EDITORIAL: Joe Biden, Democrats and the Misery Index
How much longer can the White House be wrong about inflation?
February 12, 2022 - 9:01 pm
It was only months ago that Democrats insisted that inflation worries were overblown and part of a GOP plot to sabotage President Joe Biden’s massive spending plans. Some White House media stenographers attempted to spin rising prices as a positive for Middle America.
“On the whole, inflation can actually be a good thing for many working-class Americans, especially those with fixed-rate debt like a 30-year mortgage,” Allison Morrow of CNN Business wrote in December. “That’s because wages are going up, which not only empowers workers but also gives them more money to pay down debt. Plus, in the case of a mortgage, your monthly payment will be the same but your house will increase in value.”
The progressives at The Intercept went further, ridiculing the concerns of average Americans about inflation, arguing that rising prices are a boon for debtors (the working class) but a bane for creditors (the rich).
It’s true that inflation lessens the real value of debt. But these arguments completely ignore the financial difficulties that higher prices impose on individuals and families on the front end. Without significant wage gains, the low-income are far more vulnerable to the pain of inflation because they tend to spend a higher percentage of their earnings on necessities.
Yet the Labor Department reported last week that the highest annual U.S. inflation rate in 40 years — 7.5 percent — was accompanied by a 1.7 percent decline in real wages. That spells hardship for many Americans. The Wall Street Journal reported Friday that a new economic analysis concludes “the average U.S. household is spending an additional $276 a month” thanks to higher prices “across a range of products and services, including cars, gasoline, furniture and groceries.”
Middle-class households were hit the hardest, according to the Moody’s Analytics survey, thanks in large part to higher transportation costs.
One might think this would be a priority for this administration, but the president isn’t acting like it. Mr. Biden remains in a state of denial about his own role in creating the problem, for one. Meanwhile, it’s doubtful many Americans could name a single concrete action that the White House has taken to address inflation — in fact, the president seems insistent on worsening matters by continuing to campaign for additional economic “stimulus” in the form of another spending spree. This has caught the attention of congressional Democrats, who realize the issue could cost them their jobs.
“It’s fair to say that we should be focused on addressing all the issues that matter to people,” Rep. Abigail Spanberger, a Virginia Democrat facing a tough re-election challenge, told CNN, “and certainly, the laundry list of concerns that people bring to me as a representative includes inflation.”
Some vulnerable Senate Democrats — including Nevada Sen. Catherine Cortez Masto, who is up for re-election this year — have become so desperate as to endorse a scheme to suspend the federal gasoline tax to help ease prices at the pump. This would be amusing if it weren’t so dishonest — Sen. Cortez Masto has supported every administration effort to hamstring the domestic energy industry. If she were really concerned about fighting inflation rather than self preservation, she’d follow the example of Sen. Joe Manchin and withdraw her support for any other inflationary progressive spending bills.
Americans who lived through the 1970s are familiar with the Misery Index, a measure that combines inflation and unemployment. In December, the index topped 11 percent for the first time in almost 15 years, not counting the early days of the pandemic. If Mr. Biden doesn’t soon come to terms with the fact that the progressive advocates of modern monetary theory — the idea that the nation can print and spend money without limit — are leading his administration into the ditch, his party will find itself dealing with its own Misery Index come November.