In last week's Liberty Update, we highlighted the Heritage Foundation's 2022 Index of Economic Freedom…
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Image of the Day: More Economic Freedom = Higher Standard of Living

In last week's Liberty Update, we highlighted the Heritage Foundation's 2022 Index of Economic Freedom, which shows that Joe Biden has dragged the U.S. down to 22nd, our lowest rank ever (we placed 4th in the first Index in 1995, and climbed back up from 18th to 12th under President Trump).  As we noted, among the Index's invaluable metrics is how it demonstrates the objective correlation between more economic freedom and higher citizen standards of living, which this graphic illustrates:

 …[more]

May 19, 2022 • 12:53 PM

Liberty Update

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Welcome Respite from Inflation: Internet Service Print
By Timothy H. Lee
Thursday, March 24 2022
Internet service in the U.S. continues to excel in performance while maintaining price stability for consumers.

Across broad swaths of our economy, inflation continues to punish working Americans.  It now significantly leads the list of most urgent issues confronting the United States, with over 8 in 10 respondents in a separate survey reporting that it has caused hardship to their households in the past month.  

According to the federal government’s latest report, consumer prices rose 0.8% in February alone, and 7.9% over the past 12 months.  Aggravating matters, inflation over the preceding 3 months was even higher at 8.4%, meaning that the inflation is accelerating, not slowing.  

Naturally, the Biden Administration and its apologists descended into excuse mode, mischaracterizing it all as a “Putin price hike.”  Inconveniently for them, Jerome Powell – Biden’s own pick to lead the Federal Reserve – dumped cold water on that notion.  “[T]he inflation outlook had deteriorated significantly this year even before Russia’s invasion of Ukraine.”  

Previously, the Biden Administration insisted that inflation was merely “transitory,” but Powell acknowledged that error as well.  “The rise in inflation,” he admitted,” has been much greater and more persistent than forecasters generally expected.”  Next, they dismissed inflation as attributable to passing supply chain bottlenecks of durable goods.  But the federal government’s own data refutes that claim as well, as service sector prices also jumped 0.5% in February alone.  

Unfortunately for working Americans, Powell announced that he doesn’t expect inflation to return to normal target levels for three more years.  “I believe these policy actions and those to come will help bring inflation down near 2% over the next three years.”  

So the inflation that they once dismissed as “transitory” will instead be with us until 2025.  That’ll make for some awkward Biden 2024 reelection campaign slogans.  

There is, however, one welcome exception to these punishing inflationary pressures:  internet service.  

According to the federal Bureau of Labor Statistics Consumer Price Index, internet service prices rose just 2.8% year-over-year, far below the 7.9% overall inflation rate.  For purposes of comparison, prices for food rose 7.9% over that period, electricity prices rose 9%, new automobiles 12.4%, meats rose 13%, natural gas rose 23.8% and gasoline prices rose 38%.  

That probably seems counterintuitive, since internet service constitutes a comparatively dynamic “edge” sector in our economy, constantly evolving and offering new technological capabilities.  Moreover, internet service price stability occurred despite enormous increases in consumer demand after the Covid pandemic suddenly confined millions of American workers, students and consumers to their homes.  Accordingly, one might logically assume that internet service would be among the most likely sectors to suffer inflationary pressures, not the least likely.  

Additionally, internet service price stability isn’t just a recent phenomenon, but one that has endured for twenty-five years in constant dollars:  

According to the U.S. Bureau of Labor Statistics, prices for internet services and electronic information providers are 19.48% lower in 2022 versus 1997 (a $9.74 difference in value).  Between 1997 and 2022:  Internet services experienced an average inflation rate of -0.86% per year.  In other words, internet services costing $50 in the year 1997 would cost $40.26 in 2022 for an equivalent purchase.  Compared to the overall inflation rate of 2.29% during this same period, inflation for internet services was significantly lower.  

In addition to price stability for American consumers, it bears reemphasis that amid the Covid lockdowns when many expected internet service to collapse under the sudden demand, performance in the U.S. actually improved:  

In early 2020, the Covid-19 pandemic hit the United States…  America’s broadband networks withstood the sudden shift and increase of demand remarkably well.  Wireless download speeds are twice as fast as they were before the pandemic.  Fixed download speeds are now up more than 30%.  While the surge in data initially had an insignificant effect on performance of fixed and mobile data speeds, over time the strong performance of those networks enabled Americans to use their data connections in the way they used it prior to the pandemic – but even more intensely.  

So there you have it.  Internet service in the U.S. continues to excel in performance while maintaining price stability for consumers.  All of that flows from a light-touch regulatory approach that, like clockwork, the Biden Administration hopes to crush beneath a relentless regulatory juggernaut.  

The stakes are too high, however, for Americans to allow that to happen.  The internet service sector is obviously doing something right to achieve these results, and there’s no logic behind jeopardizing that with a hyper-regulatory agenda that has already inflicted such harm across so many other sectors of our economy.  

Quiz Question   
How many days does it take the average U.S. household to consume as much electrical power as one single bitcoin transaction?
More Questions
Notable Quote   
 
"We all know what happens when a tree falls in an empty forest. What happens when a democracy emerges unscathed from a purported vile racist threat to its very existence?Pretty much the same thing, it turns out.The surge in the early vote in Georgia shows that all the smears about the state's new voting law, repeated by everyone from the president of the United States on down, were complete nonsense…[more]
 
 
—Rich Lowry, Editor-in-Chief of National Review
— Rich Lowry, Editor-in-Chief of National Review
 
Liberty Poll   

Should any U.S. government agency have a function called the "Disinformation Governance Board" (See Homeland Security, Department of)?