Tag: inflation

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ideological culture national politics & policies social media

Receding From the Facts

fact check, media, truth, lie

Thesis: we’re entering recession, but the Biden administration disagrees.

For political reasons.

May we discuss?

Sure, here in Common Sense. (We’ve yet to censor or flag ourselves.) Big Tech social media is a different story.

Loath to preside over an officially designated recession, the Biden administration suggests that when you look at all the data in just the right light, it’s “unlikely that the decline in GDP in the first quarter of this year — even if followed by another GDP decline in the second quarter — indicates a recession.”

Others disagree, saying the familiar definition cannot be so summarily dispatched. On Instagram, poster Graham Allen cheekily asked Siri how we know it’s a recession. Her reply: “two consecutive quarters of negative growth.”

Not a sacrosanct indicator, but standard.

Enter the Guardians of Discourse. 

Meta (which owns Facebook and Instagram) has flagged Allen’s post as “false information” and in some cases prevented viewers from seeing it.

The “independent” fact checker on duty was Politifact, which warned Web surfers it just ain’t so that “the White House is now trying to protect Joe Biden by changing the definition of the word recession.”

This is where we’re at. Discussion of political motives at the White House has become so hazardous that the People of the Fact Check must rush to repudiate any intimation that any assiduous politics is going on. It’s all just assiduous data comparison.

Well, reality check: “fact checks” can be biased too.

This is Common Sense. I’m Paul Jacob.

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national politics & policies too much government

Biden’s Peculiar Odor

Biden, inflation, odor, order

William F. Buckley used to say that there is always a presumptive case for order.

Philosopher Joel Feinberg argued that there’s always a presumptive case for freedom.*

This notion of a strong case for or against something prior to specific data can keep philosophers and economists and folks like you and me awake at night.

Here, I’m just going to bring it down to the politics.

Of inflation.

Why are prices — especially fuel prices — rising so?

The Biden Administration has been trying to argue that it’s caused by the war in Ukraine, and Americans’ need to sacrifice to defend that beleaguered country. 

But, as with his talk of “food shortages,” the war is almost certainly an exacerbating, not the prime, factor. Both fuel price spikes and bare shelves demonstrated an alarming trend before Putin invaded Ukraine. 

The cause seems obvious. Do we really need careful studies to show that both were caused by (a) COVID lockdowns and (b) a blizzard of lockdown bailout checks during Trump’s term in office and eagerly pushed also by the current president?

And Biden’s current kick, of demanding that gas stations (!) freeze or reduce prices to “match the cost of production,” has all the odor of cranky, old-fashioned soapbox socialism.

There is a presumptive case that inflation is caused by monetary policy, just as shortages are usually caused by regulations. Trump and Biden and Congress all contributed to over-spending, financialization, and regulatory hits.** But the stink of the growing mess must also affix especially to Biden. After all, one of his campaign promises was to cut production of oil on all government lands and offshore.

This is Common Sense. I’m Paul Jacob.

 * Joel Feinberg, Social Philosophy (1972), pp. 20-22. Where Buckley discussed his presumptive case is your guess or mine. Probably a column back in the 1970s or ’80s.

 ** A few weeks ago an interesting exchange occurred in this website’s comments section, between two friends of this program.

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h/t crAIyon

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free trade & free markets national politics & policies political economy

Big Oil, Big Profits — Big Deal?

Joe Biden, oil, inflation

When President Joe Biden accused oil companies of excessive profiteering, and those profits as a cause of inflation, reactions were . . . mixed.

Democrats love that kind of talk. Ronald Reagan, back in his Democrat days, pitched precisely that sort of rhetoric when he campaigned for Truman’s re-election.

Republicans, along with most other Americans, are skeptical. Or just plain incredulous.

Meanwhile, what did Big Oil say?

Chevron’s CEO, Mike Wirth, took special care to complain of the president’s rhetoric, characterizing the administration as having “largely sought to criticize, and at times vilify, our industry.”

Perhaps Biden’s worst vilification was that Exxon had “made more money than God” — as if spending more money than God were his job and that he resented any money he couldn’t spend. 

