The folly of voting based on price inflation

Republicans have been hammering the Democrats because of the current price inflation in the economy.
So what do the Republicans have in mind for fixing inflation?

And for an idea of what they support, check out McCarthy’s Commitment to America website. It contains few specifics, but has three basic tenets:

“Curb wasteful government spending …”
Enact “pro-growth tax and deregulatory policies …” (cut taxes and regulations)
“Make America energy independent …” (specifically through oil and gas production)
Regarding the tax and regulation ideas, those are longer-term ideas since they would require a Republican president.

A fourth promise to end reliance on China and ease supply chain problems does not include specific policy ideas.

What "wasteful government spending" are they referring to? That's hard to say, but you can be certain of two things: 1) they won't touch the hundreds of billions of pork and waste in the military budget, and 2) based on the GOP's opposition to the Dems American Rescue Plan Act, those cuts will directly impact the already struggling working class.
Included in their plan is to address the supply-chain bottlenecks.

Commitment to America, a plan put forward by Republican House Minority Leader Kevin McCarthy, laments the "broken supply chain that has increased costs and left store shelves empty." The plan vows to fix the supply chain issues, including a transfer of additional productive capacity to the U.S. in order to alleviate reliance on China.

This is a very good idea, but it took us 40 years to get us into this situation, so it'll take many years to get us back out. Plus the Devil is in the Details.
Finally there is making "America energy independent."

The U.S. is set to produce an average of 11.8 million barrels oil per day in 2022, which stands 500,000 barrels short of a record set in 2019, EIA data showed.

Republicans like to talk about the Democrats blocking oil and gas drilling, but that is nothing but campaign rhetoric. It's unlikely that even if Republicans removed every last environmental restriction from oil and gas drilling that it would make a significant short-term impact on energy.

We can be certain of one thing - Republicans aren't here to help the working class with inflation. Republicans have vowed to repeal the Biden-backed law that lets Medicare negotiate lower prescription drug prices, and were so eager to help big pharma that they blocked Biden from setting a $35-a-month price cap on insulin. So helping working class people with drug price inflation is not part of their plan.

Besides, we already know what the GOP priority is - extending Trump's tax cuts for the wealthy elites.

Top Republican lawmakers say they’ll try to use the federal debt limit to force President Biden to bargain if they win control of Congress, threatening to revive a form of high-stakes brinkmanship that could push the United States to default on its debt and posing major new dilemmas for the White House next year.

This debt limit game of chicken might play well on Fox News, but considering the illiquidity problems in the Treasury market, 2023 might not be a good year to play this game. The GOP could potentially cause a financial crisis that would swamp any agenda that they had.

So what do the Democrats have in mind to deal with inflation?

Democratic lawmakers, members of President Biden’s Cabinet, and allied organizers and activists are kicking off a multipronged public relations campaign aimed at ensuring voters understand — and appreciate the benefits of — the $700-billion climate-change and drug-prices bill that Biden signed Tuesday.
...Appearing alongside Interior Secretary Deb Haaland, Porter noted that Democrats’ latest legislation — the central pillars include $369 billion to combat climate change and long-sought changes to lower the cost of prescription drugs — will continue to support the water district and similar facilities across the country.

“This new law invests $4 billion in water conservation, efficiency and restoration, and that supplements the more than $50 billion already allocated in the bipartisan infrastructure law to help us modernize our water infrastructure and improve our drinking water supply,” Porter said.

These are all good ideas that I support, buuuttt 1) this has almost nothing to do with solving inflation, and 2) there had zero chances of this passing Congress before the election and even less chance of it passing after the election.
And then just days later, as if to emphasize just how unserious the Democrats were, we got to see this.

The Senate parliamentarian on Saturday dealt a blow to Democrats' plan for curbing drug prices but left the rest of their sprawling economic bill largely intact as party leaders prepared for the first votes on a package containing many of President Joe Biden's top domestic goals.

