Conventional economic wisdom harbors a great fear of inflation. But deflation is even worse. It is entirely possible that the economy will seize up again as people decide to stay home and away from stores during the rise of the omicron variant.
DMZ America Podcast #23: The Kyle Rittenhouse Verdict, Does America Need a New Constitution?, Biden Taps the Strategic Oil Reserves & Harris vs. Buttigieg
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Our cartooning colossuses have a full plate this week. As Scott and Ted predicted last week, Kyle Rittenhouse got a get-out-of -jail-free card for early Christmas. We discuss the political and practical ramifications. In addition, we discuss whether or not the U.S. Constitution is in dire need of an upgrade. Also, piggybacking on Ted Rall’s column we dive into inflation. With Scott getting bent all out of shape over President Biden raiding the Strategic Oil Reserves and the boys giggle over a potential Harris vs. Buttigieg contest in 2024.
Inflation Is Irrelevant If You Can’t Buy Anything Anyway
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Inflation worries are pushing down approval ratings for President Biden and the Democrats. But this might be one of those cases of two wrongs making a right. Or maybe three. You can’t really spend extra money on higher prices if there’s no one around to sell you a product, or if the product is still stuck on a container ship somewhere.
Inflation Has Been Killing You for 40 Years. Why Are You Noticing Now?
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Far be it from me to carry water for the Biden Administration or to downplay the impact of inflation on working families as White House officials did in June when they dismissed rising prices as merely “transitory.” When 87% of Americans say they are very or extremely worried about higher prices, and one out of ten people say they can’t afford to buy holiday gifts this year, it’s a serious issue.
Still, you can see why ruling elites are a little mystified by the collective freak-out, and it’s not just because they’re rich so they don’t care (although that’s true).
Truth is, nothing new is happening.
Real inflation has been soaring for four decades. What changed is the artificially-deflated official inflation rate. Which is why people are finally paying attention.
Presidential administrations have repeatedly changed the methodology the Bureau of Labor Statistics uses to calculate the U.S. inflation rate. Why? Politics, of course. The government wants to fool voters into thinking that they are better off, or at least thinking that they aren’t losing ground as quickly as they actually are. Lowballing price increases also saves the Treasury money on big costs like Social Security payouts, which are tied to the official inflation rate.
Housing, food and fuel account for a significant share of typical household expenses, but because they have been rising steadily in price for years, the feds keep lying about how much people really spend on those items. They’ve also factored in “shadow inflation”—the relative cost from year to year of, for example, a phone, is discounted going forward because an iPhone is of higher-quality, with more features, than Ma Bell’s “old reliables.” In reality, of course, you need a standard phone—which, today, is a smartphone. It’s not like you can time-travel back to 1980 to buy a rotary dial. So the BLS doesn’t count a $1000 iPhone as a significant price hike over a $20 plug-in model.
John Williams’ Shadow Government Statistics presents inflation the old-fashioned way, as it was calculated in 1980. The difference is significant, often as much as 10% per year. In September, for example, Forbes reported that the BLS announced the official inflation rate to be 5.4%. But the “real” inflation rate was 13.4%.
According to the official inflation rate, an item that cost $100 in 1980 now costs $336. Because inflation—official inflation—ticked up a few percentage points each year, it has not been a major political issue over the last 40 years.
No one was paying attention to the truth: inflation has been destroying living standards for many years. According to Shadow Government Statistics, due to exponential calculations that $100 item in 1980 now costs about $2,200. But median family income has stagnated; a $100 paycheck in 1980 is now a $335 paycheck, almost exactly the official inflation rate. Wages haven’t come close to keeping up, except for the top 1%. They’re doing great.
Median monthly rent has skyrocketed from $243 in 1980 to $1098 this year; median house-purchase price rose from $47,200 to $382,000. Gas was $1.19 per gallon; now it’s $3.41. College tuition, room and board was $3,900 and is currently $35,720.
