Posted on 06/20/2022 6:58:18 AM PDT by Red Badger
If there’s a topic uppermost on most people’s minds today, it is certainly the surge in inflation over the past year. Soaring prices have affected virtually every person in the country. And Americans say they know who’s responsible: President Biden. Surprisingly, that includes more than half of all Democrats, too.
May’s 8.6% annualized inflation rate, the highest in 40 years, shocked financial markets and alarmed consumers and workers alike. As we’ve been reminded over the years, inflation acts as a tax on everyone, lowering standards of living, raising costs across the board, and eroding the very foundations of a productive economy. And once entrenched, it’s very difficult to get rid of.
How did this happen? And does President Biden deserve the blame? June’s monthly online I&I/TIPP Poll sought to answer those questions, asking 1,310 adults across the country the following question: “In general, how responsible are President Biden’s policies for causing the current inflation?”
The answers to the poll, which was taken from June 8-10 and has a margin of error of +/-2.8 percentage points, couldn’t be less comforting for Biden and the Democratic Party.
Of those responding, 64% said Biden was “responsible,” choosing either “very responsible” (38%) or “somewhat responsible” (26%). Just 25% answered “not responsible”, with 17% saying “not very responsible” but a far-smaller 8% saying “not at all responsible.” “Not sure” was 10%.
But most surprising of all, Democrats have thrown in the towel on Biden’s economic leadership, with 53% blaming Biden’s policies for inflation vs. 39% saying they weren’t responsible.
Indeed, of all the major demographic groupings followed by the I&I/TIPP Poll, just one was below 50% overall: self-described “liberals.” All the other groups, including blacks (61%), Hispanics (61%), men (68%), women (61%), along with every income group, every age group, and every education group, all felt Biden’s policies caused the current inflation mess.
It’s hard to imagine a more sweeping repudiation of a president’s economic policies.
I&I/TIPP also asked a companion question about the impact of federal spending on inflation: “Generally speaking, does excessive government spending . . . ” “worsen inflation,” “lessen inflation,” or “not sure”?
Two-thirds (66%) answered that too much federal spending made inflation worse. Just 14% said it actually lessened inflation. A larger share, 20%, weren’t sure.
And once again, Democrats, Republicans and independents were in general agreement, with 52% of Dems saying federal spending made inflation worse, compared to 86% of Republicans and 69% of independents.
Indeed, of all the major demographic groupings followed by the I&I/TIPP Poll, just one was below 50%: Self-described liberals. Just 46% of that grouping felt Biden’s policies were responsible for pushing inflation higher.
That compares to 86% for self-described conservatives, and 63% for those who call themselves moderates.
For the record, the question the I&I/TIPP Poll asked came in response to recent White House claims that uncontrollable forces outside of their policies were to blame for the upsurge in inflation.
Biden and his spokespeople have steadfastly denied any responsibility for the surge in inflation and said a recession was “not inevitable.”
“We’re in a stronger position than any nation in the world to overcome this inflation,” Biden told Associated Press in an interview. “If it’s my fault, why is it the case in every other major industrial country in the world that inflation is higher? You ask yourself that? I’m not being a wise guy.”
But, as noted by Fox Business, “The latest figures on inflation for these countries indicate the following: Germany at 7.9%, France at 5.2%, Japan at 2.5%, India at 7.04%, Canada and Italy at 6.8%, and Saudi Arabia at 2.2%.” Meanwhile, U.S. inflation in May hit a four-decade high of 8.6%.
Last week, after calling inflation his “top economic priority,” Biden blamed the more-than-year-long surge in inflation on Russian President Vladimir Putin, oil companies (especially Exxon), big shipping companies and Congress, which is now controlled by his own party.
“One thing I want to say about the oil companies,” said Biden. “They have 9,000 permits to drill. They’re not drilling….Why aren’t they drilling? Because they make more money not producing more oil. The price goes up.”
Meanwhile, Biden’s Treasury Secretary Janet Yellen said Sunday that she expected the economy “to slow.” While, like Biden, she also doesn’t think a recession is inevitable, she called current inflation “unacceptably high.”
No mention by either Biden or Yellen that spending has been elevated since the onset of the pandemic in 2020, with nearly $3.6 trillion in COVID-related total outlays so far plus proposals for trillions more in stimulus and “Build Back Better.”
As the I&I/TIPP Poll shows, most Americans believe all that spending, plus the idling of a large number of workers at the same time we locked down the economy, led to the surge in inflationary pressures.
