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Posts Tagged ‘inflation’
September 8th, 2022 at 1:04 pm
Image of the Day: Biden’s War On Drilling
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Joe Biden has leased fewer acres for oil and gas drilling than any other president.  Don’t dare suggest that he bears any responsibility for skyrocketing energy prices during his presidency, though.

Biden Administration's War on Drilling

Biden Administration’s War on Drilling

August 18th, 2022 at 6:01 pm
Amid Recession and High Inflation, Groups Like the “National Consumer Law Center” Seek to Narrow Rather Than Expand U.S. Consumer Lending Options
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As inflation continues to spiral upward at multi-decade highs and with the U.S. economy now in recession, maintaining an “all of the above” array of lending options for American consumers becomes more and more important.  Unfortunately, activist groups like the “National Consumer Law Center” aim to do the opposite and limit rather than expand consumer options.

For a sense of consumers’ growing desperation, consider a Federal Reserve report on exploding credit card debt, as highlighted by Steve Cortes:

How have consumers dealt with these skyrocketing prices? The simple answer, unfortunately: via credit cards, particularly for working-class households. Just last week, the Federal Reserve Bank of New York issued a damning report on this credit binge for consumers, into a pronounced economic slowdown.

Total consumer debt rose a staggering $40 billion in June, far surpassing Wall Street expectations of a $25 billion increase…

A huge portion of this new debt flows from costly, risky credit card use. In fact, for the April-June second quarter of 2022, total credit card debt rose a staggering $46 billion, the biggest jump in 20 years. Americans pile into new accounts to accomplish this borrowing, opening up a whopping 233 million new cards during that second quarter, the most new cards since 2008. Such comparisons to the Great Recession should worry everyone.”

Additionally, credit cards aren’t always a viable option for many Americans, and traditional bank loans aren’t always an option due to small amounts needed for short-term emergencies.  Whereas higher-income Americans with stronger credit history can borrow from banks, utilize assets they possess as leverage or use their savings, consumers with lower credit scores or lacking sufficient savings cannot.  Indeed, according to the Fair Isaac Corporation, some 46% of consumers possess credit scores below 700, meaning that traditional bank loans aren’t possible for them.

In such circumstances, struggling Americans can access the money they need for the short-term via consumer finance loans.

Groups like the National Consumer Law Center (NCLC), however, want to limit the availability of such options, which they falsely characterize as some sort of scheme “to snare consumers into predatory loans for auto repairs, tires, furniture, and even pets.”

In reality, however, the unintended consequence of efforts like that of the NCLC will be to drive temporarily strapped consumers to seek out illegal loansharks, suffer overdrafts, or simply be unable to cover their temporary costs.  As none other than the World Bank found, such limitations lead to “increases in non-interest fees and commissions; reduced price transparency; lower number of institutions and reduced branch density; and adverse impacts on bank profitability, in addition to the lack of access for smaller and riskier borrowers.”

That doesn’t help the people whom groups like the NCLC claim to protect, it hurts them.  Accordingly, American consumers and elected leaders should recognize the peril that NCLC and similar groups present.  Their efforts would only make consumer lending more difficult, more dangerous and more expensive.

August 5th, 2022 at 11:25 am
Image of the Day: Prescription Drug Prices Aren’t the Inflationary Problem
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As Senators Joe Manchin (D – West Virginia) and Kyrsten Sinema (D – Arizona) betray their “moderate” charade and join Senate Majority Leader Chuck Schumer’s (D – New York) latest tax-and-spend monstrosity, we’ve highlighted the preposterousness of the claim that imposing drug price controls will in any way address out-of-control inflation.  Price controls will kill innovation, but do nothing to reduce inflation, because prescription drug prices simply aren’t the problem.  Once again, economist Steve Moore offers a handy illustration of that truth:

Prescription Drug Costs Aren't the Problem

Prescription Drug Costs Aren’t the Problem

July 18th, 2022 at 1:13 pm
Image of the Day: “Putin Price Hike?” No, a Biden Inflation Blowup
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While Joe Biden attempts to blame a shifting array of scapegoats for inflation, the simple numbers demonstrate the unmistakable truth.  Consumer prices began skyrocketing upon Biden’s inauguration in January 2021, and wage gains plummeted toward an immediate deficit relative to inflation.  During the Trump presidency, wages consistently exceeded inflation, only rarely even coming in even, let alone in negative territory.  Economist Stephen Moore illustrates the reality unambiguously:

