Top officials at the White House and Fed have maintained that unsustainably high prices won’t become a permanent feature of the economy... But over the past few months, they’ve been forced to back away from their initial message that inflation is temporary, or “transitory”.... The Biden administration has suffered low approval ratings and political attacks from Republicans, who blame Democrats’ stimulus measures for overheating the economy this year. Inflation has also emerged as a top concern for voters ahead of the 2022 midterms, especially because the cost of food or gas is often a test for how people perceive the economy....
This is a such an obvious disaster that WaPo can't find a way to help Biden or blame Republicans. There's an ineffectual slap at Republicans — for blaming Democrats. But you can't blame Republicans for blaming Democrats. The Democrats are in charge.
ADDED: Here's the shocking chart:
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82 comments:
If you use the same metrics we were using in the 70's Biden's inflation is worse than Carters.
To be fair it was Nixon's inflation as much as it was Carter's.
But I am setting up my Daedalus Wallet now. I will be setting up several crypto wallets.
The dollar is going to zero. It isn't like the Republican party or even any Republican politicians have shown any restraint.
This is a fundamental issue with democracy in general.
The question isn't whether or not inflation happens.
The question is whose income share goes up.
Under Trump the working and middle class saw the first gains in decades and had growth that exceeded inflation.
Under Biden the .0001% is the only group to see their income grow.
This is by design and happens because democrat voters are so stupid.
"Never underestimate Joe's ability to f*ck things up"
Barrack Obama
"especially because the cost of food or gas is often a test for how people perceive the economy...."
For most people, the cost of food and gas is a test for the cost of food and gas.
“ Inflation has also emerged as a top concern for voters ahead of the 2022 midterms, especially because the cost of food or gas is often a test for how people perceive the economy....”
That borders on the hilarious. Inflation turns out to color the public’s perception of the economy, because people realize that the things they have to devote a huge proportion of their money to are costing way more than before. Who’d‘ve thunk?
'There's an ineffectual slap at Republicans — for blaming Democrats.'
Republicans 'pounce.'
: )
Heinlein’s bad luck is upon us.
Top officials at the White House and Fed have maintained that unsustainably high prices won’t become a permanent feature of the economy
By the definition of "unsustainably", although sustainably high prices may become a permanent feature.
If the “moderate” dems (Manchin, Sinema, etc.) are successful at killing the out of control Federal spending, they should be candidates for “Person(s) of the Year”
This whole mess (everything, not just inflation) really started with the election of Obama
The Chinese communist LAB virus - leaked... "leaked" in order to remove Orange Man Bad and his successful and highly effective pro-growth and pro-North-American policies - Individuals were thriving. WE cannot have that. No room for corrupt leftist Soviet gifting and their goal to destroy the middle class. Communists came to the recuse for the Democrats. Bid corporate Tech buttressed with their censorship and their no ID required ballot boxes.
What perfect timing. So what the world had to come to its knees? Worth it for the BIG GOAL. Anything for the corrupt connection between DC insiders and Chinese Communists.
The government gave away billions if not trillions to keep the lock-down going. How do you build back better when the deficit is already reached the farthest galaxy? Certainly, some of that on the edges was necessary by the design of a dangerous and deadly virus. Now the left want to "Build back better" with massive entitlement programs including bogus green insider Solyndra grift and more free stuff for any and all grievances.. all while our border is inundated with people who were invited here by Biden and his handlers. Laws be damned. How many illegal entrants have been flown to the interior? No need to worry - soon they will vote.
No time to catch up with demand. everyone quit in disgust or because it's easier to get a government check, than venture out into the scary world of virus.
Welcome to, THE BIDEN BOOM!!!
who wants to be a millionaire? SCREW THAT! Jo Biden's gonna make us All BILLIONIARES!!
As a retiree my perception is that the climb is greater than 6.8% in food, gasoline, and home heating. Fortunately I don’t need to fill my gas tank as often since I don’t commute anymore. But the wife and I do still eat, and it’s cold outside.
What makes this so hard for the likes of the Post to spin is that these increases are the deliberate, or at any rate foreseeable, consequences of Biden administration policies. Appeasing Greta Thunberg is more important to them than old people on fixed incomes starving and freezing.
