Tag: inflation

Categories
free trade & free markets national politics & policies regulation

Egg Prices Crisis

eggs, inflation, bird flu

“Get used to high egg prices,” The Atlantic blurbed Annie Lowry’s February 27 article, “it was a miracle they were low in the first place.” 

Titled “It’s Weird That Eggs Were Ever Cheap,” it appears to have an agenda: prepare us for yet higher prices, or worse: no eggs.

“Consumers are furious,” explains Ms. Lowry, emphasizing that eggs are a very, very popular food. “Or at least they were, until a highly pathogenic form of bird flu spread to American flocks in 2022. Today, the Department of Agriculture is tracking 36 separate outbreaks across nine states. The disease has led to the death or culling of 27 million laying hens — nearly 10 percent of the nation’s commercial flock — in the past eight weeks alone.”

The culling of flocks — and which birds are selected — could potentially be the most controversial element of the story. Donald Trump, on the campaign trail last year, complained about the cull orders and promised to bring down egg prices fast. 

But his administration’s new five point plan is no quick fix:

  • subsidize on-​farm biosecurity upgrades
  • compensation to farmers forced to cull their flocks
  • investing in bird-​flu vaccines and therapeutics
  • nixing some regulations
  • increasing foreign imports. 

That comes to $1.5 billion spending increases to lower egg prices!

But it was a jokey comment by USDA Secretary Brooke Rollins that sent Trump critics into paroxysms. “I think the silver lining in all of this is, how do we solve for something like this?” said the Department of Agriculture head. “And people are sort of looking around, thinking, ‘Maybe I could get a chicken in my backyard,’ and it’s awesome.”

Ha ha. 

But taking the joke as a serious proposal? The yolk’s on them. 

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with Krea and Firefly

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
deficits and debt national politics & policies too much government

The Biggest

Congress, US Capitol, debt, government, inflation

Trump’s riding high, in the first week of his second term — but not regarding the biggest problem he faces, inflation and economic instability.

“When bondholders don’t see a credible fiscal path to be repaid for current and future government debt,” writes Veronique de Rugy at Reason, “they expect that eventually the central bank will create new money to buy those government bonds, leading to higher inflation.

“Recent inflation wasn’t just about money supply; it reflected the market’s adjustment to unsustainable fiscal policy.”

Winning, for Trump, cannot equate to Spending.

While Ms. de Rugy tries to explain this all in terms of a big-​picture economic analysis, she does not quite reach back in time far enough. We had stagflation way back when I was young. It was cured then not by decreased spending but by Paul Volcker of the Federal Reserve putting the brakes on money-​and-​credit expansion. He stopped inflation. 

A pure recession immediately followed, followed by recovery in the new administration, Ronald Reagan’s, who helped reduce the rate of growth of government (and not much else).

Inflation could, theoretically, be handled by the Fed alone, now, as then.

Except — the federal government can hardly now afford to service existing debt, which would skyrocket with the nitty-​gritty of the Fed’s cure, higher interest rates. 

Today, debt service (paying just the interest) approaches One Trillion Per Annum. 

“A crucial tipping point was reached in 2024 when the interest expense on the federal debt exceeded the defense budget for the first time,” Nick Giambruno summarizes at The International Man. “It’s on track to exceed Social Security and become the BIGGEST item in the federal budget.” 

Increasing it yet more would cripple the government.

The only way out, if there is one, is a radical decrease in spending and deficits, as de Rugy advises. Trump’s path to success is somehow accomplishing that.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with Flux and Firefly

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
inflation and inflationism national politics & policies

Quips & Stunts

Donald Trump, Kamala Harris, economy, inflation, democracy, government

The Epoch Times has produced a handy policy comparison between the two major-​party candidates for the presidency of the United States, former President Donald Trump and current Vice President Kamala Harris. 

Maybe issues don’t matter so much now, though: more talked-​about is Trump’s stunt scooping fries at McDonald’s, which got Democrats so upset (to their detriment), or Kamala Harris’s bizarre quip at a rally where two young men shouted “Jesus Is Lord!” and “Christ Is King!” as they were being thrown out. The Veep’s response that they were at the wrong rally was construed by many to suggest that her supporters aren’t Christians.