So while the Democrats technically have "a plan", they never actually meant to do anything.
The Republicans also have "a plan", but without any details it doesn't mean much.

The reality is that voting Democrat or Republican based on the inflation issue is a waste of time because a) it's not a priority of either party, b) the inflation problem isn't strictly a domestic problem, and c) no one is even considering a real fix.
Point 'A' I already explained. Now let's look at Point 'B'.
While inflation is over 8% in the United States, it is even higher overseas.

Preliminary data on Monday from Europe’s statistics office showed headline inflation came in at an annual 10.7% this month. This represents the highest ever monthly reading since the euro zone’s formation...
This proved to be the case once again, with energy costs expected to have had the highest annual rise in October, at 41.9% from 40.7% in September. Food, alcohol and tobacco prices also climbed in the same period, jumping 13.1% from 11.8% in the previous month.

Inflation in Italy came in at 12.8% year on year. Germany also said inflation jumped to 11.6%. Inflation rose by more than 20% in Estonia, Latvia and Lithuania.
Inflation is happening all over the globe, so thinking that you can solve inflation via a domestic election is silly.

The open secret is that we know where the inflation is being created and how it is turning into price inflation, and that neither party has any intention of doing anything about either factor.
The source of the price inflation comes from an unelected group of financial oligarchs - the Federal Reserve.

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Inflation is a choice. It’s a choice for which the Fed is chiefly responsible. The risk of an inflationary spiral arises when policy makers first dismiss the problem and then cast blame elsewhere. Inflation becomes embedded in the price-formation process when the central bank acts belatedly or with insufficient conviction. To date, the Fed has acted as an enabler.
...
“Supply-chain bottlenecks” is the popularized rationalization for the surge in prices. But the supply-chain story sheds more shade than light. Consumer prices are higher because prices are rising at the points of production, assembly and transportation. This is a description of the state of affairs, not its source. The Fed’s inertia in withdrawing extraordinary monetary policy—amid full employment—is the proximate cause of surging prices.

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It seems weird that CNBC, the WSJ, and the WashPost would be sources of truthful information about inflation (or anything), but this the exception to the rule.

wsj2.PNG

Over the past two years, as the Federal Reserve fought to rescue the economy from the clutches of the coronavirus, the central bank’s emergency remedies increased the nation’s money supply by an astonishing 40 percent.

That was almost four times as much new money as had been created during the two years that preceded the pandemic and, to some Fed critics, explains why the United States is experiencing its highest inflation since 1982. All that money chasing after limited supplies of goods such as cars, computers and furniture is inevitably bidding up prices, they say.

Well, truthful information right up until that last sentence. The Federal Reserve doesn't compete with anyone when it comes to the limited supplies of goods such as cars, computers and furniture.
The Federal Reserve manipulates interest rates and buys financial assets. The Federal Reserve also gives out trillions of dollars in loans to major banks all over the world. Thus the Federal Reserve is the source of global asset inflation, but that's only one half of the story.
The other half of the story is how all of that money printing manages to get into the real economy and thus turn into price inflation. That conduit is the real estate market. Investor purchases of residential homes as rental properties as a share of all residential home sales, rose from 10.5% in May 2021 to nearly 18% in May 2022.
The financialization of the economy, combined with financial deregulation, the reluctance of regulators and the Justice Department to prosecute financial fraud, and the massive global bubble in financial assets caused by more than a decade of unprecedented loose money policies, has pushed Wall Street to enter into the home rental market in a very big way.
Since everyone, both residential and small business, needs shelter, this has been the primary conduit between Federal Reserve money printing and the real economy.

