Nov 08, 2022
After four decades of low and stable inflation, prices in the US have risen by more than eight percent over the past year. This, without a doubt, is cause for concern.
The GOP has no idea about how to reduce inflation.
And there is something like a consensus that inflation--and the pain it's inflicting on "regular Americans"--is likely to cost the Democrats their majorities in the House and the Senate. Republicans--with lots of help from their mendacious media allies (and, also, lots of help from mainstream outlets that should know better) - have been focusing relentlessly on inflation and (by inappropriate conflation) on the "bad economy." Forbes declares that "The working class is at risk. They are at the mercy of rapidly rising costs." And the Guardian alerts us that "millions of Americans are currently working two or more jobs in order to make ends meet, as global inflation ... has sent prices of food, gas, housing, health insurance and other necessities soaring in the past year."
Note well: "Millions of Americans" have been "working two or more jobs in order to make ends meet" for decades. During four decades of low inflation, most Americans have been struggling, and many have been losing ground.
Polls suggest that the GOP has identified (or, perhaps, created) a hotspot. Polls show that "the economy" and "inflation" are among swing voters' main concerns. In a recent CNN poll, "71% of Republican likely voters called the economy and inflation their top issue, while 53% of independents and 27% of Democrats said the same." Not climate change. Not the shameless, violent, racist, GOP-facilitated attack on our democracy. Not the reactionary Supreme Court. Not the attack on women's right to control their bodies and their lives. Not racism or Islamophobia or transphobia or antisemitism. Not book banning and Republican efforts to make the study of our racist history illegal. Not the prospect of House and Senate committees chaired by Christian Nationalists. And not the prospect of the House and Senate being run by a party that has - relentlessly, and reliably for decades--done everything they can to enhance the well-being of their rich patrons, relentlessly and reliably at the expense of the overwhelming majority of US residents.
And, one wonders, what do voters imagine that Mitch McConnell, Kevin McCarthy, Herschel Walker, JD Vance, Marjorie Taylor Green, Mehmet Oz, Ron Johnson and Republican majorities are going to do about inflation?
In fact, the GOP has no idea about how to reduce inflation. But, this said, we know precisely what the Republicans will do. They'll do what they always do. They'll attack Social Security, Medicare and Medicaid. They'll allow the purchasing power of the minimum wage (which has lost a third of its value since 2010) to erode further. They'll work to make the appalling Trump tax cuts for corporations and the rich permanent. And they'll work to further liberate corporations to mistreat their workers, gauge their customers and pollute, and they'll block any and all efforts to save the planet from a climate disaster.
None of this has anything to do with inflation, of course. And all of it will in fact undermine the economic security and well-being of most Americans. This is what the GOP does, relentlessly and reliably. And as a response to inflation, GOP policies are a non sequitur. Republicans have no plan for how to address inflation, and Republicans have no intention of addressing the economic pain, uncertainty and insecurity that so many of us are feeling. Indeed, they are hellbent on making it worse.
In mid-July, Minority Leader Rep. Kevin McCarthy declared that "inflation is running rampant due in part to out-of-control spending from President Biden and Speaker Pelosi." The solution, as always, is to cut social benefits.
The reality is that this (relatively meager) burst of inflation is a global phenomenon, a surge that is all but out of the control of the leadership of either party. (A bit more on this below.) It is certainly beyond the GOP! But more importantly, the economic pain, uncertainty and insecurity being felt by most of us is not primarily about a one-year surge in inflation. It's about decades of economic policies that have been designed to enrich the rich and disempower working people. And it's worked.
All of this said, this recent surge in Inflation is a problem. But how? And for whom? It's tempting to conclude that inflation is a problem for everyone, in a relatively straightforward way. It is tempting to assume that rising prices for goods and services mean higher prices for consumers, leaving us all worse off.
But it's not that simple. Whenever someone pays a higher price, someone else receives a higher payment. Rising rents--to pick one especially important example--are a disaster for tenants, but landlords' incomes rise. Rising oil prices increase the cost of gasoline, home heating oil, and the transport of goods and services (and thus the price of nearly everything), but it fattens the profits of oil companies. Rising prices for consumer goods hurt consumers, but capitalists may well enjoy higher revenues and profits. People on fixed incomes lose, for sure. Borrowers, generally speaking, gain, as the real value of their debts declines. (Note well: if you have a fixed rate mortgage, inflation may will be "good news." If you are a banker, or you are sitting on a pile of cash, inflation is bad news.)
So, how can we minimize the economic "pain" caused by inflation? We could identify those who are on the losing end of inflation, and provide some relief. Over the past year, corporate profits--oil profits especially--have soared. Rents have soared. And the federal minimum wage--which has not increased since 2010--has eroded by about 8%.
If we are concerned about eroding wages, how about raising the minimum wage? Why not index the minimum wage to inflation. If we are worried about "rental inflation," we could devote our imaginations and our resources to making housing more affordable. For example, federal housing assistance for low-income families mostly comes from HUD's Housing Choice Voucher program (Section 8), which provides rental vouchers to low income families. At the risk of oversimplification, HUD requires families to pay 30% of their income toward their rent. The Feds pay the rest. The program is flawed, for sure, but it provides real and substantial relief to its beneficiaries. And when rents rise faster than income, the federal government pays more--and tenants are, to some degree, protected from inflation.
About 19 million US households are eligible for rental assistance from the Department of Housing and Urban Development. But just one in four eligible families gets a rental voucher. Why? Inadequate funding.
So, if we are concerned about protecting low income families from inflation, we could provide adequate funding for the Housing Voucher Program. Or we could vote for Herschel Walker, Ron Johnson, Marco Rubio and JD Vance, who will obediently vote to cut taxes for the rich, reduce the accountability of appallingly profitable corporations, and cut Social Security, Medicaid, and Medicare.
How would we pay for this? That's easy. Higher taxes on corporate profits. During this inflationary year, corporate profits have soared.
This is just one example. Poor and working people in the US are hurting, and they have been hurting for a long time. The first step in addressing this deep and essential problem is by prioritizing it explicitly. Who is hurting, and how can we change the rules of the game so that can enhance the opportunities and well being of those who have been left behind?
Universal health care would go a long way toward improving the well-being of millions of Americans. Eight percent inflation is a problem, for sure, but the gaping holes in our healthcare system is a way bigger problem. The list goes on.
GOP outrage about inflation--and the economic burden it lays on lower and middle-income families--is profoundly disingenuous. Inflation is merely a political opportunity. Low and middle-income families have been struggling for decades, while profits and the incomes of the rich have soared. And all of this has been facilitated by GOP policies: round after round of tax cuts for the rich, attacks unions, worker rights and the minimum wage; attacks Social Security, Medicare and Medicaid, and more.
The claim that inflation explains the deep economic insecurity of millions of Americans is seriously unpersuasive. And the claim that Republicans are concerned about the deep economic insecurity of millions of Americans is absolutely ridiculous. Squeezing the working class for the benefit of their rich patrons is, in fact, their mission.
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