As for a recession, the Fed just hiked interest rates by 75 basis points, the biggest jump in 28 years, and is likely to raise rates significantly further in coming months to rein in runaway inflation.
A recent study by former Treasury Secretary Larry Summers (who warned repeatedly in 2020 and 2021 about the dangers of excess federal spending) and Harvard economist Alex Domash found that, since 1955, “every time inflation ran hotter than 4% and unemployment fell below 5%, the economy tumbled into recession within two years.”
Today, unemployment stands at 3.6%, while inflation is above 8%.
So history, if not statistics, suggest a recession is on the way if it’s not already here. Aggressive interventions by the Fed to quell inflation, such as the current one now under way, have preceded every downturn since World War II.
This was underscored in the Fed’s recent monetary report to Congress, in which the central bank vowed an “unconditional” battle with inflation, an unusually hawkish comment from the Fed under current Chairman Jerome Powell.
A survey of economists released Sunday by the Wall Street Journal carried the following scary headline: “Recession Probability Soars as Inflation Worsens.” It gave the likelihood of a recession as 44% over the next 12 months.
Meanwhile, the stock market has lost trillions of dollars in value, with some indexes off by as much as a third. Such a decline, Fed studies show, cause households to reduce spending by roughly 4% for every dollar lost. So, as stock prices fall, it won’t just be millionaires that feel the pinch.
Each month, I&I/TIPP publishes timely and informative data from our polls on this topic and others of interest. TIPP’s reputation for excellence has come from being the most accurate pollster for the past five presidential elections.
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Terry Jones is an editor of Issues & Insights. His four decades of journalism experience include serving as national issues editor, economics editor, and editorial page editor for Investor’s Business Daily.
Biden has caused the rise in prices in America. He did it in at least three ways. But printing more money is not one of them. Or not directly as people are assuming. He did it first off by attacking the oil industry from day one. He shut down pipelines. He attacked the permitting process. And he did what he could to malign the oil industry as well as the natural gas industry that replaced coal and nuclear. Cheap oil and natural gas has been a boon to the economy. Goods were created cheaply and shipped cheaply. Plus consumers paid less at the pump and heating their homes. Even electricity which is largely made by natural gas has doubled in price making everything else more expensive. The price of energy is the largest contributor to smaller consumer pocketbooks and higher prices of goods.
Biden also did what he could to keep workers out of the work force and raise worker wages. Some of this is from the pandemic as foreign workers were forced home. Lots of Chinese, especially had to chose between America and China. Many of them went home to stay. So professional workers, especially in the tech sector have seen their wages sky-rocket. The people streaming across the border are not adding to the workforce in any meaningful way.
Very low interest rates have allowed companies to grow even without profits. And home buyers to afford homes at much higher prices while building materials prices and worker’s wages have made new homes very expensive to build. Governments have borrowed throwing fuel on the fire by building roads that are not needed and all sorts of business parks that will never be used. Yes there are bad roads. But those don’t seem to be the ones being rebuilt.
And lastly we are decoupling. Chinese goods are less cheap. Chinese companies are buying out North American food. Parts especially things like chips for cars are hard to get. Trump started this but much of it is still there under Biden. The tariffs are still there as they should be. And they are raising prices too.
Printing money has its own issues but it is not causing inflation. Look at Gold, Bitcoin, Yen, Euro, Yuan, in all those cases the dollar is as good or far better than when Trump was in office. Stores of wealth are all equal or worse than the dollar. But materials like oil and wood are in short supply. That’s not inflation from too much money supply. That is inflation from an economy that is demanding more resources than can be made. You take Russia and Ukraine out of the mix and prices for food and oil soar even higher.
When interest rates come back into effect, along with the higher wages and energy prices, you will see the economy slow. And that will bring down prices. At least for some.
“I am of the firm belief that approximately 1/3 of Americans a Communists....................”
There are idiots in my home town saying how great a job that Biden is doing.
Biden deserves the blame... and his goons.
Anyone who can do that to you can make you do anything, for example surrender yourself voluntarily to slavery or commit any atrocity.
This was George Orwell's warning (1984):
Even a complete idiot would know that driving up gas prices to make people go electric would cause widespread inflation across the board.
But no...Biden and the Democrats think their REALITY is different that ours. What concerns me the the total lack of effort the Democrats are doing to try to stop the price of gas and inflation, indeed they are doubling down and attempting to shut down more oil related pipelines, electrical generation and the price of natural gas also.
Its like they don’t care if they will lose the next election???
Fixed it for you
“It's so bad I called the suicide hotline. They put me on hold!’’. Rodney Dangerfield.
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