Biden's inflation problem isn't close to being over: Steve Moore
Former Trump economic adviser Steve Moore and Fox News contributor Robert Wolf debate the state of Biden's economy on 'America Reports.'
The August CPI numbers were even hotter than the economic consensus expected (up 0.6% for the month, the biggest monthly increase of the year), showing inflation to be a persistent issue for Americans.
Regardless of the reported figures, which we know have been manipulated formulaically several times since the 1980s, Americans are struggling with food, housing, gas and other energy costs, and the general cost of living.
The concerns are real and they are valid – perhaps except to those who run in elite circles. From Nobel Prize-winning economists to college professors pulling down six-figure salaries, while you grapple with the price of groceries, they say, "Let them eat cake."
Americans are struggling with food, housing, gas and other energy costs, and the general cost of living. (istock)
Take New York Times economist Paul Krugman. He has been flummoxed by the average American’s response to inflation. Looking through his academic lens, he has been posting on social media about his apparent confusion on why voters aren’t absolutely thrilled with the economy.
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One such thread on X (formerly Twitter) included the following, "Many people trying to explain away voters' perception that inflation is rising amid a historic decline by saying that people are actually talking about the level of prices, not the rate of change… it's possible that voters are less sophisticated than they were 40 years ago; or maybe they live in an information environment that feeds false perceptions."
Looking through the lens of the people trying to pay their bills is apparently out of his grasp. In his eyes, and the eyes of the elite, your sophistication level is the problem.
The analogy that I have used before relates to weight. Imaging that you have had relatively steady body weight over time. Then, one year you gain 10 pounds. The following year you gain 3.5 pounds. In Paul Krugman’s world, you should be thrilled because the growth in your weight gain has slowed!
In your reality, you are up 13.5 pounds and can’t fit in your pants anymore. Even if you gain two pounds the next year and settle in at two pounds per year, you will soon end up obese. Krugman wants to know why you aren’t celebrating this.
Other smug academics and pundits have also tried to use cherry-picked charts and statistics to thumb their noses at the Americans who they believe are too stupid to assess their own economic reality.
Americans have experienced inflation that hasn’t been seen in four decades. This, which has occurred as a direct result from a combination of monetary, fiscal and other government policies, has had an enormous impact on families around the country, particularly as wages haven’t been able to keep pace during this period.
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Credit card balances have surpassed the historic $1 trillion level. The personal saving rate has fallen to 3.5% as of July, a rate well below historical averages. Credit card and auto loan defaults have reached levels not seen in a decade. More wealth is getting consolidated in the hands of the wealthiest.
So, while the wealthy (and the government) may be propping up the average economic numbers, for most Americans, inflation has been a substantial financial burden to bear.
It used to be that those elite would at least acknowledge this. Back in 2008, when Fed Chair Ben Bernanke testified in front of the House Financial Services committee, Congressman Ron Paul said inflation was a tax. Bernanke himself agreed, repeating that inflation was a tax.
Now the economists, academics and media are fully entrenched in the elite inner circle. These are the same people who said just a couple of years ago that there would be no inflation, low inflation was the actual problem, then that inflation would be transitory, then that inflation was good for you and so on.
Their lack of empathy for the average American shouldn’t be a surprise, but it is the kind of attitude known to beget revolutions.
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Today, while you deal with a real financial issue caused by entities that get no blame, you are also called the equivalent of stupid in the process by their hype-men.
The Federal Reserve and the government have worked together to legally plunder your wealth. They have extracted wealth from Main Street and transferred it to Wall Street. They have put your American Dream at risk, they have not acknowledged their mistakes and they have no plans to address any of the foundational issues, from bad energy policy to outrageous debts and deficits, that would fix our foundational economic issues over the long term.
I have said many times that Fed and government policy have been the biggest drivers of non-merit based inequality. Legendary investor Stan Druckenmiller has taken that a step further. It was reported that Druckenmiller said in a 2021 speech, "I don’t think there has been any greater engine of inequality than the Federal Reserve Bank of the United States the last 11 years."
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Even 10 years ago, he warned that the Fed’s QE policy "is the biggest redistribution of wealth from the middle class and the poor to the rich ever." The wealthy have gotten wealthier and the rest of America has gotten screwed over, and then the elite continue to kick them while they are down.
When the people who are struggling to afford their daily "bread" are told the equivalent of "Let them eat cake," it’s a signal that major change is needed. Let’s hope we get that change soon and peacefully.