With the election fast approaching in six weeks, it is time to talk about inflation again (last written about in late August – Inflation Reduction Act). This is the number one voter concern, followed closely by illegal immigration and crime. While crime and the border crisis may be distant to many, inflation affects everyone.
Many on the left believe that abortion is of primary election concern, but it does not rise to the level of concern of the larger issues. I can understand why the abortion industry and their supporters are upset with the recent Dobbs decision, but these things will work out in the individual states as the issue is debated. Inflation is a hidden tax on everyone, but especially the poor who feel the brunt of its effects.
Since gasoline prices have declined by 20 percent over the past two months, Democrats feel they have ‘dodged the inflation bullet’ at least for now. However, last week’s release of inflation numbers tells us something different. The overall inflation rate jumped to 8.3 percent, and core inflation (inflated prices that discount fuel and groceries) is 6.3 percent. Economists tell us that core inflation suggests that inflated prices are deep within the current economy and will be difficult to correct.
In his 60 Minutes interview with Scott Pelley, President Biden may deny that inflation is increasing, but this is whistling past the graveyard – the American people know. You don’t need to have a fancy economics degree or a stable of experts to know how and why you are getting slammed with high prices at every turn. When the paycheck doesn’t match the expense, anticipate credit card balances going up. Rents and stress on young people are especially concerning as drug use and suicide tick upward.
Democrats don’t do inflation well. I wish that were not the case, but the evidence is palatable. Historically, Democrats are the “tax and spend” party. Nothing in the political DNA would suggest anything different. Neither raising taxes nor spending more money on favorite programs are designed to curb inflationary pressure. At least Republicans are known for cutting taxes, which means that taxpayers can keep more of their hard-earned money rather than sending it to the IRS every April to be wasted on Congressional whims, i.e., college student loan forgiveness. So, when Joe Biden reaches back into his ‘inflation quiver’ for more ammo, he may be shocked to learn he has run out of arrows.
Belatedly, the Federal Reserve is attempting to tamp down inflation by raising interest rates; last week’s 75 basis point increase is the third such raise in the last three months. The Fed is in charge of monetary policy, so they manage the Federal Funds Rate, where every lending institution gets the money to make loans. They are ‘tightening the screws’, which means that it is more expensive and difficult to borrow money – for home loans, automobiles, construction, etc. The Fed is intentionally trying to remove money from the economy to decrease inflation to the target of two percent. It is a painful process and very likely to force the economy into recession … if we’re not already there.
Congress oversees fiscal policy, which is a fancy word for spending. Led by the Biden Administration for the past 18 months, they have been spending money like ‘drunken sailors.’ Congress has spent something like $6 trillion since Biden came into office. It’s like pouring gasoline onto a fire. While the Fed is trying to put the fire out, Congressional Democrats are stoking the flames. It doesn’t make any sense. Again, the Democrat’s policies are not geared to tackle inflation.
So, what are Republicans offering as an alternative this election season? In their recently released “Commitment to America,” the first of four areas are to strengthen the economy by fighting inflation and lowering the cost of living; make America energy independent and lower the price of fuel; and strengthen the supply chain and reduce the dependence on China. There aren’t many specifics from Republican Leader McCarthy on how they will do this, especially since they won’t get much help from the Biden Administration, but this is their primary commitment, should they be elected to the majority in November, directly addressing the greatest concern of the American people.
In our local, redistricted House race between two incumbents, Neal Dunn and Al Lawson, it will be interesting to see how they approach this challenge. Republican Dunn has signed on to the commitment, so that is where he stands. How Democrat Lawson will respond will be interesting to watch. In his last communication to local voters, I don’t recall any programs that would address inflation.