 

 

 

May 10th, 2022 at 9:46 am
Image of the Day: Taxpayers Really Fuel EV Programs
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We recently sounded the alarm on how the Biden Administration, political left and crony capitalist big business interests are coalescing on an idea almost too bizarre to be real:  heaping new carbon taxes on traditional energy sources in order to “reduce energy costs.”  We subsequently illustrated one of the main reasons for that novel ploy:  so-called “green” energy sources are non-competitive without government intervention to artificially make more efficient fossil fuel sources more costly.  Courtesy of economist Stephen Moore, we have another biting illustration of that dynamic:

Taxpayers Power

Taxpayers Power “Green” EV Initiatives

 

There’s nothing wrong with electric vehicles, and in fact they offer a promising future technology.  But that should occur via market forces and consumer choice, not artificial government costs and subsidies paid by strapped taxpayers.

April 18th, 2022 at 9:54 am
Image of the Day: “Light Touch” Regulatory Policies Have Kept Broadband Prices Low
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As Americans express growing alarm over consumer price inflation that commenced in January 2021 under the Biden Administration and Pelosi/Schumer Congress (see here), it’s worth highlighting how critical broadband access on which our economy increasingly depends has diverged from that trend.  It’s also worth highlighting that stems from the fact that internet service has so far escaped Biden Administration regulatory attempts to reverse free-market progress achieved under former Federal Communications Commission (FCC) Chairman Ajit Pai:

April 4th, 2022 at 12:05 pm
Image of the Day: Biden’s Silly “Putin Price Hike” Excuse
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Apparently nothing is too preposterous for Joe Biden and his apologists.  They attempt to rationalize out-of-control inflation and wage erosion as a “Putin Price Hike,” but a simple chronology immediately refutes that (unless Vladimir Putin somehow took control of the U.S. economy in January 2021):

 

“Putin Price Hike?”

December 10th, 2021 at 12:39 pm
Image of the Day: “Build Back Better?” More Like Build Back Bigger Inflation
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As if enough reasons to oppose Joe Biden’s “Build Back Better” agenda, from destructive drug price controls to higher taxes, didn’t already exist:

Build Back Bigger (Inflation)

Build Back Bigger (Inflation)

 

October 22nd, 2021 at 12:34 pm
Image of the Day: Good News – As Inflation Accelerates Elsewhere, Internet Service Costs Actually Decline
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In our Liberty Update this week, we highlight the Biden Administration’s role in rising inflation, some of its under-discussed negative consequences and its shockingly tone-deaf responses and rationalizations.  In  positive news from NCTA, The Internet & Television Association, however, internet service provider costs are actually declining:

Good News: Internet Service Costs Decline

Good News: Internet Service Costs Decline

 

October 12th, 2021 at 8:59 am
Image of the Day: Biden’s Unwelcome Gift of Inflation to America in One Chart
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From Andy Puzder, a snapshot of how inflation dreadfully continues to outpace American workers’ paycheck gains:

Biden's Inflationary Gift

Biden’s Inflationary Gift

August 24th, 2021 at 4:51 pm
Image of the Day: Meanwhile, the Biden Inflation Boom Continues…
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The Biden Administration’s failures aren’t exclusively overseas in nature.  For seven consecutive months now, average U.S. hourly wages have declined when adjusted for inflation.

 

The BIden Inflation Boom

The Biden Inflation Boom

 

 

August 13th, 2021 at 1:11 pm
Image of the Day: The Biden Inflation Surge
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From RealClearPolitics, a comparison of wage gains (blue line) versus inflation (red line) under President Trump and now Joe Biden.  But don’t sweat it, Joe – nothing that another creepy photo-op to an ice cream shop for fawning reporters won’t cure.

Biden's Inflation Boom

Biden’s Inflation Boom

 

August 2nd, 2018 at 12:48 pm
Even Leftist Economist and Clinton Administration Adviser Admits Need to Index Capital Gains Taxes for Inflation
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The Trump Administration is contemplating a move to improve the way the federal government taxes capital gains by indexing rates for inflation, which amounts to a de facto tax cut.

