The hits keep on coming with rising inflation. And it’s unclear whether anyone in Joe Biden’s administration cares. They’re more focused on spinning increasing inflationary pressures as a good thing.
We’ve gone from them denying that inflation even exists, to insisting it’s a short-term problem, to now actually saying it’s a good thing.
Meanwhile, inflation is going nowhere but up at the moment.
The Wall Street Journal spoke with numerous large businesses that are prepping another round of price increases: “P&G, maker of Tide detergent and Pampers diapers, last week announced a third round of price increases, which will go into effect over the next few months, and told investors to expect profitability to accelerate as the year progresses.”
They weren’t alone. Nestlé, Chipotle Mexican Grill, AT&T, Verizon, and others all said higher prices were coming. These companies are facing higher costs from labor, parts, and more, and they’re passing that along to the consumer.
A certain level of inflation is acceptable up to a point. But as other reporting from the Journal indicates, we’re approaching the tipping point, where consumers will start changing how they think and shop: “Confident consumers have swallowed higher supermarket prices so far this year, but the risk of indigestion is growing. For companies that make staple goods, asking for more money is delicate.”
Generally speaking, the Journal reports, “as a rule of thumb, price increases above 5% are harder to implement without changing buying patterns, according to supermarket and consumer goods executives.” And if you’re looking at food prices, “food inflation is approaching more sensitive levels in the U.S., where prices for food consumed in the home increased 4.5% in September compared with the same month of 2020.”
We’re riding that line where higher prices move from drawing groans from consumers to prompting action on things as simple as food. This kind of reaction has already occurred in sectors like housing and new and used cars.
Meanwhile, the Biden administration is entirely out to lunch. White House Chief of Staff Ron Klain calls inflation “high class problems.” White House Press Secretary Jen Psaki defended that notion by saying, “What the point is here…is that we are at this point because we’ve made progress in the economy.”
The White House has continued to repeat the line that inflation is good for the economy. They’ve praised things like cost of living increases for Social Security.
The problem, simply put, is that inflation is rapidly eating into any cost of living increase or wage increases made by employees.
Higher food prices have a political cost, too. History makes the point clear: Your average person will vote, protest, and in some cases, even overthrow a government over excessive food prices. Ignoring inflation on food prices has been a dangerous exercise for any politician at any point in history.
During the Arab Spring of the early 2010s, the uprising started when high food prices were leading to hungry people being left with no other choice. People couldn’t buy anything, bread, meat, vegetable, or anything else without feeling extorted. Governments toppled over that.
The French Revolution, which led to the Reign of Terror, got pushed over the edge because poor harvests and skyrocketing food prices led to desperate and hungry people. The government was toppled, people were murdered in droves, and the country was consumed into chaos. One of the things Napoleon knew intimately was the need to keep food prices in check. He made strategic granaries available to ensure the people and his soldiers were continuously fed.
America was on the brink of similar desperation during the Great Depression. When Hoovervilles littered the country, filled with unemployed and impoverished people, and famines racked the midwest, America experienced a surge of radical ideologies everywhere. Fascism and communism suddenly found an audience here because the people became desperate.
Whether or not it worked economically, the importance of Franklin D. Roosevelt’s New Deal was as much about getting the American people to buy back into the American system. People need to believe their government is acting with purpose, in their interest. FDR’s action effectively killed the momentum of other, more radical ideologies from taking root in America.
The Biden administration cannot be bothered to care about any of this. They only care about themselves and how they appear in the elite press. That’s what’s driven everything they’ve said over the last year. They’ve shifted from denying it was a problem to saying it’s a short-term problem to now claiming it’s a good thing.
Economic upheaval begets political upheaval. Political leaders need to read those signs and react accordingly. The Biden administration is hand-waving off every warning signal blaring in the global economy, from inflation at home to a potential collapse in Chinese.
The adults are not in charge in the White House. It’s unclear that anyone is. They’re all too busy admiring the magazine profiles they get.
That’s dangerous hubris from any political leader.