I missed my first chance, back in the early 80s, to buy 13% 30-year bonds. Looks like I'm going to get a second chance.
Thanks, Brandon!
Who could possibly have foreseen that spending trillions of dollars when there was no manufacturing capacity to absorb the money would have raised the price of those few goods that were available?
This is most unexpected and counter to all economic theory that The Party acknowledges as valid!
It's not just the stimulus; it's the damage (deliberately) done to domestic energy production.
protip: Go LONG, on Wheelbarrows
Who could have predicted that an economic imbecile would crater our economy so quickly and thoroughly?
Dimmies mince and flounce and Republicans pounce…
This is a such an obvious disaster that WaPo can't find a way to help Biden or blame Republicans.
Sure they can. "Rethuglicans suck, you racist!"
Clearly, the cause is Trump's proven Russian collusion. And those terrorist parents at school board meetings. And racist cops. And anti-vaxers. And And Fox news. And climate change. Don't forget climate change.
This is a such an obvious disaster that WaPo can't find a way to help Biden or blame Republicans. There's an ineffectual slap at Republicans — for blaming Democrats. But you can't blame Republicans for blaming Democrats. The Democrats are in charge.
So how long will it be before Ann votes for a Democrat again? 3 years? 7 years?
Most Americans have this figured out. Democrats will not win an election without "mail-in ballots" for a generation.
Paper Ballots and purple thumbs and voter ID and Democrats lose California. Given what is happening to San Francisco they would probably lose that city too.
New York City had to allow illegals and non citizens to vote to maintain democrat power in that city.
Hardly shocking. For two years, the federal government has been pushing out money to people in the hopes of mitigating COVID damage. At the same time, COVID and COVID restrictions have caused less to be produced. "Too much money chasing too few goods" is the classic economics formula for causing inflation.
John Cochrane asserts uncompromisingly: "Inflation is entirely about "demand," not "supply." Fixing the ports, the chips, the pipelines, the labor disincentives, the regulations, are all great and good, and the key to economic growth. But they will not on their own do much to slow inflation. We are having inflation because the government printed up a few trillion dollars, and borrowed a few trillion more, and wrote people checks. People are spending the checks."
So the elites monkey wrenched the economy to further their goals, which were to get rid of Trump and move government further from democracy.
God help us, I think that they believed that you can stop and start the economy like stopping and starting a car.
Socialists/Communists don't believe in, nor understand, economics.
What do you get when you shower people with "stimulus" money, while keeping them from working?
Too much money chasing too few goods, which equals inflation. Econ 101.
Pay people more to stay home than they can make working and wages go up as the job gentrifies. Wages going up is itself inflation - immediately shows up in prices.
"Top officials at the White House and Fed have maintained that unsustainably high prices won’t become a permanent feature of the economy…"
They're claiming that prices will come back down?!?! That won't happen. The best we can hope for is that inflation cools and prices stay at their new, higher, level.
Well, they could come back down. That would be called a depression.
To the Regime media Biden and Democrats never do anything wrong. They just get accused by Republicans of doing things wrong. Republicans pounce. Inflation of out of control. I'm now paying almost $5 for gas. I saw steak for $20/lbs!
BTW, I'm really getting tired of endlessly writing year after year about how the Regime media are liars, and are unpaid propagandists for the DNC. But evidently, large numbers of Americans will believe them no matter what. They will vote Democrat or for some worthless RINO No matter what. They will NOT get upset no matter what.
I wonder how many of these dumbshits understand the nexus between Biden and D's and RINO's being in charge and the inflation and the decline of their standard of living?
When Republicans screw up, that's the story. When Democrats screw up, the story is the Republican reaction. "Pounce !"
Except that now the Propagandists in the media have had meetings with the White House on how to lie to us more, and make it look like this is the best Presidency we ever had. Case in point from ex- Republican, turned pussy hat wearing dweeb...You can believe their lies or you can believe your own eyes when you go to the store, the gas station, any service industry where they can't find help ect...ect...ect...
Joe Scarborough
@JoeNBC
“Based on the data, President Biden and the Democratic Congress are set to preside over the strongest two-year performance on growth, jobs, and income in decades.”
