Tag Archives: Inflation

Why Hasn’t She Done It?

By J Robert Smith

  • Sept. 13, 2024
  • 2-min read

It would have been so much better had Donald Trump’s closing remarks in last Tuesday’s presidential debate been his opening remarks. Why? Because Trump framed his fight against Harris powerfully. Asked the former president about Harris’ nearly four-year nonperformance: “Why hasn’t she done it?” That is, fix the problems she claims she’ll fix now – problems created by Biden-Harris.

Trump lost some traction coming out of Tuesday’s debate because, although Harris’ remarks came across as canned, she did succeed in making Trump the issue. Any election with an incumbent is supposed to be a referendum on the incumbent. That’s particularly true with Kamala Harris, who lacks the personal attributes to serve in the highest office, and as the “Harris” in the Biden-Harris administration is responsible for the woes that millions of Americans are experiencing – and will experience more deeply if Harris assumes the presidency.

The good news is that Trump has time to turn the tables. He needs to ask his question at every rally and in every interview he gives. His advertising needs to hammer away at it too. And it wouldn’t hurt to close this election with Regan’s memorable question: “Are you better off today than you were four years ago?”

Trump will be Trump, of course. He likes to riff. He tends to be too defensive, and spends more time explaining why he did what he did. But this election isn’t about Trump – or shouldn’t be. It’s about the struggles that tens of millions of working and middle-income wage earners are experiencing. It’s about Biden-Harris deliberately throwing open the southern borders to permit millions of illegals to enter. It’s about spreading crime. It’s about historic government and private sector corruption. It’s a bout the prospect of major war with Russia, China, or both. It’s about the future, which is shaky as hell thanks to Biden-Harris’ wretched leadership.

Trump, always the promoter and marketer, should brand merchandise and signs with “Harris: Why hasn’t she done it?” His ads should feature the question. Saturate it. And Trump should never leave a rally or interview having not asked that very potent question.

It’s a question that practically answers itself, and it’s a question Kamala Harris never wants asked.

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It Don’t Come Easy, Kamala

By J Robert Smith

  • Aug. 21, 2024
  • 1-min read

Forget about all the smog that corporate media is belching. Kamala Harris is still a ditz. Her sidekick, Tim Walz, is a progressive Minnesota Fats. He’s all about the hustle. He’s a guy who stole valor thinking he could trade it for a beer. The Kamala that we’ve come to know is being memory-holed — or so our hubristic betters hope. For them, like The Fly, something new is aborning. Spinning sell-able narratives depends first on the old Kamala disappearing.

Corporate media’s pollsters are hired to massage numbers as needed. Number massaging is crucial. Kamala vying with Trump in the polls — in fact, leading him by a tittle in this or that battleground state sample — is necessary to bolster whatever narratives her handlers confect. It’s self-reinforcing. Those tight polls also serve as mighty good cover when ballot-counting starts in garden spots like Philly and Detroit.

Blank slate Kamala can be filled-in as perky but not cackling. She’s a woman who bakes, not barks. She strained her widdle eyes studying the southern border for nearly four years, and now she’s got an idea: she’ll close it. She’ll eat Walz’s “white guy tacos” to be a good sport. She’s Florida from Good Times until the Indian vote matters, then she’ll flip to some Bollywood persona.


Read the article in its entirety at American Thinker.

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Why the End of the American Empire is Good for the Republic

This past weekend, the Ukrainians fired missiles at Russia. It’s not the first time. U.S. fingerprints are all over this attack, too. It was yet another provocation to war with Russia. A war with Russia wouldn’t be a limited affair, despite the conceits emanating from Washington. And it wouldn’t revolve around Ukraine’s future. It would center on the fate of the American empire.

The Biden administration is pushing brinkmanship with Russia. Of course, that’s a monumental gamble. Washington’s defense and foreign affairs establishment is trying to win through intimidation what Ukraine isn’t winning on battlefields, regardless tens of billions of dollars in U.S. aid and hands-on support. But brinkmanship with Russia opens the door to miscalculations. Triggering a conventional war between the world’s premier nuclear-armed powers risks escalation to nuclear conflict.