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For example, the Fed prints money and pays Raytheon to manufacture missiles. Raytheon pays their employees. The people need to buy food, housing, energy and consumer goods. Raytheon makes missiles -- useless. In the US as in most of the Western World, we turn to China to supply our consumer goods, which they do at a far lower price than we could produce them ourselves(that's another topic). Ask yourself, "Self, what would it do to my lifestyle if all of my consumer goods were 2-3 times more expensive?" China is not the culprit, they have a positive effect on this problem. What about real estate and food? They are large scale markets that are affected by things like scarcity and market bubbles. We like bubbles because it drives up market values. Well, actually most of us don't. So certainly wealth disparity and economic rent are issues. So how are you going to distribute scarce commodities? By lottery, price control, or some social fairness scheme? What, are you a Commie? Energy is an even more interesting and complex issue. Ideally we want cheap, clean energy. Hmmm, it's a global problem as this is a global resource. Ideally we would design a energy supply system that solved this problem now and into the future. The problem is that we are still in the Fossil Fuel Era (Error?). We have no coherent plan to move forward, none that actually solves these problems. Trust me, I've researched energy a lot. That means that we are in a scarce resource allocation methodology, and add international global politics on top of that, and we are in a huge crisis moving forward into a bigger crisis.

The bottom line is that both political parties are completely full of it in claiming to have a solution to inflation. Their plans will only make it worse, with the exception of not printing money (yeah, hah!). Today politics is all propaganda in order to get you to give them the power of government, and then do nothing but wallow in their own importance.

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Capitalism has always been the rule of the people by the oligarchs. You only have two choices, eliminate them or restrict their power.

Let's see. This link:

"were so eager to help big pharma that"

leads to here:

The Guardian - Don't Blame Joe Biden for High Inflation

https://www.theguardian.com/commentisfree/2022/oct/28/republicans-blame-...

Which has a link " (unless)Biden surrenders to GOP demands to cut social security and Medicare."

Which leads to:

Washington Post "GOP to use debt limit to force spending cuts"

https://www.washingtonpost.com/politics/2022/10/18/mccarthy-gop-medicare...

Which, as it turns out SAYS NOTHING AT ALL about any GOP "demands to cut social security and Medicare". The closest it comes is this:

(Republican House Minority Leader Kevin) McCarthy is not the first Republican to say he is open to changes in the entitlement programs. Sen. Ron Johnson (R-Wis.) has suggested that Social Security and Medicare be eliminated as federal entitlement programs, and that they should instead become programs approved by Congress on an annual basis as discretionary spending.

How does "open to changes" become "demands to cut"??

FWIW - Ron Johnson floated the idea - he says - out of concern that there is not enough oversight and accountability to these programs as entitlements, leading to a situation where no one has to take responsibility for their continuing viability, allowing them to continue on a trajectory where they can run until the wheels fall off rather than having action taken to *ensure* their continued viability to *avert* a not-so-eventual disastrous crash.

Fine to disagree, but it has not even been put forward as a concrete proposal and hardly constitutes a 'demand' to do anything.

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@Blue Republic @Blue Republic

Which, as it turns out SAYS NOTHING AT ALL about any GOP "demands to cut social security and Medicare".

I addressed that here.

FWIW - Ron Johnson floated the idea - he says - out of concern that there is not enough oversight and accountability to these programs as entitlements, leading to a situation where no one has to take responsibility for their continuing viability, allowing them to continue on a trajectory where they can run until the wheels fall off rather than having action taken to *ensure* their continued viability to *avert* a not-so-eventual disastrous crash.

That's a load of Sh*t.
First of all, SS and Medicare run a much tighter ship than virtually any other federal government agency.
Second of all, it is Congress' responsibility to maintain those programs.
Thirdly, Johnson in no way wanted to ensure viability of SS and Medicare. He wanted to do what every Republican (and moderate Democrat) wants to do - which is to start cutting it in order to undermine the program and the public's confidence in it. It's what they are doing to public education.

If Johnson, or anyone else, wanted to maintain the viability of SS and Medicare, the answer is extremely simple - lift the caps on payroll taxes. That would change payroll taxes (of which 100% goes to SS and Medicare/Medicaid) from a regressive tax to a flat tax. It wouldn't change anyone taxes unless you make more than $148,000.
It would also be extremely popular.

