What the Democrats seem to miss on the inflation issue is that the rate is lower than it was a year or so ago, but it is still making prices higher and is on top of the earlier high rates. Prices don't revert to some low rate from years ago before the new rate is applied.
You will also notice that the commodities listed are the types of things that middle/working class people buy on a routine basis. They are reminded of inflation's bite out of their salaries daily, not when they book a cruise to Europe.
Maybe we should start calling them the Dimocrats???
Bingo. Disinflation is not deflation, but the preferred phrase "cooling down" (deliberately?) confuses the issue.
The other major issue here is an attribution error. Sticky inflation is driven by three factors that emerged long before Biden:
- The Fed adding trillions of dollars to the money supply via QE, mostly going to the financial sector
- The Fed adding trillions more to the money supply via low rates (also going to finance)
- Congress running massive, escalating deficits and pumping trillions more into the money supply
In 2009, Bernanke told Americans that they would unwind the Fed's balance sheet ASAP because central banks buying Treasury bonds and holding them on the books after the crisis is over is "the stuff of banana republics." Well, the Fed's balance sheet today is still colossal, growing, and no one in charge shows any indication that they will reverse course...
What do you call that again, Ben? A B A N A N A R E P U B L I C. What happens in banana republics? Lethal inflation. This shouldn't be hard.
Biden is doing a lot of great work that will keep markets competitive and products affordable for years to come; for example, four antitrust lawsuits against the four biggest tech companies in America, after their market caps were proven to be the result of monopoly power over "innovation" and value add. He just wrestled the price of insulin down to $35 from $500+, through similar antitrust action. You'd never see anything like that under Trump. I don't like him, but Biden IS better for the economy than the GOP. People just don't understand how macroeconomics works.
When my car insurance and homeowners insurance go up by over 50% in a year, then I really don't care about prices in the years to come. Signed, “deluded, ungrateful wretch”
I don't think you're deluded or ungrateful. I understand how painful it is. I'm experiencing the same thing. My monthly student loan payments are $495 (on top of a mortgage that just went up because of a bank error on my escrow payments). I'm drowning.
Unfortunately, there just isn't a magic wand to make your insurance premiums go down. Biden has instructed corporations to lower their prices several times, and he was roundly mocked. That's just not how a democratic republic / capitalist political economy functions (or even really how reality functions).
I can tell you, however, that stronger government enforcement of monopoly power WILL claw insurance premiums back down. He's doing the right things. I understand that doesn't help you NOW, but jumping ship because the results aren't immediate won't help you EVER.
I help Medicare beneficiaries with their Part D drug plans. Naturally I'm happy for anybody who gets a break on insulin. However, what you may not know is that a number of diabetic injectables like Victoza and Ozempic are NOT covered because they are not insulin per se and I am seeing insurance plans simply drop insulins they have covered for years like Lantus, which could be covered.
Also whatever companies that make some of these insulins may just stop making them. It's not as simple as it is being presented....
Interesting, thanks for the insight. Private insurance companies are basically the worst. It's unfortunate that they've taken over Medicare and can just extract fees as a middleman, drop treatments that aren't sufficiently profitable, etc.
You know how much I've spent on the 5 biggest tech companies (Google, Amazon, Meta, Apple, and Microsoft) since 2021? Somewhere between $500 and $1,000. Meanwhile, inflation has outpaced my income by about $14k in the same time frame. And I do have an economics degree, so I understand exactly how macro-economics works. First of all it doesn't - only 1 of countless empirical studies resulted in the Keynesian multiplier being positive - in other words so-called economic stimulus is virtually 100% contractionary. Most Americans have a micro-economic problem like mine, caused by our President embracing a 100 year old economic theory that was sketchy even back then. And all of the things you cite are micro economic actions that are taxes and attendant subsidies with macro effects that are inherently unpredictable.
Well, to start, I would say that if you want to understand macro, the last thing you should do is get an econ degree. University econ is broken.
That said, I agree with your analysis of Keynesian stimulus, which is literally what I said in my comment, so you should read better. To quote:
"Sticky inflation today is driven by three factors that emerged long before Biden:
- The Fed adding trillions of dollars to the money supply via QE
- The Fed adding trillions more to the money supply via low rates
- Congress running massive, escalating deficits and pumping trillions more into the money supply"
Yes, Biden has continued the madness, but at this point the alternative is a devastating correction that would take the S&P back to 3500 or so (where the Schiller PE index says it should be). I think he should let it happen, but it's a politically radioactive choice that multiple presidents (incl. Trump) have punted on. My point was, it started before Biden, with Obama, and continued through the Trump era. No matter who was in office right now, we'd be dealing with inflation from all that money printing.