Whatever Washington’s reasoning, it’s best to remember that America was never intended to be an empire. It was created as a republic. It was never to roam the globe on moral crusades, which, too many times, were thin disguises for power acquisition and economic exploitation. Our military was for our defense, not a profit center for special interests. We were to have a government of the people, tending to laws that made our society civil and safe. Our government wasn’t supposed to “capture” commerce but referee it to ensure that the rules of the game were fair. Government has become incessantly profligate. We were to be a free, strong, and prosperous people minding our affairs.

Perhaps the end of empire will open the way to the return of the Republic?

Read the full article at American Thinker. Follow this link.

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We Know How to Predict Inflation

By Rob Meyne / Dr. Robert Scott

  • April 14, 2022
  • 2-min read

Any list of the greatest economists of the twentieth century will include Dr. Milton Friedman of the University of Chicago. He wrote a number of essential economic treatises, and Free to Choose, written with his wife Rose, was a bestseller. Very few people have made a greater impact on economic thought and policy. (1)

Friedman had a knack for putting complex factors like inflation in simple terms. Few economic factors have a greater impact on average Americans. Prices have increased dramatically in the past year as Americans feel the pain at the gas pump, in the grocery, housing, and more.

Politicians and pundits assign blame. Currently, the Biden Administration is referring to the “Putin price hike,” blaming the Soviet leader for domestic inflation, even though the great majority of the price hikes under Biden came long before the war in Ukraine.

Fortunately, we can look to Dr. Friedman for nonpartisan insight. He said: “Inflation is always and everywhere a monetary phenomenon.” (2) He made analysis of inflation easier by using the following equation:

    Inflation equals
  • Percentage of increase in the money supply
  • – MINUS –
  • Percentage of increase in real GDP

When Dr. Friedman was discussing inflation in the late 1970s, he said real GDP (output) historically grew at about 3% annually. The actual inflation adjusted figure, from 1947 to 2020, was 3.1% per year.

Professor Friedman observed the money supply had been increasing by 10% per year. With a 3% increase in output, his equation projected inflation would be about 7%. That was incredibly accurate; the actual rate was 6.8%! In other words, the equation works.

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President Biden is Blaming Everyone Else for Surging Inflation

Flyover

  • Jan. 12, 2022
  • 1-min read

This article appears at The Hill and can be read in its entirety there: The Hill.

“Americans paid more for everything this Christmas, from toys to turkeys. But this “Bah, humbug” reality didn’t start with the Christmas season. Only 1.4 percent when Joe Biden took the presidential oath last January, year-over-year inflation has come in at 5 percent or more for 7 consecutive months. We know inflation is a growing problem because President Biden has repeatedly gone out of his way to shift the blame away from his administration.

“Anyone who fills up at a gas pump, for example, knows what a big bite increasing gas prices are taking. President Biden blames higher energy prices on oil and gas producers. As reported in November: ‘In a letter to FTC chairman Lina Kahn, Biden claimed “there is mounting evidence of anti-consumer behavior by oil and gas companies.”

“Having pledged during the campaign to eliminate fossil fuels from our energy future, the president’s hostility to conventional energy was obvious on Inauguration Day. That was before he axed the Keystone XL pipeline and took no fewer than 24 other actions that raised energy prices. And yet, President Biden won’t fess up about the effect his policies have had on energy prices.”

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Anti-Intellectuals

By Dr. Robert Scott

  • Dec. 15, 2021
  • 2-min read

Especially as a young man, I enjoyed spending hours reading books and short stories written by Isaac Asimov. His writings were adventurous and scientifically (for the most part) possible. He was an endorser of technology that brought more jobs by the end of the 20th century than we had people at the beginning of the century. He appealed to the economist in me.

Asimov wrote (Newsweek, January 21, 1980; re-posted on Medium: “A Cult of Ignorance”) an article critical of people who considered college professors and other highly educated people to be elitists. Snobs. He cited a few examples of famous people who denigrated college professors. It seemed like a good point, especially to a young college professor.