Nevertheless, The Epoch Times is right to emphasize policy. It’s a big subject, so let’s just compare the candidates on “The Economy.”

Donald Trump “Pledges to reduce inflation by increasing American energy production, cutting wasteful government spending, and preventing illegal immigration,” and “Seeks to lower commodity prices by ending global wars.” Are these “good for the economy”? Probably; mostly. But distant from the heart of inflation. 

Worse, Trump allegedly “‘Strongly’ feels presidents ‘should have at least a say’ in the Federal Reserve’s monetary policy decisions.” The Fed is indeed key, but the only way to reduce inflation immediately is through the kind of policies presidents tend to hate — for example, the deflation that Fed Chairman Paul Volcker performed on Jimmy Carter’s economy that helped get Reagan elected.

Kamala Harris sticks to progressive standards, proposing “a federal ban on corporate price gouging on food and groceries to tackle inflation,” which would backfire into a major economic debacle, complete with shortages and calls for rationing and worse. It fits in nicely with another typical progressive plank, calling for “raising the minimum wage,” which would lead to less employment partly through increased robotization of businesses now employing the workers affected, the low-​skilled (the ones Trump calls “great”).

Looking over their substantive policies, it’s easy to see why “culture war” issues prevail.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with Midjourney and Firefly

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
inflation and inflationism international affairs too much government

Is Milei Making It?

After libertarian economist Javier Milei surprised the rest of the world by winning the presidency of Argentina in 2023, the question became whether — or how quickly — he could slash government programs, privatize nationalized firms, and set free a flatlining government-​controlled economy.

A president can do some things on his own. But Milei requires the cooperation of the legislature to institute many substantial reforms. And for months his legislative agenda has stalled.

Now some of it is being enacted. On June 28, the Chamber of Deputies passed a sweeping package of bills that Reuters dubbed Milei’s “first big legislative win” and Bloomberg’s Manuela Tobias characterized as “deregulat[ing] vast swaths of the economy and boost government revenues.…”

The enacted reforms include provisions to make it easier for employers to fire workers and to deregulate the oil and gas industry. Milei was able to privatize only a few of the dozens of state firms that he wanted the government to unload.

Tobias notes that the passage of Milei’s reform package, “albeit significantly watered down,” is impressive considering that members of Milei’s own party constitute less than 15 percent of the lower chamber.

Milei’s most obvious success has been fighting inflation, which according to Deutsche Welle is “down from around 25 percent per month last December to 4.2 percent this May.” This is a major achievement for a figure outside the mainstream of globalist standard opinion, who has called himself an “anarcho-​capitalist” (of all things) and was labeled by the German paper “right-​wing populist and economically liberal.”

Terms mean different things in different countries: it’s pretty obvious that Milei’s program has nothing to do with that of American “liberals” such as President Biden and his partisans.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with Midjourney and Firefly

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
national politics & policies political economy

The False Gospel of the Printing Press

inflation, economist, monetary theory

It’s been a while since I’ve mentioned “Modern Monetary Theory,” popularly known as MMT.

While MMT is not popular here, it is gaining adherents outside the ranks of Common Sense readers like a new Ponzi scheme taking on suckers.

Modern Monetary Theorists go on and on about the gospel of printing money, like they just discovered that the Fed-​and-​Treasury act of borrowing within the banking system isn’t the only way to inflate the money supply.

You can indeed “just print money”!

Granted, the MMTers do a lot of fancy footwork, or silver-​tongue-​work — the closest they get to hard money — to avoid the infamous consequences of monetary inflation, “price inflation” being just one of them. They are so enamored of the money press that they’re like teenagers discovering sex: didn’t you old folks know about this great thing?

It would be comical were it not … inflationary.

At the present moment in history, of course, MMT is in a tricky situation: huge increases in the money supply during the COVID period resulted in no small amount of … huge price increases.

“Whatever you call it, MMT is printing money,” Matt Taibbi just wrote in a terrific May 18 piece, “and no matter how sure you might think you are that it will work, you aren’t, and can’t be. Sure, our leaders have been doing it, printing $4 trillion through multiple rounds of QE and $5.5 trillion more in the CARES Act, and sure, that last spree only inspired about 20% inflation so far. Still, any economist who says with a straight face he or she is sure this experiment won’t end with your kids using dollars as toilet paper is lying.”

