President Biden and the corporate media are growing increasingly frustrated by the failure of Americans to accept their assurances that the economy is in good shape. They insist that there is an inexplicable disconnect between the public’s gloomy perception of the economy and the sunny state of affairs described by official government statistics. A vocal proponent of this view is New York Times columnist Paul Krugman. As recently as Friday, he declared himself unable to understand pervasive pessimism about the economy and dismissed the phenomenon as a “vibecession.” Sorry, no sale. Krugman is a Nobel laureate in economics who certainly knows this is nonsense.
When Americans go to the grocery store, they don’t think about the unemployment rate, the stock market, or the moronic COVID shutdowns.
Indeed, he proves it by invoking the Federal Reserve’s Economic Well-Being survey, which he describes as the “gold standard for assessing economic perceptions.” Yet Krugman neglects to mention this passage from its first paragraph: “Despite the moderating pace of inflation, many adults continued to indicate that higher prices were a challenge in managing their finances.” This is, of course, due to the cumulative effect of inflation. As Yahoo Finance reports, “Prices as measured by the seasonally adjusted Consumer Price Index (CPI) are now up over 19.4% in the three-plus years since Biden took office.” Sadly, as the American Spectator’s Seth Forman noted in his March 25 newsletter, this understates the problem:
Now we find out — from former Clinton/Obama/Democrat economic advisor Larry Summers no less — that the government is also lowballing its inflation numbers, as measured by its Consumer Price Index … Using something resembling the old way of calculating inflation, Summers et al. find headline CPI would have peaked at 18 percent in November 2022 (not 8.6 percent). This alternative inflation measure would have stood at 8 percent in November 2023, the last month studied in the report. The fake CPI in November of last year was 3.1 percent.
The full report does not inspire confidence in the Biden administration’s inflation policies. Nor does the President’s prevarications concerning the inflation rate he inherited from Trump. At least twice this month he has looked the nation in the eye and insisted that inflation was at 9 percent when he took office. The Associated Press fact checked this bazaar claim: “AP’S ASSESSMENT: False. Inflation was at 1.4% in 2021 as Biden assumed the presidency.” When Fox’s Neil Cavuto confronted Council of Economic Advisers Chair Jared Bernstein about Biden’s claim, Bernstein compounded the lie: “He’s making the point that the factors that caused inflation to climb to 9 percent were in place when he took office.” (READ MORE from David Catron: Why Trump Eagerly Accepted Unfair Debate Rules)
In reality, of course, the annual inflation rate averaged 1.9 percent during Trump’s term in office. When Biden arrived, the economy was rapidly recovering from the lockdown-induced recession and probably would have fully recovered within a year — absent excessive government meddling. Nonetheless, Biden and his Democrat accomplices on Capitol Hill went on a wild spending spree beginning with the notorious $1.9 trillion “American Rescue Plan.” Liberal economists like Steven Rattner warned the White House that this unnecessary bill would reignite inflation. That is precisely what happened, of course, and the voters are tired of being told the problem is illusory: As Amy Walter of the Cook Political Report explains:
Democrats wonder why Biden isn’t getting more credit for an economy where unemployment is at record lows, the stock market is booming, and the post-COVID economic hangover has lifted. But those aren’t the measuring sticks that voters use to gauge the health of the economy. When asked what they thought the best markers of a strong economy were, few (6%) picked the stock market, only 13% picked low unemployment, and just 9% chose household income. Instead, a healthy majority (54%) said the cost of living was the best way to measure the strength of the economy.
This shouldn’t surprise anyone with basic math skills. Misleading stories in the corporate media notwithstanding, real wages have declined since Biden moved into the White House. When Biden took office in January of 2021, the Real Earnings report from the Bureau of Labor Statistics (BLS) indicated that average hourly wages stood at $11.43. The latest Real Earnings report from the BLS, issued on May 15, showed average hourly wages have declined to $11.09. Why, then, are “news” outlets telling us that wages are outpacing inflation? They are reporting nominal wages, which don’t account for the rising cost of living. Real wages account for inflation in order to calculate your paycheck’s true purchasing power.
When Americans go to the grocery store, they don’t think about the unemployment rate, the stock market, or the moronic COVID shutdowns. They think about how much more everything costs than it did when Biden was inaugurated. This is particularly true of working class Americans for whom a larger share of their income is dedicated to basic necessities. This is why they are far less enchanted with Biden and the Democrats than they were four years ago. It is why the polls indicate, for the first time in decades, that significant percentages of Black and Hispanic voters may well cast ballots for a Republican. Democrats are in denial about this, of course, but too many respected surveys are getting similar responses. (READ MORE: Trump Owns the Working Class Vote)
In the end, the real disconnect has nothing to do with the ability of Americans to grasp the financial realities of their day-to-day lives. It is the failure of Biden, the Democrats, and the corporate media to see that most voters are obviously worse off than they were in January of 2021. If they continue to insult the intelligence of these voters by insisting that there is no cost-of-living crisis, they risk a defeat that cannot be overcome by any amount of ballot harvesting or innovative vote-counting. The margin, to coin a phrase, will indeed be “too big to rig.”
The post It’s the Cost of Living, Stupid! appeared first on The American Spectator | USA News and Politics.
