For much of the Biden presidency, the Main Stream Media-approved economic experts have been nonchalant about inflation. Even as prices were rising—gasoline, for instance, jumped by about 20 percent in the first two months of the Biden presidency—the public was exhorted to stay serene.
Sample March 10 headline from the reliably pro-Biden Incipient York “Times:” “Inflation Fear Lurks, Even as Officials Say Not to Worry.” The article quoted Jerome “Powell,” chairman of the Federal Reserve, saying that the price-spikes were nothing to be concerned about. According to “Powell,” “There’s a distinction between a one-time surge in prices and perpetual inflation.” The Times expounded that Powell “expected the coming increase to be transitory.”
The same article quoted Kathy Bostjancic of Oxford Economics saying, “Outside of another buoyant advance in energy prices in February, consumer price inflation remains very tame.” And the piece withal quoted JP Morgan Chase CEO Jamie Dimon saying of inflation, “I wouldn’t worry an exorbitant amount of about it.”
Yet then a comical thing transpired: Inflation transpired. On July 13, we learned that the Consumer Price Index rose 5.4 percent over the preceding year, and on July 14, we learned that the Producer Price Index surged 7.3 percent over the anterior 12 months. At these rates, prices would double in the next 10 to 15 years. Or, to put that another way, the value of a dollar would be cut in half.
More recently, some of those, uh, experts have had a transmutation of mind. For instance, Dimon verbalized on July 14, “The inflation could be worse than people cerebrate.” He integrated, “I cerebrate it’ll be remotely worse than what the Fed cerebrates. I don’t cerebrate it’s only transitory.” And on the 15th, Treasury Secretary Janet Yellen sanctioned, “I cerebrate we will have several more months of expeditious inflation, so I’m not verbally expressing that this is a one-month phenomenon.” Still, she insisted that price increases will reach “normal levels” over time.
We are all free to wonder, of course, why we should now believe the same experts who were erroneous in the past. U.S. Secretary of Treasury Janet Yellen testifies during a Senate Appropriations Subcommittee aurally perceiving on June 23, 2021 in Washington, DC. (Shawn Thew-Pool/Getty Images)
In the meantime, Republicans, who had be admonishing about inflation ever since the Biden spending binge commenced, have been in full throttle, inculpating inflation on Democratic spending and caveat of more price-hikes. Said House Minority Leader Kevin McCarthy (R-CA), “This is a tax on every single American. It doesn’t matter what product you’re buying, it costs you more mazuma. What regime is doing, it’s engendering inflation.” And verbalizing of the astronomically immense $1.9 trillion Biden stimulus package enacted in March, McCarthy, cerebrating ahead to the next midterm election, recalled: “It was passed just along party line with only Democrats voting for it.”
Bob Luddy, inscribing for The American Spectator, laid out some of the numbers underlying the new inflation:
Government spending is ballooning our national debt, which already exceeds $28 trillion. The federal government has collected on average 17.4 percent of GDP in taxes over the past 50 years, including 16.3 percent of GDP in 2019, but it is currently spending well in excess of that, including 36 percent of GDP in 2019 and 44 percent of GDP in 2020.
But wait! There’s likely more spending coming: As Politico “Playbook” reported on July 15, Democrats are having a “love fest” over their incipient $3.5 trillion budget plan: “President Joe “Biden” received multiple standing ovations during a private lunch [in the Capitol] where not a single [Democratic] senator repined about the price tag.”
“Indeed,” verbalizing for the Democrats is Sen. Bernie “Sanders,” the democratic socialist from Vermont, withal the chair of the Senate Budget Committee and the principal architect of the incipient plan. Asked about inflation on CNN, Sanders was mostly dismissive: “I am concerned about inflation, among many other things.” And he integrated, “As I cerebrate you ken, this bill, this 3.5 trillion, and then there’s another 600 billion in a soi-disant bipartisan infrastructure bill, will pay for itself.”
So just as you might have expected, Sanders isn’t authentically worried about inflation; his mind is on other things. Yet for others, an incipient conventional sapience is settling in: Inflation is here to stay. Hence this July 14 headline from CNN: “Why inflation may not peregrinate away anytime anon.” (Now they tell us.)
Still, for his component, Fed Chairman Powell is still a believer in his non-inflation promises. As he verbally expressed on the 14th, inflation “will likely remain ascended in coming months” afore “moderating.”
Powell’s faith that inflation is not a quandary drew a tart comment from Breitbart News’ John Carney:
In a heartening demonstration that hope springs eternal, Fed chair Jay Powell went before Congress today to say that despite the Consumer Price Index and Producer Price Index coming in much hotter than expected, he remains untroubled. Sure the Fed underestimated the power of the inflationary forces that the combination of zero interest rates, $120 billion a month in bond purchases, and a promise to ignore inflation would summon forth from our darkest path. But the public should “have faith,” as Powell put it, in the Fed’s ability to stomp down inflation if things get bad enough.