It’s a no-brainer in terms of fairness and efficiency, as illustrated by the fact that even leftist economist and former Clinton Administration adviser Alan Blinder acknowledges the need for it today in The Wall Street Journal:

Why index gains?  Suppose you own a stock for many years, during which time overall prices have doubled because of inflation.  Over the holding period, the value of your stock has also doubled.  When you sell, the proceeds have precisely the same purchasing power as the original purchase.   There’s no gain, no loss.  But under current tax law, you owe taxes on the phantom ‘gain.’   Worse, if your stock went up by less than the cumulative inflation, you’ll still get taxed despite your loss.  This is unfair and dysfunctional.”

We’ll admit that it’s amusing to see a man who played the role of cheerleader for Barack Obama, who openly circumvented the Constitution and legislative process using his “pen and phone” to enact policy, demand that Trump refrain from making the change and instead allow Congress to act.  Nevertheless, we’ll gladly celebrate his support for the underlying need for change.

January 11th, 2013 at 9:08 am
Ramirez Cartoon: The $1 Trillion Wooden Nickel
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Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez. 

View more of Michael Ramirez’s cartoons on CFIF’s website here.

June 5th, 2012 at 2:46 pm
CATO: Reform the Fed by Diversifying Board Members

Cato expert Mark A. Calabria suggests a simple reform that would make decisions by the Federal Reserve Board more responsive to America’s different regional economies – include at least one board member from each Federal Reserve region.

Congress imposed a “geographic diversity” requirement upon the Fed for good reason. Regions of the country do not move together. Nevada’s 11.7 percent unemployment rate, for example, is significantly above South Dakota’s 4.3 percent. If the Fed lacks a wide range of voices, then its policies are not likely to reflect the economic differences across our country. An interest rate policy that might be appropriate for New York City, and its financial sector, might not be appropriate for industrial Ohio. Just the fact that only one current Fed governor, Janet Yellen from San Francisco, is from west of the Mississippi raises questions as to the legitimacy of Fed decision-making.

Calabria points out that another benefit of diversifying board membership is that doing so follows the law.  The Federal Reserve Act requires that, regarding members of the board, “not more than one of whom shall be selected from any one Federal Reserve district,” so that those making monetary policy decisions “shall have due regard to a fair representation of… geographical divisions of the country.”

Unsurprisingly, this easy to apply standard was recently violated when President Barack Obama nominated and the liberal Senate confirmed new members from Massachusetts and Maryland, even though two current members also hail from those states.  Combine this with the New York Fed’s distinction as the only district with a permanent vote, and there is a regional – and arguably illegal – bias in favor of the Northeast.

Every region of the country should be represented equally when the Fed Governors decide how much money to print and where to peg the interest rate.  To be sure, it would be better if the free market was deciding these issues, but that’s not the reality of the 21st century’s administrative state.  With that in mind, perhaps the cry could be, “No manipulation without representation!”

October 27th, 2011 at 12:27 pm
Businesses Are Scared to Death

Ashton asks me if I know of businesses eager to expand. The answer is no. Or, rather, “Bleep no!” And today’s news about the dollar falling even farther will worry them even more. Obama regulatory policy, Obama/Reid fiscal policy, and Bernanke’s recklessly inflationary monetary policy all have given businesses the willies. Now comes word that consumer confidence, already low, has fallen even more precipitously. Nothing will give businesses confidence until the leftists in the executive branch are gone.

That said, I agree wholeheartedly with the main thrust of Troy’s excellent column about tax reform — bold reform of individual income taxes is desperately needed, and Mitt Romney’s failure to propose such a thing is another horrendous mark against him — but I disagree that individual tax reform should come first in this horrid economy, and I disagree that only four people still have a chance to win the Republican nomination.  Individual tax reform, no matter how designed, will take tremendous time and effort to work through the legislative process, with all sorts of trade-offs along the way. And in this economy, the problem isn’t really coming from individuals, it’s coming from a failure of corporations to re-invest the mountains of cash on which they now sit.

All of which is to say that the best way to cut the Gordian knot, for the current economy, is to completely eliminate corporate income taxes in one fell swoop. Almost as good is to cut them in half, and eliminate them entirely for manufacturers, as Rick Santorum would do.  Which leads us to the failure to mention Santorum as a real contender for the nomination. A word to the wise: Check out his grassroots organization in Iowa. It’s the single best one to date.

