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“U.S. inflation surged to a new four-decade high in June because of rising prices for gas, food and rent, squeezing household budgets and pressuring the Federal Reserve to raise interest rates aggressively -- trends that raise the risk of a recession. The government’s consumer price index soared 9.1% over the past year, the biggest yearly increase since 1981.” AP News
The right criticizes the Biden administration for failing to take action to reduce inflation.
“[The new data] should end the silly talk that the upcoming midterm elections will revolve around abortion, gun control, or the January 6 committee’s findings. Runaway inflation is the five-alarm fire that is burning down the American economy. The Biden administration keeps telling Americans that things are about to get better — that skyrocketing prices for gasoline, food, and just about everything they buy will start to ease. And month after month, Americans keep waiting…
“One of the many problems of the Biden administration — and in fact one of its most severe, self-inflicted wounds — is the president’s reflexive defensiveness and denial when presented with bad news, new challenges, or evidence of failure.”
Jim Geraghty, National Review
“The greatest tragedy is for American workers, who are suffering the largest reduction in real wages since the 1970s. Real average hourly earnings fell 1% in June alone and are now down 3.6% in the last 12 months… Real wages have fallen in 10 of the last 13 months, and they have now fallen more since President Biden took office than they did during the recession caused by the financial crisis. From December 2008 to a trough in real earnings in February 2012, real average hourly earnings fell 1.8%… They have fallen 4.8% since January 2021…
“Whatever short-term financial help to Americans that Democrats provided with their trillions of dollars in welfare payments has been more than offset by inflation. The U.S. needs a return to growth economics rooted in stable money, supply-side tax policy, deregulation and fiscal restraint. That agenda hasn’t been as important since 1980.”
Editorial Board, Wall Street Journal
“The Peterson Institute for International Economics calculates that even a 2-percentage point reduction in tariffs could lower inflation 1.3% and save $800 per household. Additionally, the president could trim inflation by reversing his expansion of Buy America laws as well as Davis-Bacon policies that raise the cost of government contracts. He could push to repeal the Jones Act that hikes shipping costs. However, every one of those reforms would anger organized labor, and the self-described ‘most pro-union president in our history’ has seemingly prioritized union endorsements over reducing inflation…
“Other disinflationary policies rejected by the White House include: reversing the higher ethanol blend in gasoline that raises food prices (yet would anger many farmers and Iowa caucus voters), further encouraging domestic oil and gas production (environmentalists), reversing new environmental regulations raising infrastructure costs (environmentalists), resuming student loan payments (younger liberals), and paring back runaway spending (progressives)…
“The White House need not endorse every disinflationary policy. Yet rejecting each of the above proposals while still pushing new federal spending reveals that — despite rhetoric to the contrary — fighting inflation is not a serious priority at all.”
Brian Riedl, New York Post
The left is cautiously optimistic that inflation will soon start to wane.
The left is cautiously optimistic that inflation will soon start to wane.
“Headlines are unlikely to announce, ‘Hey, the economy is not all terrible!’ But amid inflation worries and fears of recession, there is plenty of good economic news. June’s job numbers were stronger than expected, with 372,000 jobs added and the unemployment rate steady at 3.6 percent. That means the country has recovered virtually all the jobs lost during the pandemic…
“And on the inflation front, gas prices have been steadily declining for almost a month, even without gimmicks such as the proposed gas tax holiday… The Fed will need to continue raising interest rates, thereby increasing the chance of recession. But there seems to be more optimism about a ‘soft landing,’ which UBS Global Wealth Management now puts as the most likely scenario (40 percent), rather than recession or stagflation. Citi pegs the chances of a soft landing at 55 percent.”
Jennifer Rubin, Washington Post
“Both the pandemic-induced recession and the recovery from that recession were, to use the technical term, weird, and maybe we shouldn’t be surprised the measures we normally use to track the economy aren’t working too well. My guess about what’s really happening is that the economy is indeed slowing, but probably not into a recession, at least so far. And a moderate slowdown is actually what we want to see…
“At the beginning of 2022, the U.S. economy was almost surely overheated, and this overheating was contributing to (although not the only source of) inflation. We wanted to see the economy cool down before inflation got entrenched in expectations, and that’s an area where all the available data — slowing wage growth, inflation expectations in the financial markets, surveys that ask consumers what inflation rate they expect over the next few years — are telling the same story: Inflation is not, in fact, getting entrenched.”
Paul Krugman, New York Times
“The best, least painful way to fix [the] mismatch between demand and supply would be to dramatically expand supply. That’s easier said than done, however. How do you untangle global manufacturing and food supply chains, which are being disrupted by war, covid lockdowns and other freak events? How do you nudge more people into the labor force? How do you encourage oil companies to increase refinery capacity — which would help increase the supply of gasoline — when doing so requires expensive, long-term investments that these companies don’t think will pay off?…
“There are a few, more modest things federal policymakers could do to help with supply-side problems. These include allowing in more competition from foreign suppliers and ships. Or, fixing bottlenecks in our legal immigration system could increase the supply of workers. So far, the Biden administration and federal Democratic lawmakers have been reluctant to adopt such measures… The main lever politicians seem to want to pull in times of economic turmoil is to cut taxes or otherwise send out money. And, look, in some scenarios sending out checks is helpful… But now is not one of those times.”
Catherine Rampell, Washington Post
Power Rangers mega fan assembles largest collection in the world.
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