The entire leftist press huddled to come up with a way to praise democrats and old Joe. Best economy ever, they say in unison. After the collective huddle.
Joe Scarborough is a laughable sell-out fraud.
Predicted. Now come to fruition. Any surprised reactions from economists are faux. Those blessed with an ability to ignore politics and news might be shocked by how fast inflation is inflating but no one else is. Well maybe Brandon is.
Dr. Birx bears responsibility for being the one who pushed for shutdowns and after Trump bought into “two weeks to flatten the curve” he worked tirelessly to try and get America back to normal. Joe ran on shutting down the virus but perpetuated job-killing policies that most of us recognized as foolish and unnecessary and leading straight to this. I underestimated the extreme whiplash that this mix of policies would result in. I expected bad. This is disastrous. If any more bubbles pop progressives will get the two Americas they really desire.
This is not all Biden's fault. As Milton Friedman famously said, “Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” October 2021 M2 money supply measure is 40 percent higher than it was in October 2019. That is banana republic territory, and the blame belongs to the Federal Reserve.
The Fed is repeating the mistakes of the 1970s. The Fed can control aggregate demand, but it can't really affect aggregate supply. When the economy encountered adverse supply shocks (sharply increased oil prices) in the 1970s, the Fed tried to offset the resulting unemployment by stimulating aggregate demand. The result was exactly what you should expect: lots of inflation and a very temporary increase in employment. We're seeing the same thing now.
The correct course for the Fed is to try to stabilize nominal GDP growth (real gdp growth plus the inflation rate). Adverse supply shocks like Covid then result in a small, temporary increase in inflation and higher unemployment. The Japanese and German economies of five decades ago are good examples.
You can't fix an aggregate supply problem via demand management. You have to directly address the supply problems, and this is where the Biden administration is screwing up royally. Cancelling pipelines, increasing regulations, and decreasing labor supply via vaccine mandates are all making supply problems worse, not better. And of course Biden is reappointing the Fed chair who is responsible for the inflation.
Pensioners will be hardest hit, as much of what keeps CPI measure down, such as falling prices for TVs, electronics, etc are not typical retired folks purchases. And I/m not sure about US, but in UK pensioners, retired, senior citizens have much the highest turn out rate in elections.
In January, simple split cedar logs used as fence rails are going up in cost by $1 per linear foot. Again. That is about 7%. So the cost of the simplest construction material I use will have increased by about 25% compared to last year. Other construction materials from shingles to siding to concrete have increased more.
Expect record high prices for all new rental apartments and single family houses in 2022, and simultaneous increases in prices for all existing rental and house prices.
The housing market will eventually be attracting a more selective clientele, just like that band Spinal Tap.
I remember this stuff from the '70s and early '80s. I remember buying 140K for a house in a neighborhood where my slightly older neighbors had paid 12 - 14K and had mortgages that amounted to coffee and donuts money for me. I also remembered that it was really hard to collect that down payment as the size of it seemed to outpace our ability to save. But we just limited our expenses and saved and saved, and we bought the house, and four years later is was worth 95K and we sold it short and declared bankruptcy.
That's just a story about inflation for young people who might not be aware of how inflation and price swings affect real people. On the other hand, the people who got saddled with onerous student loans by people who should have known better will catch a real break from this, *after* it all settles out, and the rubble stops bouncing.
Based on the data, President Biden and the Democratic Congress are set to preside over the strongest two-year performance on growth, jobs, and income in decades.”
That's the same way they do global warming, the 60s and 70s were the coldest decades of the century, and that's where we measure the trends from. The stuff before that goes only back to the "Little Ice Age."
"Never underestimate Joe's ability to f*ck things up"
I try to properly estimate it, but it's so hard to keep up!
:) I did that!
Milton Friedman is a lot smarter than Joe Biden and any of the idiots that voted for him.
This inflation is a direct result of the government-mandated shutdowns and the government covid relief payments starting in the Spring of 2020. If those relief payments had been limited to those two (three?) relief bills, then the explosion in the money supply (as high as 27% y/y), then inflation would have been only temporary. Instead, the Congress kept spending as the Democrat states kept businesses locked down.