Or just engaging in old-​fashioned money-crankism. 

The old get-​something-​for-​nothing racket. MMT’s just the latest form.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with PicFinder and Firefly

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
Accountability folly political economy

Inflation & the Infirm Incumbent

Joe Biden, inflation, economy

“From President Joe Biden’s point of view, Americans ought to be thrilled with the recent trends in inflation,” writes Eric Boehm at Reason, who quotes the president: “Wages keep going up and inflation keeps coming down.”

True enough, but, Mr. Boehm goes on, “pointing at the charts and regurgitating economic figures doesn’t seem to be as convincing as the president might hope.”

You’ve seen the left-​of-​center memes mocking Americans for thinking the economy is bad when it is, instead, g‑gr-​great!

But prices for food and gasoline, after the big bulge caused by all those COVID checks and subsidies, did not go back down to previous levels. And rising wages after the “Great Suppression” of the lockdowns seem at best a verypartial return to better times.

Boehm offers some context. “It makes sense that the recent run of inflation would leave a psychological scar. After all, the peak inflation rate of 9.1 percent in June 2022 was not only the highest annualized rate seen in more than four decades, it was also more than twice as high as the average inflation rate in any year since 1991.…” And inflation has not stopped. “In March, the annual inflation rate was 3.5 percent. Yes, that’s 60 percent lower than the peak rate in June 2022, but that’s still higher than the average annual rate in every single year between 1991 and 2021, except for 2008.”

And then there’s the higher interest rates, which, Boehm plausibly asserts, compounds our perceptions that “inflation is a major problem.”

This is a huge issue for Biden. Boehm cites the political lore: “If you’re explaining, you’re losing,” and notes that, “unfortunately for Biden, his task in the run-​up to November’s presidential election is explaining to people that they shouldn’t feel like inflation is still a problem.”

Who you gonna believe: Your cash register receipts or a feeble, corrupt, multi-​millionaire lifelong politician?

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with PicFinder and Firefly

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
ideological culture national politics & policies political economy

Shrinkflation, Shrunk Nation

Joe Biden, inflation, ice cream, economics

In another pathetic pre-​recorded speech, played before Sunday’s Super Bowl, President Joe Biden lambasted America’s corporations for “shrinkflation.” 

“As an ice cream lover,” he explained in the vid, “what makes me the most angry is that ice cream cartons have actually shrunk in size but not in price.”

The Guardian expands upon the president’s gripe: “Inflation dropped to 3.1% in December but some companies are thought to have responded to rising costs by marginally shrinking the size of products — shrinkflation — as well as changing recipes to reduce the amount of more expensive ingredients — sometimes known as ‘skimpflation.’”

My, oh my, so businesses must adjust to inflationary pressures as well. 

When the costs of their inputs go up, they do not automatically become charities. Knowing that consumers do not sport infinite incomes and demand schedules utterly “inelastic” — buying the same goods in the same quantities even at higher prices — they often adjust by reducing quality or quantity.

It is one of many ways that inflation hurts us.

Inflation has even been referred to as the sneakiest of all taxes, taking from the masses and giving to the insider class, those closest to government (those who receive newly-​created money first).

Biden calls “shrinkflation” a “rip-​off” and insists that “the American public is tired of being played as suckers.”

Well, that will prove true only if the American public rejects those politicians who push the policies that led to the inflation — politicians like those in the 116th and 117th Congresses, Donald Trump, and Joe Biden himself.

This is Common Sense. I’m Paul Jacob. 

PDF for printing

Illustration created with PicFinder and Firefly

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
deficits and debt national politics & policies political economy

The Economy Is Great-ish

Joe Biden, economy, inflation, Bidenomics

“We have the highest share of working-​age Americans in the workforce in 20 years,” Biden recently told reporters. “It’s no accident. It’s Bidenomics.”

Bidenomics being that old standby, tax-and-spend-omics.

So why do so many Americans think the economy is getting worse? Why do 84 percent say that their costs have gone up?

Well, says President Biden, the media mislead them. “You all are not the happiest people in the world [in] what you report,” is his view. “You get more legs when you’re reporting something that’s negative.”

The media do often mislead us; the negative news bias is real.