EXXON responded by noting that the multinational had continued investing in infrastructure even during the pandemic lockdowns when the company “lost more than $20 billion and had to borrow more than $30 billion to maintain investment to increase capacity to be ready for post-pandemic demand.”

In a helpful mode, the company offered that “government can promote investment through clear and consistent policy that supports U.S. resource development, such as regular and predictable lease sales, as well as streamlined regulatory approval and support for infrastructure such as pipelines.”

Biden, who ran on decreasing oil production by regulatory crackdown, received a square hit.

Nonetheless, the Democrats double-down on their worn-out “windfall profits” alarmism. 

After a huge hit to consumption during the lockdowns, the profits are there not as recompense for Big Oil’s regrettable big losses, but as incentives to get out of the Great Suppression. 

We should want profits to entice more investment.

Could it be that Biden wants neither?

This is Common Sense. I’m Paul Jacob.

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folly national politics & policies

It’s a Gas, Gas, Gas

Joe Biden, gas, inflation

“Senior White House aides are exploring new ideas to respond to high gas prices,” informs The Washington Post, “desperate to show that the administration is trying to address voter frustration about rising costs at the pump.”

Not “desperate” to lower gas prices, mind you — which have hit $5 a gallon, a double-digit increase from last month — but to “address” the resulting “voter frustration” from high prices. 

After all, there’s an election in November. Suddenly, this crisis could affect important people in Washington!

“Biden officials are taking a second look at whether the federal government could send rebate cards out to millions of American drivers to help them pay at gas stations,” The Post reports. This generous brainstorm was previously rejected because “shortages in the U.S. chip industry would make it hard to produce enough rebate cards.” 

America 2022 isn’t even technologically capable of giving money away. 

Administration experts also worried “the idea could backfire by further pushing up prices by adding to consumer demand.” Oh, didn’t Congress repeal the laws of supply and demand?

Someone “familiar with internal administration discussions” offered that the administration was looking at “telling governors to lower or waive their gas taxes.”

Grover Norquist smiles.

“Other proposals floated by policy experts include suspending the Jones Act,” notes The Post story, “which would reduce shipping costs and make it cheaper to get gasoline from the Gulf Coast to the Eastern Seaboard.”

That act should have been repealed years ago. 

“They’re fighting about narrative rather than fighting about substance,” offered an unnamed outside economic adviser, “because realistically, what are they going to do?”

They could open up energy markets, of course — approve gas pipelines rather than blocking them, perhaps. 

Could? Should? Yes. Will? 

Not Biden!

This is Common Sense. I’m Paul Jacob.

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free trade & free markets too much government

Do More Than Baby Steps

baby formula, inflation, economics

Major disruptions such as pandemic policy in China and the Russian invasion of Ukraine obviously crimp trade and supply chains. But given such impacts, should governments here in the United States be making things better or making things worse?

Oil is one example of a good that would be more abundant and cheaper had the government left it alone — stopped blocking domestic production and the flow of oil from Canada.

Now parents are having trouble getting baby food.

A proximate cause of the shortage is the closure of a single major factory producing baby formula. But Kevin Ketels, a professor who studies the global supply chain, argues that restrictions on production had set things up so that a blow like this would be crippling.

For one thing, only a few companies, Abbott, Reckitt, and Nestlé, are allowed to participate in a government program to provide baby formula to low-income families. This is not a minor program. The federal government provides substantial grants to the states to fund it.

More importantly, only a few manufacturing facilities are allowed to produce baby formula, and “startups don’t have the volume required to produce in these facilities.”

High tariffs on baby-food imports have also reduced supply.

You would think, then, that the first thing to do would be to remove governmental barriers to production and imports.

And all, not just some.

So why isn’t that what we are hearing about now?

Well, politicians do not gain their power, prestige, and insider trading advantages by leaving well enough alone. Admitting that their stock in trade — regulation and tariffs and the like — is the cause of this problem might suggest to distracted minds that it is the cause of most, if not all, our problems.

This is Common Sense. I’m Paul Jacob.

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Unconscionable Greed!