Third, I only trotted out the four big tech companies as examples. Biden's FTC and DOJ have embarked on the most aggressive antitrust campaign since Teddy Roosevelt, taking on monopolies in industries from healthcare to poultry. That said, if you can rein in Apple with a ~3T market cap, you can rein in anyone. Plus, the rules in the tech space set the pace for the broader market, because tech companies are so gigantic.
Fourth, even if you spend nothing on tech, breaking up their monopoly power benefits you greatly. For example, Amazon doesn't want to be a monopoly in the market, it wants to BE the market. They raise prices across industries by squeezing out competition and forcing everyone to go through them to buy/sell. And basically anyone who does anything tech-adjacent (including automakers, appliance manufacturers, etc) MUST get their products on the Apple ecosystem, which gives Apple enormous leverage on completely unrelated industries to the great detriment of consumer choice, prices, etc.
I disagree with the Biden admin on almost everything, I strongly dislike the man and his policies. But... considering that there is no candidate who would stop the madness at the Fed, antitrust action is one of the best things a president can do to help consumers and workers.
"Making it a bit easier for consumers to buy an electric car or a heat pump just isn’t going to cut it."
Understatement of the decade? Look, I'd risk permanent brain injury for a Million dollar paycheck to get in the ring with Mike Tyson, because it's a one-shot deal. There is no incentive large enough to make me purchase the permanent misery that either an EV or a heat pump will impose on my life.
"However, the Democrats do have another economic argument which merits consideration. That is that they are playing the long game—laying the basis for future abundance." Good luck with the long game influencing Americans who's concept of long is a five minute video or podcast and future planning is what to swipe next on their mobile device.
The long game - for sure. When Sen Warner of VA finally admitted that the addition or legalization of many unskilled poorly educated illegal aliens would actually lower wages for our own US similarly low skilled workers in the immediate future - also known as now - he added that data models showed that if these workers were added/legalized that all wages would rise 20 some years down the road. I ask: Are those were the same models that missed the housing bubble of 2007-2008?
Good luck predicting, let alone implementing, economic conditions well into the future. Reality isn't optional.
After my initial comment I noticed that Ari Fleischer (a fellow Republican) also considers Democrats the party of the rich. https://www.realclearpolitics.
com/video/2024/03/28/ari_fleischer_the_democrats_have_become_the_party_of_the_rich.html Those who earn more than $100,000 per year used to vote predominantly Republican, but now vote predominantly Democrat.
"Deluded ungrateful wretches" may better explain the current US divide, than any other line ever penned. Biden's inflation has rendered US life $1000 a month more expensive. In a country where the bottom 2 quintiles live on $55K a year, or less, $1000 a month in extra expense is soul killing. Living standards of the bottom 4 quintiles are swirling the drain, and no one in DC seems to care. They are too busy beaming about the stock market, and what a good value a $400 meal for 2 provided, considering the exceptional Cab.
Along with ignoring inflation, Dems, untouched by crime in their multimillion dollar gated communities, cannot even feign concern for people being rape and slaughtered due to lax crime enforcement in Biden's America. When a heroic Chicago 11 year Black boy died protecting his mother from her recently paroled , violent, repeat offender boyfriend, Dems said not a word . Had a Trump supporter caused the boy's death, the news would have landed on the front page of every newspaper in the free world
Likewise ,when a 16 year old Hispanic Houston cheerleader was violently murdered, in her own bathtub, by an unvetted Biden migrant, not a word from Dems. A few months later, the better publicized murder of Laken Riley in GA, brought more neglect. Kate Porter, CA Dem Congressperson, who claims to be a Mother, said "one instance" was not reason enough to change border policy.
The Mass Governor, called the incident where a Biden migrant raped a physically challenged 15 year old "unfortunate and rare". What she really meant, is the victims are all poor or middle class, so who cares?
Dems could reflect on the crime, and explain most migrants will never commit a crime, but better vetting must be introduced, to avoid the small subset of thugs. That will never happen, at least not until, a wealthy Dem is in the wrong place, at the wrong time.
Biden's inflation... lol... this started way before Biden.