Today, I hear disdain for those who are unvaccinated. They are described as “misinformed” or “ignorant.” They should follow the science. (Which apparently means they should follow Tony Fauci, who says “I am science.”) Yet, recent reports from the CDC showed about 30% of healthcare workers have not been vaccinated. This includes many doctors and nurses that logic says would have some knowledge of science (even if not of “Fauci-science”).

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The Inflationary Train Wreck Ahead

By Dr. Robert Scott

Economics has been called “the science of scarcity” and “the dismal science.” While a lot of my peers may take offense to that description, it is economists who are called on to analyze data, predict the future, and share our conclusions, however rosy or gloomy they may be.

Sometimes the information we have before us is so compelling there is only one way to interpret it. Today is such a time. As I look at key indicators, it is hard to escape the conclusion that we are headed toward some very dramatic events.

It reminds me of an incident experienced by my uncle, Bill Cook, back in the 1930’s. The images he shared were just as stark as the economic future that looms ahead today.

Bill Cook left Iowa for Reno, Nevada where he spent his life. He made a living as a railroad man. He was the engineer on freight trains; the huge ones that went on and on and fascinated me as a boy.

About twenty years ago he told me about a time he was involved in a massive train wreck. Another train, which came from behind his, was engineered by a man who had many years on passenger trains but very little experience with freight trains. The difference is huge. Freight cars typically carry many tons while passenger cars are comparatively light.

Lacking understanding of (and respect for) the care needed on a long downgrade, the passenger trainman went into it too fast. Realizing he needed to slow down, he made a fatal mistake. He slammed on his air brakes – an action that caused all the air pressure to be released. That left him with no braking power.

Bill could see the other train coming, so tried to pull his train off onto a siding. It rapidly became clear the collision was unavoidable. Try as he would to avoid it, the second train hit the back of his. Fortunately, for Bill, he was far enough forward that he was not injured. But the wreckage behind him was massive.

The men on the second train were doomed. Bill said it was impossible to imagine the sight of two 80-ton diesel engines colliding and being tossed into the air. The back of the first engine was almost vertical up against the front of the second, which was also almost vertical. Railroad car after car crashed. The remains of the engineer of the second train were gathered up in a shoe box.

Bill was later exonerated of any responsibility for the event; but he never forgot what he saw and the feeling of impending doom as he watched the unfolding of an unstoppable disaster.

When I watch the current economic situation, I have something like the feeling my uncle did.

As an economist, I am aware of a simple rule from one of the twentieth century’s great minds – Milton Freidman. Inflation tends to be the difference between the rate of growth of the money supply and the real (inflation adjusted) rate of growth of output. (For example, growing the money supply at a 5% rate, with GDP growing at a real rate of 3.5%, causes inflation of about 1.5%.)

Since about 1960, the money supply (called M2 by the Fed) has been increasing at a little less than 7% per year. Over that same period, inflation adjusted GDP has been increasing at about a 3% rate. Inflation over the same period has averaged about 3.7%. Given other influences (lesser) on inflation, that’s close enough for me.

In the last 18 months, the money supply has been increased by about 31%. That’s more than 20% per year! The fastest GDP (adjusted for inflation) grew since 1960 is 7.2%. If we hit that high mark again (and that is very unlikely), inflation would be about 13%!

That’s not the worst of it. Over the long-term, interest rates tend to run about 3% more than the rate of inflation. You do the math. Extremely high interest rates bring the train wreck of falling housing values and downward pressure on stock values (the basis of a huge amount of retirement funds). The inflation train is on the downhill side of the mountain. You can see the collision coming – but it may already be too late to get off the tracks!

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The Inflation Bombs are Falling


By J Robert Smith

  • May 4, 2021
  • 4 min read

Here’s the line coming from the very big brains out of DC and Wall Street: Inflation worries are… inflated. The economy is rebounding – in fact, beginning to surge (thanks to former President Donald Trump’s economic recovery policies, but don’t expect the establishment to give him any props). Hence, with demand climbing, supply chains are being hard-pressed. Higher demand + crimped supply = higher costs. But, no worries, that’s only a short-term phenomenon. Once supply catches up to – or exceeds – demand, costs will level off and decline.

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