Bernie Sanders, Elizabeth Warren, price gouging, inflation

It’s easy to blame others for greed. And when prices rise, I suppose I can imagine being so upset that . . . well, if not my mind, Bernie Sanders’ mind . . . would become unhinged:

“Greed. Greed. Greed. While Americans are struggling at the pump,” the senator tweeted on Friday the 13th, “in the first three months of this year, oil and gas companies made over $41 billion in profits, more than double their profits from last year. The problem is not inflation. The problem is corporate greed.”

That’s Bernie Sanders for you. It’s not government profligacy or Federal Reserve monetary policy or the Biden Administration’s anti-fossil fuels agenda . . . or supply-line problems, persisting COVID-lockdown effects, or anything else.

Just greed.

But is greed somehow cyclical? Why were greedy corporations providing cheap gas a year ago and then able to raise it only under Democrats’ rule?

Alas, Bernie isn’t the only low-brow demagogue in the Senate. There’s Senator Elizabeth Warren pushing a new “price gouging” bill.

So, just as Bernie never answers “why is greed so successful at gouging now?,” how does Liz answer the burning question “how can we objectively define ‘price-gouging’?”

As journalist Catherine Rampell observes on Twitter, the senator’s definition in the bill is less than enlightening: “price-gouging” is “just pricing that is ‘unconscionably excessive.’”

Now that, Senator Warren, is unconscionably vague.

And incidentally, aren’t both senators on the record as demanding higher gas prices to usher in “green energy” to “save the planet”? This all seems unconscionably . . . deceptive.

This is Common Sense. I’m Paul Jacob.

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Photo credits: Warren/Bernie/money

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media and media people national politics & policies

Who’s the Stupid S.O.B.?

Joe Biden, SOB, stupid son of a bitch, press conference, Steve Doocy

President Joe Biden called Fox reporter Peter Doocy a “stupid s.o.b.,” sans the abbreviation.

Biden had balked at answering questions about Ukraine, so Mr. Doocy asked him about inflation: “Do you think inflation is a political liability ahead of the mid-terms?”

“That’s a great asset: more inflation,” Biden mumbled into the hot mic. “What a stupid . . .”

Now, had I said that, I would hasten to explain that I was being sardonic. Of course inflation is a liability. Dubbing it a “great asset” was certainly sarcasm. It could be nothing other. Inflation is a horror show.

But the negative characterization of Doocy that immediately followed undermines that Irony Interpretation. Does it sound ironic? And if the insult is earnest, does it not suggest that the preceding declaration about inflation is not only earnest, but in the Contempt Mode that Democrats have been adopting to criticism in recent years?

Of course inflation is great! 

For them.

After all, inflation does help a few at the expense of the many. It helps insiders at the expense of the outsiders. This is ancient wisdom.

Insiders in government gain through inflation, getting to “spend first,” while we on the outside — in society — suffer from decreased purchasing power.

After the event, Biden contacted Doocy. “It’s nothing personal, pal.” 

But the objective issue is whether Biden was being sarcastic about inflation.

While we may argue over who will have the last word on monetary policy, it was Doocy who had the last laugh . . . at himself: “nobody has fact-checked [Biden] yet and said it’s not true.”

But then, fact-checkers ain’t what they used to be.

This is Common Sense. I’m Paul Jacob.

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Accountability folly national politics & policies political economy

Whip Producers Now

inflation, shock

The Biden administration is siccing agencies like the Federal Trade Commission, Department of Agriculture, and the Federal Maritime Commission onto the producers of stuff who have recently dared to raise prices.

Stuff like gas. Higher prices at the pump must be an oil-company conspiracy.

It has nothing to do with (and don’t even think it!) governmental actions that impede production, including shutting down the Keystone oil pipeline on Biden’s first day in office or calling a halt to new oil leases on public lands. Etcetera.

Nothing to do with mammoth expansion of the supply of money and credit to facilitate trillion-dollar government spending sprees.

In case you hadn’t noticed, meat costs more, too. So obviously that must be the fault of malicious meatpackers. Rest assured that beef price inflation is utterly unrelated to pandemic-policy-induced labor shortages and delays.

