You know things are bad when even the mainstream press is admitting that the latest inflation numbers “soared far above expectations last month” and that this is “wiping out pay gains.” But, according to President Joe Biden, Thursday’s report on inflation “shows some progress in the fight against higher prices.”
What progress? Inflation was up 8.2% in September, compared with the year before. And that’s on top of last September’s 6.2% increase.
Here’s another way to look at it.
In the 21 months since Biden took office, the Consumer Price Index has shot up 13.5%. That compares with 4% in the first 21 months of the Trump administration. (See the chart below.)
The so-called “core inflation” number – which subtracts more volatile food and energy categories – shot up 6.6% on an annual basis this September, the biggest such jump in four decades.
As the Associated Press put it, the core inflation number was “far above expectations” and “a sign that the Fed’s five rate hikes this year have so far done little to cool inflation pressures.”
In other words, we are in for a world of hurt as prices keep climbing while the Fed’s continued rate hikes slash home prices, shrink retirement accounts, and kill jobs.
The Heritage Foundation’s EJ Antoni calculates that inflation and the resulting interest rate hikes are already costing the average worker $4,200 a year. As we noted in this space earlier, Biden’s economic disaster has stolen more money than families received from all the COVID relief checks combined.
What has Biden been doing this whole time? A review of the record shows that he has either:
- Denied inflation was a problem
- Promised it would soon be over
- Claimed his policies were working to bring it down
- Blamed COVID, Putin, greedy gas station owners.
The chart below is a timeline of what Biden was saying as inflation steadily marched upward.
The person Biden hasn’t blamed for this crisis is himself. Because in order to do so, he’d have to admit that his $2 trillion “rescue” plan sparked the inflationary spiral, just as many economists predicted it would.
Instead, in his statement Thursday, Biden said that “Republicans in Congress’ number one priority is repealing the Inflation Reduction Act. That’s the exact wrong thing to do in this moment.”
Actually, repealing that law – which raises taxes, turbocharges the IRS, and adds still more inflationary spending, while doing nothing whatsoever to control inflation – is the exact right thing for Republicans.
The exact wrong thing to do is believe anything Biden says about the economy.
— Written by the I&I Editorial Board
President Biden needs to undo what he did on day one. Rescind that Executive Order against fossil fuels. That caused inflation to explode.
Don’t believe me?
Here’s the deal:
Rescind the Executive Order canceling fossil fuel projects. Fire the two wacko Department Heads at Interior and Energy Depts. holding up approvals/permits. Drill baby drill.
In less than six months you’ll have low gas prices and lower costs for everything else.
But, hey I’m a Republican. Ignore me.
Then, proceed to stay out of power for the next ten years.
Explaining economics to a democrat is like TRYING TO explain the miracle of electricity to a savage
These latest, terrible inflation numbers are bad for the Dems. Biden telling us everything is wonderful is not helpful either. Expect a red wave next month!
Inflation is here to stay and will not end soon. The cause of inflation is, simply put, too much money chasing too few goods. Even as inflation will not go away, bear market rallies (that ultimately fall back) will become a fixture in the financial markets (for the same reasons, below).
1. Historically low interest rates for more than a decade encouraged borrowing for increasingly questionable reasons at the margin (business expansion, homes, education, automobiles…); and
2. Quantitative easing increased the balance sheet of the Federal Reserve Bank to ~$9T; and
3. The velocity of money has fallen precipitously over the same period, indicating a steady declining number of suppliers coupled with a steady increase in hoarded wealth (“the wealth gap”); and
4. COVID-19 “stimulus” and reckless federal spending added ~40% to M1 (money supply) in just over two years; and
5. The federal deficit is now ~$31.4T and steadily rising; and
6. COLAs to take effect in 2023 will instantiate much of the inflation that has taken place as prices are inclined to move up more easily (due to too large a money supply) than they are to move down (due to an increase in supply or innovations in the market; contrary to conventional wisdom, reduced demand does not necessarily bring down prices, even as much production is locked into sunk costs).
Even as the FOMC is raising interest rates to reduce the money supply, the Federal Reserve Bank is loath to undertake aggressive, or even serious, quantitative tightening (selling the bonds on its balance sheet) to further reduce it (by up to ~$9T). Treasury Secretary Janet Yellen, herself a chairman of the FRB during some of the years in which the facts cited above were obtained, has raised concerns about “shrinking liquidity in the bond market.” Therein lies the rub – as interest rates go up, the cost of financing the federal debt goes up as much of that debt financing is in short-term instruments since the administration of WJC. JY is confronted with a) selling new bonds to finance the larger debt and b) rolling over (at higher interest rates) expiring bonds.
The FMOC, FRB, and the Treasury are shackled together – a restoration of sensible interest rates, though helpful to savers and some seniors, will only increase the wealth gap as it rewards those with capital to invest. As the interest owed on the federal debt takes more of the (non-existent) federal “budget,” either Congress will spend even more that we do not have, or it will raise taxes (hurting more people more), or it will cut transfer payments (hurting those who depend on government largesse).
All true but you are trying too hard. Obama and co are laughing at us. They could care less. In fact they enjoy that Biden’s the fall guy. The worst he looks the more we are distracted from who is really pulling this crud. Every 3 to 5 days they roll out something more to outrage us. Designed to keep us off balance. THEY ARE TRYING TO DESTROY AMERICA as we know it.
When you’ve been a Senator for 50 years, without a single accomplishment, it must be very tempting to believe what your 26yo ‘advisors’ tell you. When you are also a self-admiring midwit congenital liar, the likelihood of acknowledging culpability is around nil.