But I don’t think that our left-​leaning, in-​the-​tank-​for-​Biden media can be blamed for the impression so many of us have that it’s harder to make ends meet.

Biden isn’t the only one professing puzzlement. Breitbart Business Digest observes that a “small army of establishment media types and economists” are intent on “unraveling what they take to be the great mysteries of our time.” As described by a recent Brookings Institution paper, this mystery is the “disconnect between consumer sentiment and the state of the macroeconomy.”

As BBD points out, the Brookings researchers simply start by assuming that everybody is wrong, then try to figure out why.

“A simpler explanation would be that the economy is falling short of the public’s expectations” because of things like high inflation, higher interest rates, and greater difficulty paying for groceries, Christmas presents, vacations. And rent, and medical bills, and tuition.

Saying it’s all in our heads won’t make tough times go away.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with PicFinder and Firefly

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
general freedom international affairs national politics & policies too much government

To End the Great Declension

Argentina, Javier Milei, money, inflation, government

“Today begins a new era in Argentina,” said Javier Milei in his inaugural address as the new president of Argentina. “Today we end a long and sad history of decadence and decline and begin the road to the reconstruction of our country.”

President Milei has focused on a problem — the decadence of mass poverty — and identified it with a basic view of government: interventionism in markets, central control and bureaucratic proliferation. These, once established, start a cycle that must end in decay, decline. “The outgoing government has left us with hyperinflation, and it is our top priority to make every effort to avoid a catastrophe that would push poverty above 90 percent and indigence above 50 percent,” he explained.

Milei is not hesitant; gradualism’s not his bag, for the country does not “have margin for sterile discussions. Our country demands action and immediate action.”

At some point, the argument runs, you have to boldly cut government. Not just cut the rate of government growth, which is about all American Republicans have achieved — often allowing others to take the credit, as with Bill “The Era of Big Government Is Over” Clinton.

Milei’s first act as president was an executive order reducing the number of government ministries from 21 to nine. If this move actually succeeds in paring down the size of Argentina’s state apparatus and workforce, it will be something of a miracle.

In a country that needs miracles. 

Here in these United States, we may not have hyperinflation, as such, but we do face a crisis. The deficits are persistent, and majorities in both parties seem utterly unconcerned about the $34 trillion debt, rushing at us fast. Costing more to service than we spend on defense.

Only Vivek Ramaswamy has pushed specific ways to cut government.

But, unlike Milei in South America, here in North America Vivek’s just not that popular.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with PicFinder and Fireflly

See all recent commentary
(simplified and organized)
See recent popular posts

Categories
deficits and debt folly national politics & policies

Relief Spelled S‑U-​B-​S-​I-​D‑Y

Joe Biden, emergency, inflation, student loans

In a bid to bail out the sinking ship of his party, President Joe Biden has decided he can go ahead and bail out Americans who are having trouble paying off their student loans.

Yesterday he announced that (quoting The Epoch Times) “his administration will spend hundreds of billions of dollars to pay off $10,000 in federal student loan debt for some borrowers,” with the Education Department giving the specifics: “individuals earning less than $125,000 a year or families earning less than $250,000 will be eligible for up to $10,000 in debt cancellation.” Pell Grant recipients in the same situation will be eligible for relief of up to twice as much.

The politic nature of the move is so obvious that … it isn’t getting enough attention from critics. 

Most of those alarmed at the move concentrate on the unfairness: rewarding those who have not met their obligations and thereby penalizing those who have. Defenders of student debt relief make the usual arguments about the need to help the under-​privileged — by giving them more privilege (if anything’s a privilege it is to be able to take out a loan and then not pay it back).

You may be wondering how a president can authorize spending billions of dollars. Isn’t that Congress’s job? Well, the administration has found a semi-​plausible excuse — from Congress: a 2003 higher education law that allows the Education Department to provide relief in response to a national emergency. 

And what is the emergency?

Pick one. Inflation, for example.

Which is spurred by overspending.

Which an extra $250 billion will merely increase.

You gotta wonder: isn’t it college graduates who cook up this stuff?

It’s ‘We the People’ who deserve not relief but a full refund.

This is Common Sense. I’m Paul Jacob.

PDF for printing

See all recent commentary
(simplified and organized)
See recent popular posts