Federal deficit spending has been blowing out the money supply since Reagan, continuing through to Biden (with the exception of Clinton). Obama kicked it into overdrive with QE/money printing, and zero-interest rates, also ballooning the money supply. Hyper-stimulus from the Treasury and Fed over decades was always going to result in massive inflation-- there's just no avoiding it.
Put *anyone* in office right now, and you'd still have sticky inflation because of this history... unless POTUS is willing to let the market faceplant back to reality, which no one is willing to do. And, if they were, everyone would be even angrier because we'd be hip-deep in an ugly recession. Obama, Ben Bernanke, and Tim Geithner made this inevitable back in 2008. There's no one you can vote in to make it better. It's just going to suck.
Have Democrats switched places with Republicans? Step back and look at the big picture. Abundance has nothing to do with the current Democrats, who are now the party of the rich. Abundance is on the Republican agenda, and Republicans are now the party of the working class. Is the author sure he's in the right party?
Inflation is forcing working people to work longer. They're not taking early retirement from Social Security as early and often as before the inflation. The best they can hope for is that the rate of inflation goes down and that wages eventually catch up but that will not happen without a growth (abundance) agenda.
'Have Democrats switched places with Republicans?' H*ll, yes! So has the AFL-CIO, where I worked for 25 years.
The DNC & the AFL-CIO USED to understand simple supply and demand and that it applied to wages the same as it applied to any other commodity. Now not so much.
They both are big cheerleaders for massive immigration. Meanwhile wages for meatpackers, which used to compare favorably to autoworkers, are down nearly by half of what they used to be; and we are finding children working in these dangerous jobs. Find a Democrat in Congress who doesn't vote harm to working class people on this issue. You can't.
All that unskilled labor that depresses wages does help keep the golf greens green and supply cheap maids/nannies for the better off.
The Democratic Party was born of corruption and we are now at Peak Grift. Both parties and most of their individual politicians are heinously guilty of feathering their own nests once they stand for re-election. Mr. Texiera is a thoughtful intellectual who I've read for probably a decade. Republicans, as much as they like to shoot themselves in the foot, have figured out that inflation is crippling, that when the border is wide open, there are gonna be a bunch of high-profile immigrant crimes and that our federal institutions have been conspiring against the American people. So yeah, I remember when Dem's were protesting against the FBI, CIA, etc. - they have flipped!
What the Democrats seem to miss on the inflation issue is that the rate is lower than it was a year or so ago, but it is still making prices higher and is on top of the earlier high rates. Prices don't revert to some low rate from years ago before the new rate is applied.
You will also notice that the commodities listed are the types of things that middle/working class people buy on a routine basis. They are reminded of inflation's bite out of their salaries daily, not when they book a cruise to Europe.
Maybe we should start calling them the Dimocrats???
Bingo. Disinflation is not deflation, but the preferred phrase "cooling down" (deliberately?) confuses the issue.
The other major issue here is an attribution error. Sticky inflation is driven by three factors that emerged long before Biden:
- The Fed adding trillions of dollars to the money supply via QE, mostly going to the financial sector
- The Fed adding trillions more to the money supply via low rates (also going to finance)
- Congress running massive, escalating deficits and pumping trillions more into the money supply
In 2009, Bernanke told Americans that they would unwind the Fed's balance sheet ASAP because central banks buying Treasury bonds and holding them on the books after the crisis is over is "the stuff of banana republics." Well, the Fed's balance sheet today is still colossal, growing, and no one in charge shows any indication that they will reverse course...
What do you call that again, Ben? A B A N A N A R E P U B L I C. What happens in banana republics? Lethal inflation. This shouldn't be hard.
Biden is doing a lot of great work that will keep markets competitive and products affordable for years to come; for example, four antitrust lawsuits against the four biggest tech companies in America, after their market caps were proven to be the result of monopoly power over "innovation" and value add. He just wrestled the price of insulin down to $35 from $500+, through similar antitrust action. You'd never see anything like that under Trump. I don't like him, but Biden IS better for the economy than the GOP. People just don't understand how macroeconomics works.
When my car insurance and homeowners insurance go up by over 50% in a year, then I really don't care about prices in the years to come. Signed, “deluded, ungrateful wretch”
I don't think you're deluded or ungrateful. I understand how painful it is. I'm experiencing the same thing. My monthly student loan payments are $495 (on top of a mortgage that just went up because of a bank error on my escrow payments). I'm drowning.
Unfortunately, there just isn't a magic wand to make your insurance premiums go down. Biden has instructed corporations to lower their prices several times, and he was roundly mocked. That's just not how a democratic republic / capitalist political economy functions (or even really how reality functions).