Inflation is a money supply problem. Last year, the money supply growth spiked at 27%. Put free money in people's pockets, and the increase in demand will drive prices up. It doesn't help that government is causing supply shortages due to vaxx firings, trucking shortages (independent contractor and diesel engine restrictions) and port backups.
ADDED: Here's the shocking chart:
When Biden's inflation goes above 8%, the BLS will have to lengthen the chart back into the 70's to make it appear not quite so bad.
'John Cochrane asserts uncompromisingly: "Inflation is entirely about "demand," not "supply." Fixing the ports, the chips, the pipelines, the labor disincentives, the regulations, are all great and good, and the key to economic growth. But they will not on their own do much to slow inflation. We are having inflation because the government printed up a few trillion dollars, and borrowed a few trillion more, and wrote people checks. People are spending the checks."'
...more Cochrane:
Everything looks normal until February 2021. From that point to October 2021 the CPI rose 5.15% (263.161 to 276.724), a 7.8% annual rate.
What happened, at least through the lens of the simple fiscal theory models in this book? Well, from March 2020 through early 2021, the U.S. government -- Treasury and Fed acting together -- created about $3 trillion new money and sent people checks. The Treasury borrowed an additional $2 trillion, and sent people more checks. M2, including checking and savings accounts, went up $5.5 trillion dollars. $5 trillion is a nearly 30% increase in the $17 trillion of debt outstanding at the beginning of the Covid recession...
From the traditional perspective, the Fed's monetary policy in 2020 and 2021 is a significant institutional failure. The Fed was caught completely by surprise. The Fed claims that supply disruptions caused inflation. But the Fed’s main job in the conventional reading is to calibrate how much ``supply'' the economy can offer, and then adjust demand to that level and no more. A central bank offering supply as an excuse for inflation is like the Army offering that the enemy chose to invade as excuse for losing a war. If the Fed is surprised that containers can't get through ports, why does it not have any of its thousands of economists calculating how many containers can get through ports? The answer is that the Fed's ``supply'' modeling is pretty simplistic, relying mainly on the non-inflationary unemployment rate (NAIRU) concept. More deeply, the Fed worked with Treasury on the stimulus in the first place, misdiagnosing the economy's fall as simple lack of ``demand,'' not disruption due to a virus and lockdowns.
WAY TO GO BIDEN!!!
Midterms are almost here.. VOTE EVERY DEMOCRAT OUT OF OFFICE.
They own it. They need to be shown what happens when you mess up the economy.
Any surprised reactions from economists are faux.
You forgot the quote marks around "economists".
So how long will it be before Ann votes for a Democrat again? 3 years? 7 years?
i'd say, in about 10 months
Bullshit...I don't believe it.
CNN and MSNBC are telling me that inflation is a great thing.
It should go higher.
"I missed my first chance, back in the early 80s, to buy 13% 30-year bonds. Looks like I'm going to get a second chance."
Two things:
the bond market continues to see no growth- the 10Y and 30Y US treasury rates dropped this morning, and are lower than they were last March;
30Y bonds are callable, so even if you get the chance to buy such high yielding bonds, either inflation and rates stay high meaning your real yield is low, or the bonds get called on very generous terms for the government if rates and inflation fall signicantly.
It's OK. Everybody calm down. Paul Krugman has assured us that this is not happening.
There is almost nothing our 'experts' have gotten right since they predicted the Hindenburg would be the next great mode of luxury travel.
The regime lies and refuses to answer pointed questions.
The statistics cited by Deese were jaw dropping in the level of spin used to create them. First, the economic council cite their own national employment forecasts for economic recovery (under their ‘American Rescue Plan’), then celebrate they are ahead of schedule for a timeline they created.
When asked about inflation, Deese then proclaims he is not going to get into the business of economic predictions; which the media just accept without reminding him that his economic policies are entirely based on his own predictions… which he just cited in the prior moment of self-congratulation. Additionally, according to Deese (without any citation to demonstrate validity for his claim), the NEC Chairman says “real household income” is at its pre-pandemic level; which seems highly unlikely given the scale of inflation.
Lies, lies and more lies.
Anecdotal data point: sis has a big family and a correspondingly big water heater. The water heater was getting old, and she received a quote in the spring for a replacement at around $1,200. Her plumber said she didn't need a replacement right away, so she decided to wait for next spring. Unfortunately, the old heater started leaking a week ago, so she asked for a new quote. Same equipment, same company, same installer, but now $1,900 and change.