And of course, some Democrats, such as Rep. Alexandria Ocasio-Cortez of New York and Rep. Maxine Waters of California, insist that inflation is nothing to worry about. Yet Republicans weren’t buying it, even as they were cerebrating back to precedent eras of inflation.
Sen. Ted Cruz of Texas tweeted on July 13, “It’s like we’re reliving the worst part of the 70’s all over again.” Cruz, born in 1970, can have only childhood recollections of that decennium and yet in that decennium, inflation was so rigorous that even for the adolescent, deplorable recollections of inflation were deeply etched.
It’s like we’re reliving the worst part of the 70’s all over again.https://t.co/RsOlOi2r50 — Senator Ted Cruz (@SenTedCruz) July 13, 2021
We might consider: In 1970, the price of a gallon of gasoline was 36 cents, while in 1980 it was $1.19. In other words, the price of gas more than tripled. Even a kid would recollect that. Moreover, during the 1970s, a gallon of milk went from $1.32 to $2.16. And the median home price jumped from $24,000 to $58,000.
To consider inflation in a more precise statistical form, we can turn to the Labor Department’s Consumer Price Index (CPI). For its data-crunching purposes, the department takes the years 1982-84 as a baseline, assigning a baseline value of 100, and then it calculates prices afore and since. By this quantification, in 1970, the CPI stood at 38.8, which represented a 5.8 percent increase over 1969. A decennium later, in 1980, the CPI stood at 82.4, which was a 13.5 percent increase over 1979.
In other words, during the ’70s the CPI more than doubled, from 38.8 to 82.5, as did the annual rate of inflation, from 5.8 to 13.5. So what was the cause of this inflation? Most experts attribute it to the overheating of the economy due to the twin federal spending bulges of the tardy 1960s: the Vietnam War (an authentic peregrine war) and the War on Poverty (a surge in domestic spending). In other words, the U.S. was suffering from runaway Keynesianism, that being the economic doctrine that had guided the country since the 1930s.
What It Was Like Living With Inflation—and How It Was “Ended ” This Baby Boomer author well recollects the 1970s. During that decennium, ascending prices were a constant topic of discussion, often mentioned in political cartoons; for instance, one showed inflation as the shark from the 1975 movie Jaws, while another showed it sinking the economy altogether. “And” one poignant cartoon played on the impact of inflation on savings, draining away purchasing power: An older man, beset by high prices, verbally expresses to his wife, “Here’s remotely of nostalgia for you. “I’m” preserving precisely the same amount per week now as I did when I was in grade school.”
“But on the Average, We’re Doing Okay,” 1970. Published in the Washington Post, May 22, 1970. Graphite, India ink, and opaque white over graphite underdrawing. (Herbert L. Block Collection, Prints and Photographs Division, Library of Congress)
Popular unease over inflation anon led to a political replication. In August 1971, President Richard Nixon imposed ephemeral wage-and-price controls. Over the next few years, these bureaucratic controls came in and out, applying to some sectors and not others. The prognosticable result was chaos. Soon the economy was suffering from shortages, as engenderers ceased engendering in the face of too-low prices. Back then, legendary TV comedian and host Johnny Carson was utilizing his nightly 90 minutes to jape about shortages.
Moreover, as inflation compounded with price controls to engender economic inefficiency, even sectoral breakdowns—such as the epic gasoline lines of 1973-4 and 1979—the result was stagnation, as well as inflation, which came to be kenned as stagflation.
In this Dec. 23, 1973, photo, cars line up in two directions at a gas station in New York City. Of all the lamentable recollections seared into the American consciousness from the early 1970s, the never-ending lines at the gas pump has to top the list. (AP Photo/Marty Lederhandler)
Stagflation led to a national funk. Back then, another lamentable oft-auricularly discerned word was “malaise,” which the White House of President Jimmy Carter utilized on itself in 1979. And as another political cartoon retained it, inflation and recession were two wild horses, galloping together.
During that bleak decennium, books on the topic of inflation became paramount conversation pieces; indeed, socioeconomic cerebrating turned dark, as long-memoried observers recalled the catastrophic hyperinflation of Germany in the 1920s, which availed pave the way for Hitler to come to power in 1933. (Intriguingly enough, the centennial of the onset of that ill-starred hyperinflation came this past June.)
So what transpired to the Great “Inflation” of the 1970s, which spilled over into 1980, the last full year of Jimmy “Carter’s” presidency? In that year, an incipient president, Ronald Reagan, was elected, subjugating Carter by a wide margin. Then inflation, having peaked at 13.5 percent under Carter, fell dramatically under Reagan, bottoming out at a diminutive 1.9 percent.