So inflation is an ongoing problem. The only thing that’s new is that we are noticing it because it’s being reported. Although, it’s important to note, the inflation rate that is tanking Biden’s poll numbers is still being radically downplayed.
Because the rate is now high enough to register officially, Joe Biden is the first president since Jimmy Carter to be blamed for inflation. Reagan, both Bushes, Clinton, Obama and Trump had high inflation too—but they got off scot-free.
“There is a psychology to inflation that is different from everything else, and it tends to drive how people view the economy because they experience it every day whether it is at the grocery store, gas pump or buying household goods,” says Democratic pollster John Anzalone. As the last 40 years prove, though, the government is also very good at convincing people not to believe their own lying eyes.
(Ted Rall (Twitter: @tedrall), the political cartoonist, columnist and graphic novelist, is the author of a new graphic novel about a journalist gone bad, “The Stringer.” Order one today. You can support Ted’s hard-hitting political cartoons and columns and see his work first by sponsoring his work on Patreon.)
By the Time You Get $15, It’s Not Worth $15
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It’s taken nine years for the struggle for a $15 an hour federal minimum wage to finally reach the corridors of presidential power. Now, of course, we need $25.
Bernie Sanders Is the Best on the Minimum Wage and It’s Not Near
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On the issue of the minimum wage, no top contender for the presidency has been as aggressive as Bernie Sanders. But for workers, that’s not nearly enough. For the last six years, Sanders has been pushing a $15 an hour minimum wage. That’s a major improvement over the current rate but it’s not nearly enough to keep up with inflation. Even under Sanders, workers would, at best, fail to lose more ground. They wouldn’t gain anything. Just another case study of how capitalism is not reformable.
Here is the Progressive Agenda
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Clintonite corporatists still control the Democratic National Committee despite their long string of failure at the polls. But the overwhelming majority of Democratic Party voters—72%—are self-identified progressives.
44% of House primary candidates in 2018 self-IDed as progressive. If you’re after the Democratic nomination for president you have to be—or pretend to be—progressive. Even Hillary Clinton claimed to be “a progressive who gets things done.”
All the top likely contenders for 2020 claim to be progressive—but they would prefer that voters ignore their voting records and unsavory donors. “Kirsten Gillibrand, Cory Booker, and Kamala Harris have spent the past two years racing to the leftmost edge of respectable opinion,” reports New York magazine. “In recent weeks, they have also all reached out to Wall Street executives, in hopes of securing some funding for their prospective presidential campaign.” It does no good for your heart to be in the right place if your ass is owned by bankers.
“You don’t just get to say that you’re progressive,” Representative Pramila Jayapal, co-chair of the Congressional Progressive Caucus, told progressive donors recently.
Jayapal, a Washington Democrat, called the 2020 election a chance to “leverage our power.” She says it’s critical “that we have some very clear guidelines about what it means to be progressive.”
Here are those guidelines.
You can’t be a progressive unless you favor a big hike in the minimum wage. Elizabeth Warren, the first pretty-much-declared candidate for 2020, wants $15 an hour. But she told a 2013 Senate hearing that it would be $22 if it had kept up with increases in worker productivity. The official inflation rate makes that $24 today. And according to the real inflation rate (the official number as it was calculated before the Labor Department downgraded the calculation in 1980 and 1990) at ShadowStats.com, $22 in 2013 comes to at least $35 today.
If the minimum wage had kept up with inflation since 1968 using the same methodology used to track inflation at the time, it would be closer to $80 per hour.
What should be the progressive demand for the minimum wage? Nothing less than $25 per hour.
(For the record, I see no reason why the minimum wage should be lower than the maximum wage. But we’re talking about progressivism here, not socialism or communism.)
Thanks to Bernie Sanders’ 2016 campaign “free college became a litmus test for liberals,” notes The Atlantic. But a 2017 bill cosponsored by Sanders and Warren defines “college for all” rather narrowly. It only addresses public colleges and universities. It would “make college tuition free for families earning $125,000 a year or less and allow current student loan borrowers to refinance their debt at lower interest rates.”