I can tell you, however, that stronger government enforcement of monopoly power WILL claw insurance premiums back down. He's doing the right things. I understand that doesn't help you NOW, but jumping ship because the results aren't immediate won't help you EVER.
I help Medicare beneficiaries with their Part D drug plans. Naturally I'm happy for anybody who gets a break on insulin. However, what you may not know is that a number of diabetic injectables like Victoza and Ozempic are NOT covered because they are not insulin per se and I am seeing insurance plans simply drop insulins they have covered for years like Lantus, which could be covered.
Also whatever companies that make some of these insulins may just stop making them. It's not as simple as it is being presented....
Interesting, thanks for the insight. Private insurance companies are basically the worst. It's unfortunate that they've taken over Medicare and can just extract fees as a middleman, drop treatments that aren't sufficiently profitable, etc.
You know how much I've spent on the 5 biggest tech companies (Google, Amazon, Meta, Apple, and Microsoft) since 2021? Somewhere between $500 and $1,000. Meanwhile, inflation has outpaced my income by about $14k in the same time frame. And I do have an economics degree, so I understand exactly how macro-economics works. First of all it doesn't - only 1 of countless empirical studies resulted in the Keynesian multiplier being positive - in other words so-called economic stimulus is virtually 100% contractionary. Most Americans have a micro-economic problem like mine, caused by our President embracing a 100 year old economic theory that was sketchy even back then. And all of the things you cite are micro economic actions that are taxes and attendant subsidies with macro effects that are inherently unpredictable.
Well, to start, I would say that if you want to understand macro, the last thing you should do is get an econ degree. University econ is broken.
That said, I agree with your analysis of Keynesian stimulus, which is literally what I said in my comment, so you should read better. To quote:
"Sticky inflation today is driven by three factors that emerged long before Biden:
- The Fed adding trillions of dollars to the money supply via QE
- The Fed adding trillions more to the money supply via low rates
- Congress running massive, escalating deficits and pumping trillions more into the money supply"
Yes, Biden has continued the madness, but at this point the alternative is a devastating correction that would take the S&P back to 3500 or so (where the Schiller PE index says it should be). I think he should let it happen, but it's a politically radioactive choice that multiple presidents (incl. Trump) have punted on. My point was, it started before Biden, with Obama, and continued through the Trump era. No matter who was in office right now, we'd be dealing with inflation from all that money printing.
Third, I only trotted out the four big tech companies as examples. Biden's FTC and DOJ have embarked on the most aggressive antitrust campaign since Teddy Roosevelt, taking on monopolies in industries from healthcare to poultry. That said, if you can rein in Apple with a ~3T market cap, you can rein in anyone. Plus, the rules in the tech space set the pace for the broader market, because tech companies are so gigantic.
Fourth, even if you spend nothing on tech, breaking up their monopoly power benefits you greatly. For example, Amazon doesn't want to be a monopoly in the market, it wants to BE the market. They raise prices across industries by squeezing out competition and forcing everyone to go through them to buy/sell. And basically anyone who does anything tech-adjacent (including automakers, appliance manufacturers, etc) MUST get their products on the Apple ecosystem, which gives Apple enormous leverage on completely unrelated industries to the great detriment of consumer choice, prices, etc.
I disagree with the Biden admin on almost everything, I strongly dislike the man and his policies. But... considering that there is no candidate who would stop the madness at the Fed, antitrust action is one of the best things a president can do to help consumers and workers.
"Making it a bit easier for consumers to buy an electric car or a heat pump just isn’t going to cut it."
Understatement of the decade? Look, I'd risk permanent brain injury for a Million dollar paycheck to get in the ring with Mike Tyson, because it's a one-shot deal. There is no incentive large enough to make me purchase the permanent misery that either an EV or a heat pump will impose on my life.
"However, the Democrats do have another economic argument which merits consideration. That is that they are playing the long game—laying the basis for future abundance." Good luck with the long game influencing Americans who's concept of long is a five minute video or podcast and future planning is what to swipe next on their mobile device.
The long game - for sure. When Sen Warner of VA finally admitted that the addition or legalization of many unskilled poorly educated illegal aliens would actually lower wages for our own US similarly low skilled workers in the immediate future - also known as now - he added that data models showed that if these workers were added/legalized that all wages would rise 20 some years down the road. I ask: Are those were the same models that missed the housing bubble of 2007-2008?