Way back in spring/summer 2020 I predicted the covid relief spending would cause inflation. I hate to say I told you so, but I told you so.
I lost all faith in libertarians and free-traders during the Trump years. (Paul Ryan can go to hell.) I realized we were at a populist moment and I needed to embrace it and it's unlikely hero, Trump. Now that Democrats are back in control many of the purist arguments of the Milton Friedman crowd are resonating strongly. Democrats always ruin economies ... always. It's what they do. But I'm not ready to re-enlist in the libertarian army. Those assholes were utterly exposed as fakes during the Trump term.
The populist moment has not crested yet. It will. And then a more ideological approach to things will become important again. But those who can't read the times are condemned to watch the times take them to hell in a Democrat bus flying over the edge of the Grand Canyon.
And that's where we are right now.
The least admirable aspect of the DJT Presidency was passing out "stimulus checks;" an unforced failure in the duty of the feral gummit to mint sound currency. Other than that, there is much to be admired and applauded about his performance in the job.
Devaluation of the currency for short term political gain has a long and ugly history - mostly at the behest of Democrats - going back through "Cash for Clunkers," bank bailouts, auto company bailouts, Great Society, War on Poverty. There is constant pressure from the progressive side to augment the destruction - "free" this and that, college loan forgiveness, housing is as "basic human right," guaranteed monthly income fer chrissake!
I much admire DJT for courage and honesty to call out the media as the lying assholes they are. Some progress there.
The time to care is not now. It was back in Spring 2020. Those of us who loathe finance saw no problem vilifying those of us disturbed about locking down the world to avoid a virus with over a 99 percent survivability rate we knew then would be with us forever. Now the consequences of government intervention to make up for stopping everything have arrived.
So far we're okay health and economic wise. I'm depressed and concerned for everyone who is not. For you Spring 2020 sanctimonious shits: Suck it, losers...
Can of Cheese: "Joe Scarborough is a laughable sell-out fraud."
Joe Scarborough is the far left democratical "lifelong republican"/"true conservative" he always was.
There's alot of that going around these days.
Inflation is always and ever a monetary event. It is not based on either supply or demand but on the amount of fiat currency forced into the market. More currency = less valuable currency = more tokens needed to buy things. Those things appear to be more expensive but actually the value of the currency continues to drop, thus requiring more units to purchase. This clearest in relation to things whose value does not change, most notably gold and real estate.
"This is a such an obvious disaster"
It was a disaster months ago, met by denial. Biden, the Dems, the Fed--all told us not to believe our lying eyes. Which of course makes the disaster worse.
Still glad you abstained, Althouse?
"But you can't blame Republicans for blaming Democrats. The Democrats are in charge."
Yet this is what happens in California. Republicans are blamed for blaming and for all the ills, which somehow keeps Democrats with all the power. Propaganda works.
Collateral damage from single/central solutions, poorly conceived mandates and administration, excessive smoothing functions, progressive taxation schemes, and fallout from gaming labor and environmental arbitrage.
When thinking about inflation, it is important to remember that every dollar spent by one person is a dollar of income to another. When prices go up, people spend more to buy things, but other people receive more when they sell things. The increase in spending is EXACTLY equal to the increae in income. So, to a first approximation, the harm from inflation is equal to the benefit from inflation.
Yes, there can be secondary effects, but it is important to remember that, to a first approximation, inflation is neutral.
Most commentary, is therefore, kind of silly. (Achilles's comment above is the only one I see that gets this.)
"US labor market productivity fell dramatically in the third quarter of the year, dropping to its lowest level in 40 years."
YIKES!
But heeding the white house call for the media to put a positive spin on the bad economic news, CNN steps up to the plate: "That sounds terrible. But there are plenty of reasons it might not be a bad sign for the nation's economic outlook."
Yeah, no CNN. It doesn't sound terrible, it IS terrible.
Sure glad this administration isn't on my conscience.
Biden famously asked “Who died and left Milton Friedman in charge?”
Do you think he has his answer?
