was a “high class problem.” After the resultant laughter ended, they exhumed the “corporate greed” canard. In response to the eye rolling that claim produced, our president introduced the “Putin price hike,” and no one is buying that either. Meanwhile, FOX Business reports that inflation has erased any recent wage increases workers have received:
The Labor Department reported on Tuesday that average hourly earnings for all employees actually declined 2.7% in March from the same month a year ago when factoring in the impact of rising consumer prices. On a monthly basis, average hourly earnings tumbled by 0.8% in March, when factoring in the 1.2% inflation spike. By that measure, the typical U.S. worker is actually worse off today than they were a year ago, even though nominal wages are rising at the fastest pace in years. That’s because inflation is also surging.
When inflation-adjusted wages fall over the course of a year, the money you receive is worth less. The Wall Street Journal explains it thus: “In April 2021 disposable income per capita was $48,641 in 2012 chained dollars. In March this year, that amount had fallen to $45,997 — a decline of $2,644.” That’s a 5.4 percent decrease. This matters if you’re on a fixed income. If you and your spouse are on Social Security and receive $65,000 per year combined, you now receive $3,510 less than you did a year ago. And that $61,490 you now receive is paid in dollars that are worth far less than the greenbacks you paid in Social Security taxes all those years.
That’s why inflation really matters to retirees and low-income individuals in general. It’s why neither corporate news outlets nor social media can bury the story. You live it every day. The prices you pay for groceries, gasoline, and housing tell you all you need to know about inflation. They also tell you that our president and his congressional accomplices have no idea how to fix it. Economists often refer to the term “price” as a package of information. The information contained in today’s skyrocketing prices can be summarized thus: Throw the bums out.
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David Catron is a recovering health care consultant and frequent contributor to The American Spectator. You can follow him on Twitter at @Catronicus.
Photo “Empty Wallet” by Jernej Furman CC2.0.