Sure, voters are focused on how their taxes, not corporate taxes, will change. That’s why 9-9-9 proved so sexy. But they care about jobs as well, and if the sale is made right, they’ll see that the good jobs will come fastest from corporate tax reform, not individual tax reform. All Santorum need add when he’s discussing his tax proposal is that he has always supported various versions of the flat tax, that the idea isn’t anything new, and that so many off-the-shelf flat-tax plans have been out there for a quarter-century that the exact details don’t matter. He’s for a flatter, simpler individual tax code, period. But you don’t worry about income taxes if you don’t have a job, and a one-stop corporate-tax slash is the best way to achieve that.

May 3rd, 2011 at 10:33 am
More on Inflation

When I wrote last week on the coming stagflation, I didn’t know that by formerly used official US inflation measures, current inflation is running at 10%. Niall Ferguson says it is. His terrific column is here.

This Ferguson paragraph mirrors one of mine from last week:

To ordinary Americans, however, it’s not the online price of an iPad that matters; it’s prices of food on the shelf and gasoline at the pump. These, after all, are the costs they encounter most frequently. And with average gas prices hitting $3.88 a gallon last week, filling up is now twice as painful as when President Obama took office.

(From my column last week: “The Fed economists may discount food and gasoline prices as unstable indicators that aren’t part of “core” inflation, but for most Americans food and gas cost hikes are the very definition of inflation. These are the things they pay for every day; they are the items closest to their psyches. Those gas prices on the big billboards at every filling station have an outsized effect on American psychology.”)

Here’s the Ferguson bit about how the inflation measure has changed:

And the reason the CPI is losing credibility is that, as economist John Williams tirelessly points out, it’s a bogus index. The way inflation is calculated by the Bureau of Labor Statistics has been “improved” 24 times since 1978. If the old methods were still used, the CPI would actually be 10 percent. Yes, folks, double-digit inflation is back. Pretty soon you’ll be able to figure out the real inflation rate just by moving the decimal point in the core CPI one place to the right.

Good stuff. Read the whole thing.

April 26th, 2011 at 9:57 pm
Non-Existent Inflation? It’s Everywhere.
Posted by Print

As we prepare for the beginning of the era of the Federal Reserve as PR machine, we can anticipate a glut of federal statistics hand-picked to convince the public that the growing evidence of inflation is psychosomatic. Of course, it helps that the Fed’s core measure of inflation excludes such basic staples as food and energy. But as Jeffery Lord points out at the American Spectator, the main street indices tell a sharply different story than the Wall Street rationalizations:

Milk. A gallon of skim. At the local Giant in Central Pennsylvania:

January 11, 2011: $3.20
February 28, 2011: $3.24
March 6, 2011: $3.34
April 23. 2011: $3.48

That would be a 28 cent rise in a mere 102 days, from January to April of this year. The third year of the Obama misadventure.

Then there’s the celery. Same sized bag. Same store.

January 11, 2011: $1.99 a bag.
March 6, 2011: $2.49 a bag.

A rise of 50 cents in 54 days.

If this trend continues, the Fed will have to find an even more counterintuitive metric for gaging inflation. Perhaps one that doesn’t include prices.

April 12th, 2011 at 11:10 am
Fed: $4 Gas in March? Nothing to See Here, Folks.
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Gasoline prices have increased from the $3 range to the $4 range in just one year, we’re approaching all new record prices set in 2008 even though it’s not even summer driving season yet.  But ignore higher gas and food prices, America.  They only matter if you actually drive or eat. Federal Reserve Vice Chair Janet Yellen says it’s all “transitory,” and we need to keep the “stimulative” inflationary monetary spigots open because it “continues to be appropriate.”

Even the European Central Bank is raising interest rates in an attempt to avert inflation.  Of course, there isn’t an Obama reelection campaign to sustain over there.

March 25th, 2011 at 9:38 am
Video: The Alternate Reality of Liberal Budgets
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In this week’s Freedom Minute, CFIF’s Renee Giachino discusses the national debt crisis, Congress’ addiction to excessive spending and the Democrat’s budget plan.  Giachino warns that without serious and immediate action to right the nation’s fiscal ship, America is destined to a future of higher taxes, greater inflation and a lower standard of living.