If you’ve been to a grocery store recently, you know the story: prices are higher on everything. The Bureau of Labor Statistics tells a similar story with their Consumer Price Index reports. Their latest inflation announcement told a similar story we’ve heard over the last several months: inflation reached new multi-decade highs as consumers face pressure from every angle. The Biden administration has spent a year shouting transitory, and inflation keeps climbing.
The BLS reported for January 2022 that, The all items index rose 7.5 percent for the 12 months ending January, the largest 12-month increase since the period ending February 1982. The all items less food and energy index rose 6.0 percent, the largest 12-month change since the period ending August 1982. The energy index rose 27.0 percent over the last year, and the food index increased 7.0 percent.”
The Wall Street Journal, after digging into the numbers, saw prices rising in practically every category. The WSJ said consumers were facing increased costs on groceries, utilities, gas, healthcare, rent or mortgages from housing, and vehicle prices. You can also find increases in clothing and other consumer goods.
In short, prices are increasing everywhere now. Consumers are taking hits wherever they turn. A separate WSJ investigation estimates that the average American is paying $276 more a month right now, purely because of inflation. Annualized, that adds up to $3,312 purely from inflation.
The average American annual income is around $65,000, which means that inflation is practically devouring one and a half paychecks by itself before factoring in any other things. That’s a real tax on the average person. People feel that. Americans are experiencing wage increases, but nothing employer’s offer will keep up with that.
The Federal Reserve is preparing to attack the inflation problem in March. Americans will have spent more than a year dealing with inflationary pressures by then. At the same time, Congress pumped more money into the economy, and the Biden administration ignored the problem.
In his column for the New York Post, Stephen Moore notes:
Grocery bills are up more than 10% and energy costs are up more than 30%, according to the Labor Department analysis. Don’t expect any relief from the higher sticker prices anytime soon. Grocery store chains are reporting higher costs to get milk, steaks, broccoli, eggs and snacks on the shelves — if they can get the food on the shelves at all. One leading owner of more than 50 major grocery stores on the East Coast predicts that grocery prices could rise another 10% to 20% over the next six months because of supply-chain issues.
And, of course, don’t forget that tensions between Ukraine and Russia could impact oil prices — already high — and send the price of oil over $100 a barrel, sticking consumers with even larger gas and utility bills.
The Federal Reserve raising interest rates is an excellent start to attacking inflation. Still, it can’t be called the be-all, end-all policy to fix everything. Raising rates won’t straighten out supply chains, end shortages from raw materials to employees, or change geopolitical politics between Europe, the United States, Russia, and China.
At some point, the White House has to take some action to fix either a mess they created or handle an event thrust upon them by history. Presidents don’t always get to pick their fights. In Joe Biden’s case, it’s not clear he knows that he needs to be in the ring right now because the average American is getting hammered by everything we’ve mentioned so far.
Not only is Biden unprepared for these events, but he’s also unprepared for picking a Supreme Court nominee. The White House had no candidate ready to go for what everyone believed was an obvious retirement situation with Stephen Breyer. Incompetence reigns.
Is there anyone at the ship’s wheel? The White House continues to claim they monitor situations carefully and closely. Monitoring situations is great, but the time for action on these issues was months ago. We’re in the middle of the consequences of inaction right now, and Americans are taking the brunt.
Matthew Continetti noted in Commentary Magazine that Democrats appear poised to jump right into the 1970s policies of price controls. This kind of policy thinking in the 1970s led to more price problems for consumers. It failed both in the United States and the former Soviet Union. Central planning does not work, but apparently, it deserves another look when you have no plans to do anything else.
There’s one more month of inflation data to come in before the Federal Reserve holds its next meeting to decide on raising rates. It seems a given now that inflation will continue to cook across the country, and the White House is just waiting for March to get here. By then, we’ll know if Russia is invading and where gas prices end up.
I have no hope the White House will wake up and fix the problem. That would require doing something more than monitoring the situation.