The media are doing their best to deflect the blame for high inflation from Biden and his policies
When the AP and other media outlets talk about the causes of inflation, somehow, they miss the elephant in the room: energy policies.
Since day 1 of his presidency, Biden has set out to destroy oil companies and reduce production. This policy alone has contributed significantly to the price spike in energy prices — and those high prices flow through the entire economy as they affect all prices. The high energy prices especially harm the poor, middle class, and small businesses, whom the media and other Democrats pretend to care about. If Biden and the Democrats focus on the destruction of the fossil fuel industry, without scientific evidence, the price spikes will not be transitory; they will compound.
The rate of inflation will naturally slow from the huge spike this year, but the high prices will continue to do great harm unless Biden and the Democrats go back to producing more oil, which they won't.
Government lockdowns destroyed a lot of small businesses. When others were permitted to reopen by benevolent politicians, they not only had to compete against other businesses for employees, but also had to compete against high supplemental unemployment benefits paid by the federal government. Therefore, they had to raise wages to higher levels than a free market would cause. These higher wages are not transitory and lead to much higher inflation because they will cascade through the economy.
The AP somehow also missed the high unemployment rates as a significant cause of higher labor costs.
Much of it is the flipside of very good news. Slammed by COVID-19, the U.S. economy collapsed in the spring of 2020 as lockdowns took effect, businesses closed or cut hours and consumers stayed home as a health precaution. Employers slashed 22 million jobs. Economic output plunged at a record-shattering 31% annual rate in last year's April-June quarter.
Everyone braced for more misery. Companies cut investment. Restocking was put off. And a brutal recession ensued.
Yet instead of sinking into a prolonged downturn, the economy staged an unexpectedly rousing recovery, fueled by massive government spending and a bevy of emergency moves by the Fed. By spring, the rollout of vaccines had emboldened consumers to return to restaurants, bars and shops.
Suddenly, businesses had to scramble to meet demand. They couldn't hire fast enough to plug job openings — a near record 11 million in October — or buy enough supplies to fill customer orders. As business roared back, ports and freight yards couldn't handle the traffic. Global supply chains became snarled.
Furman suggested, though, that misguided policy played a role, too. Policymakers were so intent on staving off an economic collapse that they "systematically underestimated inflation," he said.
"They poured kerosene on the fire."
A flood of government spending — including President Joe Biden's $1.9 trillion coronavirus relief package, with its $1,400 checks to most households in March — overstimulated the economy, Furman said.
"Inflation is a lot higher in the United States than it is in Europe," he noted. "Europe is going through the same supply shocks as the United States is, the same supply chain issues. But they didn't do nearly as much stimulus."
The AP also seemed to miss all the additional non-productive mandates and regulations Democrats impose on businesses. These costs contribute greatly to cost-push, not demand, pull inflation and are permanent unless reversed, which Democrats won't do.
The result of government policies has yielded the highest inflation in forty years and the biggest productivity decline in sixty years.
- Labor productivity declined 5.2% from the previous three-month period, worse than the Dow Jones estimate for a drop of 5%.
- That was the biggest quarterly decline since the second quarter of 1960.
Unit labor costs, or the measure of how much businesses pay their per unit of input, rose 9.6% from the second quarter, which reflected a 3.9% increase in compensation combined with the decline in productivity. That was well above the 8.4% Dow Jones estimate.
The Federal Reserve also contributes greatly to the inflation problem by printing massive amounts of money to purchase government debt and to keep interest rates artificially low. These low interest rates encourage individuals to increase the prices they will pay for houses, cars, and other products. The low rates allow corporations and government entities to run leverage up and pretend the rising debt is not dangerous.
The low rates cause government pension funds, retirees, mutual funds, and other investors to chase the price of other assets up like new ventures, IPO's rental real estate, crypto-currencies, and stocks. When prices are artificially pushed up because of low interest rates, it creates a bubble. When this artificial bubble pops, the results are never pretty.
Biden and others continue with their bald-faced lies that Build Back Better will lower inflation, that no one making under $400,000 will see taxes rise, and the bill will be fully paid for. The media know this yet do not block him from spreading the misinformation. They never blocked anyone from spreading the Russian disinformation, either.
Social media outlets routinely censor people they disagree with by saying they are blocking misinformation. Facebook, in a defense to a defamation suit, admitted that the "fact checks" were nothing more than opinions. It has been obvious for a long time that the fact-checkers haven't cared about facts. They, like most supposed journalists, are campaigning for an agenda.
Facebook asserts in a court filing that "fact checks" created by third-party organizations and used to remove content or to suspend users are nothing more than "protected opinions." Basically, when Facebook and other media outlets claim they are silencing people because of facts, they are lying. They are silencing people they disagree with.
Everything the Biden administration and other Democrats are doing involves transferring more power and money from the private sector to the government. There appears to be no effort to control costs on anything, whether it is infrastructure, education, day care, energy, preschool, or medical costs.
Social Security recipients are getting the biggest increase in a long time because of inflation. Around 7% or around $100 for an average recipient. This increase will not cover the economic damage the high inflation has caused. Their Medicare Part B premiums are going up 14.5%, or $21.60 per month.
It is a true shame that most of the media today spend so much of their time hiding the truth from the public as they campaign for policies that will destroy the economy and our way of life. The rich will do fine.
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