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@gjohnsit

You offer this quote:

“When 75 percent of House Republicans have endorsed severe Medicare and Social Security cuts, and top Republicans are openly discussing threatening a global economic catastrophe in order to force them into law, it’s clear this would be a very real danger under a GOP House,” said Henry Connelly

Would you care to provide some reference to support the assertion about House Republicans endorsing severe Medicare and SS cuts?

As for global economic catastrophe (what is implied would happen if the US were to default on debt) hasn't the QE/mass money printing of the last several decades brought us to the brink of (if not over it) economic catastrophe?

Anyway, what is the alternative to defaulting on unsustainable debt other than inflating it away?

And is not inflation a huge driver of regressive income redistribution? Default would be extremely painful, but not necessarily more so than runaway inflation.

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@Blue Republic @Blue Republic

As for global economic catastrophe (what is implied would happen if the US were to default on debt) hasn't the QE/mass money printing of the last several decades brought us to the brink of (if not over it) economic catastrophe?

Um, yeh. I can't argue with that. Although economic catastrophe always seems to take much longer than expected.
For instance, the credit markets froze up in August 2007. Bear Stearns went under in March 2008. Yet it wasn't until September 2008 went it all collapsed.

Anyway, what is the alternative to defaulting on unsustainable debt other than inflating it away?

Yep. I can't argue with that one either.
But I will point out that SS and Medicare debt is NOT unsustainable. In fact, the federal government is currently paying SS/Medicare back for all of the money that it borrowed from those programs.

And is not inflation a huge driver of regressive income redistribution? Default would be extremely painful, but not necessarily more so than runaway inflation.

That all depends on how you've invested and where you stand in life.
For instance, when hyperinflation hit Germany in 1923, all the pensioners and everyone on a fixed income were wiped out. However, a small percentage of people took out huge home mortgages before it hit. They made out good.

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That neither party has a viable plan to combat inflation - although I'd rate the R prospects somewhat higher than D.

So, instead, I voted R (and one Green) for election integrity, return to basic principles of limited constitutional republican government - including an appropriate balance between legislative, judicial and executive branches, right to free expression, self-defense, presumption of innocence in criminal matters, election integrity, rejection of elite-run globalist society and affirmation of individual, local, state and national sovereignty, accountability for lies and abuse under color of law by the DOJ, CIA and various other alphabet agencies, affirmation of informed consent, losing wokeness, ending interventionist and proxy conflicts, getting out of the empire business...

Of course I understand that many, if not most, incumbent R's are useless or worse when it comes to the above, but those that *do* support some or all of the above seem to be almost exclusively Republican - find me a modern Democrat in support of the above and I'll certainly consider supporting them.

The Green that got my vote? Dan Pulju for US Senate - running against Ron Wyden (whom I merely dislike, as compared to Jeff Merkley, who rates 'actively detest') and Jo Rae Perkins.

I'm an Oregonian like you, fed up with Federal government corruption. Enough is enough!

We have been put through hell for more than two years with the bungled response to covid. Our rights have been trampled while our economy collapsed. What was Ron Wyden's solution? Get us in yet another war and make inflation even worse! Time for him to go.

As your U.S. Senator, I'll work hard to get Washington on the people's side again:

FOREIGN POLICY

End the Forever Wars - withdraw from Syria, stop interference in Ukraine
Make peace with Russia, Iran and other so-called "adversaries"
Dismantle the rogue military industrial complex
Dissolve NATO and abandon our self-destructive quest for world dominance
End our covert activities, coups, assassinations, and suppression of truth. Free Assange!
Launch a transparent criminal investigation of the CIA and other intelligence agencies
Push for new, multilateral, comprehensive strategic arms control treaties
Respect the human rights of the Palestinian people and end support for Israeli oppression.
Restore disrupted supply chains to stop inflation
Negotiate fair-trade deals, not free-trade corporate giveaways
DOMESTIC POLICY