Or to any recent increase in efficiency-impairing trucking regulations.

Same with sundry supply-chain problems, like the ships and crates piling up at ports. Greater consumer demand, new pandemic-induced screening protocols, union rules that prevent ports from operating 24/7 or improving automation — all irrelevant.

Must be. That’s the script from 1600 Pennsylvania Avenue, anyway.

But if companies can hike prices at will, ignoring whether regulations ease or obstruct production, why doesn’t the meat industry, for example, charge a thousand dollars per pound of flesh?

Well, we know why. 

Demand for a pound of ground beef would slide to zero, or close to it.

If only the government people knew! 

Or would stop pretending they don’t know. 

A consistent recognition of the laws of economics would sure make a great gift — in any season. Instead of bullying and making things worse, government could get out of the way.

This is Common Sense. I’m Paul Jacob.

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deficits and debt folly national politics & policies responsibility

Biden Blames Business

inflation, cash, money, fire

Inflation’s up, and President Joseph Robinette Biden, Jr., thinks he knows why.

Economist Bruce Yandle, famed for his “Bootleggers and Baptists” theory of regulation, reports in Reason that the aging president blamed “the country’s three largest meatpackers” for contributing to July’s CPI rate of 5.4 percent, and the fuel industry for its part in August’s 5.3 percent annualized rate. 

Profiteering!

I’ve always wondered how anyone can get away with this tired old accusation. Businesspeople aim to profit at all times and in every place. Profit is why they go into business. Are they making too much inflation-adjusted profit during an inflationary period but not when inflation is low? Seems unlikely.

But Biden’s looking into it! “There’s lots of evidence that gas prices should be going down,” the prez claimed, “but they haven’t.”

What evidence? Biden presented none. 

After throwing so much money into the economy to “stimulate” it after the big hit commerce has taken from state-perpetrated lockdowns, what could we expect but rising prices? “Inflation is always and everywhere,” a great economist has said, “a monetary phenomenon.”

Bruce Yandle is on that same page. Referring to Mr. Biden’s bizarre blame game, Yandle suggested that maybe — just maybe — Biden “should look inside the halls of the West Wing.”

Specifically at all the spending, like the current “$3.5 trillion spending package.” The puppet masters pulling Biden’s strings must, Yandle asserts, “be aware that calling for more spending to calm inflation is like pouring gasoline on an already smoldering fire.”

The real problem is “too much printing-press money” backing deficit spending.

Blaming excess profits? A distraction.

A big lie.

This is Common Sense. I’m Paul Jacob.

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The Accelerators

tax, spend, inflation, bankruptcy

“We can do $10 trillion,” declared Rep. Alexandria Ocasio-Cortez (D-NY) last week.

“I know that may be an eye-popping figure for some people,” explained the photogenic pop-eyed pol, “but we need to understand that we are in a devastating economic moment, millions of people in the Unites States are unemployed, we have a truly crippled health-care system and a planetary crisis on our hands, and we’re the wealthiest nation in the history of the world.”

In other words, the sky is falling . . . and we still have checks.

The Bronx congresswoman, described as “one of the most influential members” by MSNBC’s Rachel Maddow, trumpeted that tidy sum in response to last week’s “go big” proposal by President Joe Biden to spend a special new $2.2 trillion under the loose label of infrastructure, which AOC argued “is not nearly enough.”

This new two-tril spending bill is “a follow-up to the $1.9 trillion stimulus approved in March.” And just Part 1 of a two-package infrastructure and other stuff Biden plan. 

“The White House is reportedly willing to spend $4 trillion across the two packages,” Business Insider reports, “a sum that would bring recovery spending under his term to nearly $6 trillion.”

Biden’s term has been only 76 days.

A couple trillion here, a couple trillion there and pretty soon you’re talking real money . . . except under Modern Monetary Theory, which Ocasio-Cortez embraces. The idea being: government can print as much money as politicians want to spend. 

While this road to bankruptcy has been paved with the partisan political intentions of big spending politicians of both major parties, right now it is the Democrats hitting the gas.

This is Common Sense. I’m Paul Jacob.

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