The Left’s Excuses for Inflation Are Getting More Absurd
Politico reports The Left’s Excuses for Inflation Are Getting More Absurd
The White House has particularly targeted meatpackers over the past several days. Its economists put out an analysis slamming meat processing companies for excessive profiteering, and press secretary Jen Psaki blamed “the greed of meat conglomerates” for rising prices. The oil and gas industry has come in for a similar pounding, and even Dollar Tree has been denounced for shamefully sticking it to the little guy. Warren has said the dynamic of rising prices and rising corporate profits isn’t “simply some inevitable economic force of nature — it’s greed. And, in some cases, it is flatly illegal.” In a similar vein, former Clinton labor secretary Robert Reich recently pinpointed “corporate giants with the power to raise prices” as “the real reason behind U.S. inflation.”
As for the meatpackers, the White House complains that just four companies dominate the market. But four companies have had an outsize market share over the past 25 years, and the price of beef has bumped around, roughly in keeping with overall prices, during that entire period. What’s happened during the pandemic is that there has been high demand that, combined with labor disruptions at meatpacking plants, has disrupted supply. Increased demand and limited supply, of course, equals rising prices. As the Economic Research Service of the USDA wrote in a report in October, “Prices have been driven up by strong domestic and international demand, labor shortages, supply chain disruptions, and high feed and other input costs.”
The situation is basically the same when it comes to oil and gas. Global demand has increased, while global supply hasn’t caught up. Domestically, oil production has risen since last year but is still below prepandemic levels. Biden claimed last month that the fact that finished gasoline prices haven’t declined as much as unfinished gasoline prices shows the oil and gas companies are engaged in anti-consumer behavior, but this argument obviously has no merit. The finished price often lags the unfinished price. Biden’s request for the Federal Trade Commission to investigate will lead to the same result as so many previous FTC investigations — namely, nowhere.
Politico concludes the FTC investigation is headed nowhere. Yes, that should be the case but that does not mean it will be the case. Every step of the way Biden has caved in to Elizabeth Warren's and the Progressive's demands to legislate by executive order.
No one knows what Biden might try by executive order. And if Nixon could order wage and price controls, why can't Biden?
The administrations new gas mileage standards by decree will also force prices higher.
Biden is demanding more power to unions and that means two things, more business disruptions and higher price.
"Free" education and "free" childcare? What will those cost? And we would be saddled with those right now were it not for Senator Joe Manchin.
Protective Shield Against Inflation
Eurointelligence had an interesting article the other day on events in Germany.
The CSU is now seeks protection against inflation.
Watch out for inflation laws
One of the often ignored aspects about higher inflation is its impact on political discourse. The rise of conservative counter-movements in the 1980s was preceded by the inflationary 1970s. Margaret Thatcher, Ronald Reagan, even Helmut Kohl owed their ascent in large part to the economic instability of the previous decade. In today's age of de-regulated labour markets and de-unionisation, inflation would give rise to more income inequality than it did in the years when wage and pensions indexation at least produced some degree of compensation. We still remember the fierce debate in the Bundestag in the late 1970s and early 1980s. Inflation was one of the dominant political themes at the time.
We thus read with interest that the CSU has discovered inflation as a political theme. For its annual seminar, to be held tomorrow, the party is proposing what it calls a protecting shield. The shield would consist of legally mandated positive interest rates for all pension products, and a compensation for inflation effects in income tax calculations. It would constitute an attempt to control inflation through fiscal policy. What is politically interesting is that Christian Lindner, the finance minister, has also demanded what he called an inflation brake, in analogy to the debt brake. So, as the ECB is increasingly becoming a fiscal actor, member states have now taken it upon themselves to control inflation. What can possibly go wrong?
Legally Mandated Positive Interest Rates
Yeah, go ahead and try.
The German 10-year bond yield is -0.040%. In Germany, the Annual inflation Hits 3.1%, the Highest Rate Since 1993.
So let's force pension plans to pay 3.1% when bonds earn less than zero. Someone tell me how this idea can possibly work.
That never matters because politicians never learn.
- Real Hourly Wages Have Risen Less Than a Penny a Year Since 1973
- Biden Goes After the 4 Top Meatpackers, Blaming Them for Inflation
- Persistent Delusion of the Far-Left Yields Inflation, Border Chaos, and Warrenesqe Policy
- Elizabeth Warren May as Well Be President, She Makes All Biden's Calls
Spotlight on Executive Orders
I discuss damages caused by the executive orders by Biden, Nixon, Kennedy, Obama, Trump, and FDR. It maddening but it's far more likely to escalate than stop.
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