It's a 9-month lagging indicator representative of the conditions at the end of the Trump administration. Trump also set up the roaring economic boom and thriving job market. However, the Buck Stops on a thousand Biden administration desks where they all fumble fuck up deflective reasons while talking credit for the positive news.
I'm fairly sure the official metric under-estimates actual cost increases. In particular, the electrical grid now costs more, but the "cost" is buried in accounting tricks. The Texas electric rate payers have a low rate in $/kWh but there's now an added "surcharge" to make up for the winter failures last February -- due at very least in part to frozen "sustainable" windmills and "clean" natural gas generators shutting down. The costs of stringing new power lines to new generators of any tech (solar, wind, gas, ANYTHING new) to replace the still otherwise viable lines to otherwise functioning coal generators is in the cost mix somewhere. And of course the advertising overhead to persuade us all that electricity -- in particular for electric cars -- is a miraculous free unlimited resource is costing a bundle.
The costs of running a political campaign are much higher than in the Carter era. The costs to blanket the "airwaves" for any product are now higher given the excess of cable channels available. The cost of ads is also higher due to competition between commercial adverstising for real products versus ads for ObamaCare, medicare, etc. Cost to families to maintain their own inventory of safety stock of toiletpaper, etc, in face of supply chain uncertainty is up.
Lots of costs are rising in ways that the federal "market basket" fails to capture.
Last month the new management at my apartment complex told me my rent was going up 25%! Not terribly surprising I suppose. From what I hear we're being invaded by blue state buyers. Houses are sold within 24 hours at premium prices. Blue collar neighborhoods have started looking more upscale with lots of renovations.
Inflation is going to hit local and state governments hard if they're stuck with union contracts requiring COLA-adjusted retirement benefits. Unless Uncle print-more-money bails them out.
Watching Fox Business News with story straight from the '70s. It is an interview with a butcher with tips on saving money on meat. This is almost exactly like I watched on the local news in the Carter years.
Seems like only yesterday that The Poor Man's *** ***** gadfly and Howard were arguing:
1) inflation was not increasing
2) inflation was increasing but not by much at all
3) Inflation was increasing but only a bit more than expected
4) Inflation is increasing more than expected but it will only be for the short term
5) Inflation is increasing more than expected but it will only be until 2022
6) Inflation is increasing more than expected, for longer than expected, but would not last until 2023
7) Inflation is increasing much more than expected, will last well into 2023, and and and uh and uh huh......
....Orange Man Bad! Insurrection!
"Yes, there can be secondary effects, but it is important to remember that, to a first approximation, inflation is neutral."
The problem with this is the first order approximation effect is meaningless. The second order effects are the ones that actually matter. Debtors and people with physical assets love inflation, everyone else not so much.
A recession will put the stake through the heart of inflation today, and that is what the bond market is forecasting.
Look at that chart and the top peaks in inflation, now look at those shaded areas that coincide with all of them. Do I really need to tell you what the shaded areas signify?
Fortunately, we have the omicron variant.
‘So, to a first approximation, the harm from inflation is equal to the benefit from inflation.’
Is that you, Brandon?
"It's a 9-month lagging indicator representative of the conditions at the end of the Trump administration. "
Spending extra trillions has no effect on inflation... Whodathunkit. Apparently it follows hard and fast rules no matter what the government does or does not do.
#inflationintehnation… #joethebummer
"[Jen Psaki] criticized House Republicans for voting against the legislation by arguing that the provisions within Build Back Better will help lower the rising costs of products.
“You saw every single Republican in the House vote against Build Back Better. What were they voting against? Yes, they were voting against the president’s agenda, they were also voting against lowering costs,” Psaki said. “They were voting against lowering costs for childcare, lowering costs for eldercare, lowering costs for healthcare.”"
If this wasn't so serious it would be funny.
Blogger Yancey Ward said..."A recession will put the stake through the heart of inflation today, and that is what the bond market is forecasting."
I've been wondering why yields haven't been going up.
So how long will it be before Ann votes for a Democrat again? 3 years? 7 years?
@Achilles, dunno. When is the next election in Madison?
Hey, Fundamental Transformation can get lumpy!
Look at US v European inflation:
https://mobile.twitter.com/jasonfurman/status/1469317715294932992
Is it all from not passing the "Build America Back Better" bill?
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