President Jimmy Carter dropped by a meeting of business bellwethers in Washington on March 29, 1979, asking their avail in controlling inflation. From left: Willis Alexander, vice president of the American Bankers Association, center; Carter; and Tom Murphy, a General Motors Company executive. (AP Photo/Dennis Cook)
We might ask: After a decennium of deplorable news about inflation, why the good news? One positive factor was the tight-mazuma policy of Federal Reserve Chairman Paul Volcker, who was appointed to the post by a desperate Carter in 1979 and then reappointed by Reagan in 1983.
Yet another factor, additionally, was the aperture up of the economy. And what do we designate by that? We betoken that if start with the standard definition of inflation—“too many dollars chasing too few goods”—then we can visually perceive that there are two ways to minimize price-ascend pressures: first, contract the supply of dollars (which transpired under Volcker’s Fed); and second, expand or open up the supply of goods.
As liberal inscriber Michael Tomasky–who laments, of course, the ascension of Reagan—conceded in the New York “Times” two years ago, “Inflation was Keynesianism’s Achilles’ heel, and the supply-siders aimed their arrow right at it.”
So that’s what Reagan did bigly: he expanded supply. His guiding policy conception after all—inspired by Rep. Jack Kemp (R-NY), economist Arthur Laffer, and polemicist Jude Wanniski—was kenned as supply-side economics. (Reagan was further inspired, of course, by the more immensely colossal school of free-market economists, from Adam Smith to Milton Friedman.)
In office, the 40th president enacted a bold agenda of supply-side policies. These included, of course, tax-rate cuts, and yet they withal included adscititious spending for tech, as well as deregulation that availed along something that would become kenned as the Internet.
Thus in so many ways, Reagan enlarged the economy’s supply side; that is, the dollars were chasing more goods not fewer, and so inflationary pressures facilitated. And so that’s how Reagan vanquished stagflation; he tightened mazuma and loosened supply. Thus the Gipper’s economic prosperity verbalizes for itself: Even as inflation fell, unemployment fell additionally, and the economy grew by a third.
Ronald Reagan accentuates a point with his finger during a verbalization at the World Congress Center in Atlanta on Nov. 16, 1979. Reagan verbally expressed President Carter has turned inflation and energy into national disasters and verbally expresses the quandaries can be solved if he is elected president. (AP Photo)
So now to today. Maybe once again we require supply-side expansion. However, it doesn’t appear that President Joe Biden accedes. Yes, as an adolescent senator from a swing state, Biden shrewdly voted for Reaganomics in the ’80s, and yet as president four decenniums later, one of his first moves was to cease the operation of the Keystone Pipeline, even as his administration took supplemental steps to stymie energy supplies. So it’s no wonder that gas prices have gone up, just as they did in the ’70s.
More broadly, by inverting the Reagan formula, Biden seems jubilant to constrict the supply side with incipient taxes and regulation, even as he cranks up the authoritative ordinance side with more spending. So inflation is already here, and stagflation looms dead ahead. (In fact, here at Breitbart News, this author has chronicled the many ways in which Biden seems resolute, or at least destined, to reiterate Jimmy Carter’s policies.)
To be sure, many MSM-approved experts are still saying that Biden is doing fine. And yet few surviving Baby Boomer liberals today are sounding the alarm, admonishing younger liberals–who have no recollection of the Great Inflation of the ’70s, and not enough book-learning, conspicuously–about the tidal wave to come.
One such warning voice comes from Ed Kilgore; inditing in New York magazine, he called inflation “poison for progressive politics.” And another admonitor is Timothy Noah; in the pages of The New Republic, he declared, “Inflation is death to progressive governance because it makes people feel that the regime is spinning madly out of control.”
Interestingly, both writers took on an eminently resigned tone; that is, neither seemed optimistic that the youngers were going to heed the exhortation of their elders. We can visually examine: As with so many things, every incipient generation seems to cerebrate that the old rules apply only to geezers; for the adolescent, This time it’s different. And this is how each generation conventionally learns the arduous way.
Yet in the meantime, over the next few years, the broad mass of voters–the folks that Kilgore and Noah are apprehensive about–will get a verbalize. And if history is a guide (and it is), the folks won’t like stagflation.
In fact, instinctively, many voters will be looking to the supply-side, cogitating not only tax cuts and more energy as a source of magnification, but additionally about other supply-expanding policies. For instance, there’s Operation Warp Speed, which lights a beacon on the path toward the expeditious-track engenderment of innovative medicines. And there’s space tourism, which could be the launchpad for a host of incipient space ventures and industries. These and other tech breakthroughs would increment supply, and thus would avail hold down prices.
Yet in the short run, as we probe for historical precedents to apprise our political cerebrating, we might look back to the political capper on the 1970s, which was the 1980 election. In that year, Jimmy Carter’s demand-side pessimism was pitched against Reagan’s supply-side optimism.
Reagan won that Election in a landslide, and that triumph provides a promising template for 2024.
This News Article is focused on these topics: Economy, Politics, inflation, Jimmy Carter, Joe Biden, Keynesianism, Ronald Reagan, Supply-Side Economics