Revitalize local economies, retail, small business, and manufacturing jobs. De-globalize!
Pro-choice on abortion rights AND covid "vaccines." Medical Freedom!
Big Pharma out of government - eliminate industry capture of regulatory agencies
Thorough, impartial investigation of Federal covid response
Join the civilized world with Medicare for All
Restore parental rights in health and education
Protect the right to bear arms, with common sense safety regulations
End the corporate-governmental partnership to censor our public debate. Rein in Big Tech!
Election integrity: ranked choice voting and eliminate big money
Tackle climate and pollution by reducing consumption, not preserving luxury

The two-party system got us where we are today, and it's only getting worse. Leave it behind and vote for people, planet and peace! You'll be glad you did.

Well, something of a safe, nostalgic (I helped found the Oregon Pacific Green Party) protest vote, and I don't agree with every last bit of it, but it's a stark contrast with what passes for progressive positions in Congress these days...

danforsenate.org

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@Blue Republic I thought that would give you a smile, Blue.
Why did I do that? Because it was whatever Republican that was running against Pelosi. I didn't even bother to see what his name was.

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usefewersyllables's picture

@gjohnsit

that I voted for no repubs. I also voted for no dems. Nor did I vote for any Greens, simply because there were none on the ballot. I did write in “a flaming sack of shit” on one line, but that doesn’t make me a member of the party, right?

I did vote for the legalization of medicinal fungi, because of my heritage. But other than that, my ballot stayed pretty damned blank…

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Twice bitten, permanently shy.

@usefewersyllables

I'm pretty sure I have some ancestral fungi, too...

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If this surprises you, you weren't paying attention

Conservative state policies regarding the environment, gun safety, labor, taxes and tobacco have been associated with higher mortality rates among working-age people relative to liberal policies, new research found.
...According to the study, certain types of policies were more strongly linked to death rates than others. For example, conservative policies on guns — such as fewer bans on semi-automatic weapons or more lax background check rules — were associated with higher suicide rates among men. Lower state taxes on cigarettes and conservative economic tax policies such as lower corporate tax rates were both associated with higher rates of death from heart disease.

One surprising finding, Montez said, was that conservative labor policies — such as a low minimum wage or lack of paid sick leave — were associated with higher rates of death from alcohol consumption. The reasons for that aren't known, but Martez said one theory is that people facing work-related hardships may turn to alcohol as a coping mechanism for stress.
...The study estimated that in 2019, the lives of 171,000 working-age people might have been saved if all states had adopted the most liberal policies. By contrast, if all had adopted the most conservative policies, nearly 218,000 more working-age people might have died.

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Sort of like gjohnsit, except that I live in Daly City, so I couldn't even vote against Pelosi.
I had a plan - allow, if possible even support - the total destruction of the quisling Democratic Party. Create a power vacuum so that a new, honest and responsible party could arise. Such a plan has little chance of succeeding, (the quislings will retain about 150 House seats and 45 Senate and that will be enough for it to remain so that it can continue to stab us in the back)
We are doomed. Without Roe the Ds need something to betray us on, so everything (or everything except SS and Medicare) will be gone by 2025 in the latest. And btw, foreign nations are dumping American debt, much less buying it, so default is inevitable. There will be no jobs and the Fed will have to print a trillion dollars to prop up the stock market and two trillion to feed the defense contractors, so thirty percent inflation anyone? More likely thirty percent a week. Maybe a month of that will get it through America's thick head? Nah. We'll bring back the quislings first. Then everyone left will die.

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On to Biden since 1973

Taxes can be targeted to higher incomes, and would have less of an affect on the working class. The wealthier you are the more you spend on everything. Taxes could extend way down into the top quintile and spending would be cut a lot.

It will never happen. People think they are poor while most of their spending is on discretionary services and items. Both parties are beholden to the upper classes.

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