The other day I was at the grocery store, grumbling that the house-brand refried beans, 69 cents for quite some time, are now 89 cents, an increase of more than 20 percent. Then I noticed that the house-brand dry-roasted peanuts, $1.99 since forever, have gone up by more than 10 percent.
If you shop for groceries and pay attention, you’ll notice that things have gotten more expensive. It often follows this pattern: a longstanding price, a brief sale during which the price is marginally less, then a return to a “regular” price that is much higher than it was before the sale. Perhaps you purchase gasoline, you vile polluter. You might have discovered that it, too, has gone up by a lot.
My weekly trip to to the store came the day after I paid my phone bill, which has risen by $15 in the last two months. Best I can tell, the company’s cost for sending me the dial tone and internet has not risen; the service certainly hasn’t improved.
The fact is, prices are going up. At street level, where you and I live, it’s by more than the small amount the government reports. It is likely to get worse. It’s called inflation, and it matters, because it means that your money is worth less. If you buy a can of refried beans for 89 cents when it used to be 69 cents, the difference isn’t in the can of beans, it’s in the value of your money. As pertains to beans, your dollar has dropped more than 20 percent in value. In terms of gasoline, it has dropped even more.
This is good for people (and governments) deeply in debt, because they’ll repay their loans with less-valuable dollars. It is awful for people who have worked and saved, because their savings are shrinking as they, powerless, watch.
Jimmy Carter is a smart man, but he was not smart enough to stop the inflation that roared during his administration. A big problem with inflation is that the prices never come back down; in fact the Federal Reserve takes pains to prevent what’s called “deflation,” or a restoration of the value of money. So while Carter-era inflation was ultimately stopped by Ronald Reagan, its effects remain with us 40 years later. Inflation is growing once again, atop the costs Carter gave us, in a tragic reversal of the miracle of compound interest.
A close friend of mine, knowledgeable in economic affairs through a long career in the securities market, assures me that the problem is a temporary one, due to “supply chain” issues. And by the usual supply/demand calculation, he’s right. But prices are being interfered with.
Joe Biden has never been accused of possessing intelligence. His situation is now made worse by what appears to be senility, but that doesn’t matter — he owes his political success to a lifetime of doing what he was told by his political and union bosses, which he continues despite his diminished acuity. The persons now tugging at his (implanted) hair would love nothing more than a “disruption” of the economy, and that’s what they’re working hard to produce. They’re bringing about the things they cannot achieve through legislation by manipulation of the economy instead, which will ultimately lead to debt devaluation — repayment of valuable dollars borrowed with less-valuable dollars. Inflation is their friend, but not ours.
Last week, Barack Obama said in an interview that “Joe and the administration are essentially finishing the job.” What job? Among other things, gasoline prices. Obama said in 2012 that gas should be more expensive. Biden has moved to reduce the supply of oil products and natural gas. That increases prices, including the cost of getting goods to retailers. It’s a supply chain issue, but it’s anything but temporary. So while the administration can’t make electric cars cheaper (even if that were a worthwhile goal, which there’s reason to believe it isn’t — if you drive an electric car your hands are stained by the blood of foreign children according to the World Economic Forum), it can make gasoline-powered cars more expensive. And the government has long subsidized electric cars, up to and including Biden’s photo-opportunity drive in an electric Ford F-150 pickup to promote his plan to spend $174 billion of your dollars on electric vehicles.
The result is a permanently more expensive supply chain, nothing temporary about it. The new costs are added into the prices of goods, which is to say inflation in what you and I pay for the things we buy.
There’s been a push to raise the national minimum wage, the price of basic labor. The idea of a national minimum wage is itself a little bit silly, because a “living wage” varies from place to place. It costs less, at least for now, to live in Amesville, Ohio, than it does to live in New York City. Imposing on the nation a minimum wage suitable for New York City raises the price of everything, for everyone.
Ah, but how about increasing unemployment payments so that people put out of work by the pandemic can receive in many cases more than they made when they were working? In parts of the country now, leaving unemployment to return to work means a cut in pay. By extending the pay-for-no-work program Biden and his allies have effectively raised the minimum wage, to the point that more must be paid to lure people from their homes. Those costs are passed along to you and me as higher prices of consumer goods. The extra dollars that people will be paid will be worth less (and taxed at higher rates).
It’s a serious enough issue that half the states have decided to cut off the “enhanced” unemployment benefits ahead of the federal date, September 6. Ohio, I am happy to say, is among them. But by then — by now — much damage is done. Your savings are not worth what they were even a year ago. And it has been financed with dollars that all but require inflation if they are ever to be repaid, as the government prints and spends money it doesn’t have. Oh, and interest rates will go up to compensate. (During the Carter administration the prime lending rate reached 21.5 percent, with 18 percent mortgages.)
We have seen it before. It didn’t turn out well. Here’s how a writer at Nasdaq puts it:
“One of our chief realizations from studying Weimar Germany is the conviction that, if you take the willingness to inflate away a debt mountain, combine it with the political force to pay wages and spray money around no matter what, and then mix rising prices due to goods shortages with a dose of inflationary psychology, runaway inflation is what you get.”
So stock up on beans, while you can afford them, which before it’s over may become a store of wealth. Unlike gold or cryptocurrency, you can eat beans. And may need to, on your ride in the handbasket to you-know-where.
Dennis E. Powell is crackpot-at-large at Open for Business. Powell was a reporter in New York and elsewhere before moving to Ohio, where he has (mostly) recovered. You can reach him at email@example.com.
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