A quarter of American college students attend private schools. Considering that the average cost is $35,000 a year and some run as high as $60,000, even families earning more than $125,000 need help too.
The progressive stance on college should be three-pronged. First, the obscene $1.5 trillion student loan business should be abolished. Student loans should be replaced by grants but if loans exist at all they should be a zero-profit government program. Second, all outstanding loans should be forgiven or have their interest rates dropped to a zero-profit basis. Third, the government should rein in out-of-control public and private college tuition and fees—which have gone up eight times faster than wages—by tying them to the official federal cost of living index.
Progressives agree that Obamacare didn’t go far enough. With 70% of voters in favor, even centrist Democrats like Kamala Harris have climbed aboard Bernie Sanders’ call for “Medicare for all” bandwagon. Warren, Gillibrand and Booker now say they want single-payer public healthcare. Being progressive, however, means demanding more than what mainstream politicians deem practical—it’s about pushing hard for more ways to improve people’s lives.
In 2020 progressives should be calling for nothing less than universal healthcare. If it’s good enough for the rest of the developed world and many developing countries like Botswana and Bhutan, why not us?
I cosigned a letter to Sanders calling on the Vermont senator to use his platform as the country’s most prominent and popular progressive to talk more about foreign policy and to openly oppose militarism. Now it’s time to get specific.
Progressives should demand that U.S. troops come home from any country that did not attack the United States—i.e., all of them. They should put an end to the disgusting drone wars. The bloated nearly-$1 trillion Pentagon budget should be shredded; let’s see what they can do with $100 billion (which would still be far more than Russia’s defense spending).
From banks that charge usurious credit card interest rates to employers who fire full-time employees and hire them back as “independent contractors,” there are plenty of other targets for progressives to go after.
Progressives: you are no longer the ugly stepdaughter of the Democratic Party. You own the joint.
Now’s the time to demand what’s yours, what you want and what’s right.
(Ted Rall, the cartoonist, columnist and graphic novelist, is the author of “Francis: The People’s Pope.” You can support Ted’s hard-hitting political cartoons and columns and see his work first by sponsoring his work on Patreon.)
SYNDICATED COLUMN: Obama’s Governus Interruptus
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Obama is a Uniquely Lazy, Ignorant, Weird President Who Has Done More to Undermine Faith in American Democracy Than We Could Have Imagined In Our Worst Nightmare
Obama will go down in history as a unique president. Because he’s black*, obviously.
Also because he’s a uniquely weird guy: a politician who knows nothing about politics — and doesn’t seem interested in figuring it out. Even while his presidency is in crisis, he’s so obliviously impassively oblivious you have to wonder if he’s living in the same dimension as the rest of us.
Officially (Dow Jones Industrial Average, rich people’s incomes, the fake unemployment and inflation figures issued by the Bureau of Labor Statistics), the economy is recovering. Officially, the wars are ending. (“On the ground” in Iraq and Afghanistan, not so much.) Yet Obama’s approval ratings are plunging, even lower than other recent two-term presidents at the same point in time — including the vile, insipid, illegitimate usurper Bush.
No wonder: Obama’s messaging is lousy. John McCain, a zillion years older than the president he lost to and operating with a brain damaged under torture, can see it — so why can’t Obama?
That’s what McCain was wondering aloud after a panel convened to advise Obama about the NSA issued its report: “Most presidents would have now given a speech and said, ‘OK, here’s what the recommendations are; here’s what I think we ought to do.’ Instead, it just came out.” Like a wet turd. “There’s not a translation of facts and events to remedies that the president supports.” How hard is it to tell the panel to submit their ideas to him first so he can repackage the ones he agrees with as his own? That’s Management 101.
Obama is ignorant. Doesn’t have a clue what his minions are up to. Which is bad. Obama’s ignorance is devastating because he lets us know that he doesn’t know. Reagan only read single-page memos, and though Americans suspected he was daft, they didn’t know. It makes a difference.