Good luck predicting, let alone implementing, economic conditions well into the future. Reality isn't optional.
After my initial comment I noticed that Ari Fleischer (a fellow Republican) also considers Democrats the party of the rich. https://www.realclearpolitics.
com/video/2024/03/28/ari_fleischer_the_democrats_have_become_the_party_of_the_rich.html Those who earn more than $100,000 per year used to vote predominantly Republican, but now vote predominantly Democrat.
"Deluded ungrateful wretches" may better explain the current US divide, than any other line ever penned. Biden's inflation has rendered US life $1000 a month more expensive. In a country where the bottom 2 quintiles live on $55K a year, or less, $1000 a month in extra expense is soul killing. Living standards of the bottom 4 quintiles are swirling the drain, and no one in DC seems to care. They are too busy beaming about the stock market, and what a good value a $400 meal for 2 provided, considering the exceptional Cab.
Along with ignoring inflation, Dems, untouched by crime in their multimillion dollar gated communities, cannot even feign concern for people being rape and slaughtered due to lax crime enforcement in Biden's America. When a heroic Chicago 11 year Black boy died protecting his mother from her recently paroled , violent, repeat offender boyfriend, Dems said not a word . Had a Trump supporter caused the boy's death, the news would have landed on the front page of every newspaper in the free world
Likewise ,when a 16 year old Hispanic Houston cheerleader was violently murdered, in her own bathtub, by an unvetted Biden migrant, not a word from Dems. A few months later, the better publicized murder of Laken Riley in GA, brought more neglect. Kate Porter, CA Dem Congressperson, who claims to be a Mother, said "one instance" was not reason enough to change border policy.
The Mass Governor, called the incident where a Biden migrant raped a physically challenged 15 year old "unfortunate and rare". What she really meant, is the victims are all poor or middle class, so who cares?
Dems could reflect on the crime, and explain most migrants will never commit a crime, but better vetting must be introduced, to avoid the small subset of thugs. That will never happen, at least not until, a wealthy Dem is in the wrong place, at the wrong time.
Biden's inflation... lol... this started way before Biden.
Federal deficit spending has been blowing out the money supply since Reagan, continuing through to Biden (with the exception of Clinton). Obama kicked it into overdrive with QE/money printing, and zero-interest rates, also ballooning the money supply. Hyper-stimulus from the Treasury and Fed over decades was always going to result in massive inflation-- there's just no avoiding it.
Put *anyone* in office right now, and you'd still have sticky inflation because of this history... unless POTUS is willing to let the market faceplant back to reality, which no one is willing to do. And, if they were, everyone would be even angrier because we'd be hip-deep in an ugly recession. Obama, Ben Bernanke, and Tim Geithner made this inevitable back in 2008. There's no one you can vote in to make it better. It's just going to suck.
Have Democrats switched places with Republicans? Step back and look at the big picture. Abundance has nothing to do with the current Democrats, who are now the party of the rich. Abundance is on the Republican agenda, and Republicans are now the party of the working class. Is the author sure he's in the right party?
Inflation is forcing working people to work longer. They're not taking early retirement from Social Security as early and often as before the inflation. The best they can hope for is that the rate of inflation goes down and that wages eventually catch up but that will not happen without a growth (abundance) agenda.
'Have Democrats switched places with Republicans?' H*ll, yes! So has the AFL-CIO, where I worked for 25 years.
The DNC & the AFL-CIO USED to understand simple supply and demand and that it applied to wages the same as it applied to any other commodity. Now not so much.
They both are big cheerleaders for massive immigration. Meanwhile wages for meatpackers, which used to compare favorably to autoworkers, are down nearly by half of what they used to be; and we are finding children working in these dangerous jobs. Find a Democrat in Congress who doesn't vote harm to working class people on this issue. You can't.
All that unskilled labor that depresses wages does help keep the golf greens green and supply cheap maids/nannies for the better off.
The Democratic Party was born of corruption and we are now at Peak Grift. Both parties and most of their individual politicians are heinously guilty of feathering their own nests once they stand for re-election. Mr. Texiera is a thoughtful intellectual who I've read for probably a decade. Republicans, as much as they like to shoot themselves in the foot, have figured out that inflation is crippling, that when the border is wide open, there are gonna be a bunch of high-profile immigrant crimes and that our federal institutions have been conspiring against the American people. So yeah, I remember when Dem's were protesting against the FBI, CIA, etc. - they have flipped!
Dr. Teixeira is indeed thoughtful; that's why I subscribe.