Chiming in from the even-a-right-winger-who-loved-Bush-can-be-right-twice-a-year corner of The Washington Post op-ed page, Charles Krauthammer marvels: “With alarming regularity, [Obama] professes obliviousness to the workings of his own government. He claims, for example, to have known nothing about the IRS targeting scandal, the AP phone records scandal, the NSA tapping of Angela Merkel. And had not a clue that the centerpiece of his signature legislative achievement — the online Obamacare exchange, three years in the making — would fail catastrophically upon launch. Or that Obamacare would cause millions of Americans to lose their private health plans.”
Dude went to Columbia and Harvard. He seems smart. What’s wrong with him? Is he — as his former colleagues at the University of Chicago, who noticed that he never published — lazy? He’s certainly a far cry from the LBJ who, according to his biographer Robert Caro, routinely burned the midnight oil committing every sentence of every bill, ever, to memory.
Obviously, a president who finds time to watch sports, play golf and kick off for vacations for weeks at a time — while the global economy is melting down — hell, while his signature legislative accomplishment, Obamacare has all but completely imploded — is lazy as all get up. Still, there’s nothing new about presidential sloth. Reagan, Clinton and Bush all worked less than the average minimum-wage worker whose misery they were steadfastly ignoring.
Obama is unique, though. It goes beyond laziness. He doesn’t follow tried and true practices of presidential governance that have served his predecessors for more than two centuries. Intentional? Who knows? It seems more than likely that (and this is so outlandish that I’ve literally waited years to write these words) he is so ignorant of history that he doesn’t know why and how previous presidents have failed and succeeded. Because, let’s face it, if this is three-dimensional chess, he’s down three queens.
The most blinding example of Obama’s ignorance of/unwillingness to/disdain for the act of governing/politicking is what I call Governus Interruptus — delivering a major speech on a problem, then failing to follow up with a policy initiative (a bill, say).
“President Obama’s speeches…are often thoughtful, nuanced, highly evocative, and exceptionally well-delivered — and worse than inconsequential,” Amitai Etzioni writes in The Atlantic. “They raise expectations — a world without nukes! Ending global warming! Finally curbing gun violence! — but are not followed by much of anything. These barren speeches are one reason the public, and especially the young, are becoming disaffected from politics, bad news for any democracy.”
Speaking of LBJ: When he announced “a national war on poverty” with one objective — “total victory” — to lift up the people “who have not shared in the abundance which has been granted to most of us, and on whom the gates of opportunity have been closed” — he didn’t leave it at that. Food stamps, Head Start and other anti-poverty programs followed…laws that began as bills. Bills drafted by the White House and proposed to Congress, which the president strong-armed into passing.
Where is Obama’s nuclear disarmament bill? Why hasn’t he convened a global summit to address the environmental emergency, with the U.S. leading the way with dramatic initiatives to reduce greenhouse gases? Where is his gun control proposal?
Obama jawboned his way into the White House. Evidently Obama hasn’t read enough to know that talking isn’t governing.
Either that, or he doesn’t care.
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COPYRIGHT 2013 TED RALL
HARRISBURG PATRIOT-NEWS CARTOON: Steeler Beer
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This cartoon is for The Patriot-News in Harrisburg, Pennsylvania.
Steelers fans grouse about $9 beer at Heinz Field…then buy them. What would they do if it went even higher?
Proletariat Steak
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A little noticed aspect of the fiscal cliff deal between congressional Republicans and the White House involved the establishment of a new way to calculate the federal inflation rate. Now we will have the so-called “chained consumer price index.” The chained CPI literally assumes that, as products increase in price, we don’t have to actually counts them as having increased in price because consumers can replace those more expensive items with cheaper substitutes. This allows the government to claim that inflation is lower or nonexistent, thus denying recipients of Social Security and other federal entitlement programs their right to a cost of living increase.
