The headlines are screaming that inflation is here to stay. Consumer prices have risen an average of 6.2% over the past year, the biggest increase since 1991. Although Americans are supposedly – in the words of the New York Times – “full of money and jobs â, they are also deeply unhappy with the state of the economy.
It’s no wonder Republicans are elated and draw a line between inflation, public anxiety about the economy, and Joe Biden’s presidency.
What is surprising is that President Biden himself is helping them by citing his administration’s success in putting more money in people’s pockets as part of the explanation for the current surge in inflation. In a Nov. 10 speech, Biden said, “You all got checks for $ 1,400. You got checks for a whole range of things,” and with the patience of an academic teaching an economics course 101, he went on to explain, âWell, with more people with money buying products and less products to buy, what’s going on?â¦ The prices are going up.
The New York Post, a conservative-leaning newspaper, jumped on the speech, saying the president “concedes his COVID stimulus controls fueled [the] peak inflation.
The newspaper played down Biden’s claim that “The supply chain is the reason.” In fact, the President has led his audience through a fairly clear explanation of how the globalization of the economy works, has artificially lowered the cost of goods for decades, and is vulnerable to disruptions such as that caused by the COVID pandemic. -19.
Biden said: âProducts like smartphones often bring together pieces from France, Italy; chips from the Netherlands; New York State touch screens; camera components from Japan, a supply chain that spans dozens of countries.
He then concluded, âIt’s just the nature of a modern economy – the global economy,â as if the massive network of consumer product manufacturing was a natural fact rather than a systematically deregulated system designed by corporations. multinationals to minimize the cost of materials and labor. and maximize their profits.
Recall that this was precisely what the anti-globalization movements of the 1990s protested. According to a 2007 essay by Mark Engler, among the demonstrators were “trade unionists, environmentalists, anarchists, land rights and indigenous rights activists, human rights and sustainable development organizations, privatization opponents and anti-sweatshop activists âaround the world. who asserted that “corporate globalization policies have exacerbated global poverty and increased inequality”.
When Biden explained in his speech that it was necessary to “use wood from Brazil, graphite from India before it was assembled in a factory in the United States to get a pencil,” he did not disclose. that the pencil makers were getting wood from Brazil because they could rely on illegal logging from the Amazon that drives down the price of wood. He also did not mention that the cost of transporting goods to remote areas of the globe generates massive carbon pollution that is causing climate change.
Rather than blame globalization for inflation, he concluded that it is simply “the nature of a modern economy” that we rely on. Most of the media also missed this connection. Instead, there is the blame on the increasingly rare instances where the US government makes sure people have enough money to live on.
Why are Americans so upset with the state of the economy? Apparently, according to Bloomberg’s Ramesh Ponnuru, this is a âfrequently recurringâ pattern whereby when wages go up there is widespread pessimism. He rightly points out that “wages and benefits have risen in a smart way, but only in nominal terms” and that “the positive trends should continue before people start to be satisfied”.
Go back to polls conducted even before the pandemic (like this one in 2018, and this one in 2019) and one can find widespread unease about the state of the economy. In other words, Americans have spent decades being disillusioned with the continued suppression of wages and the trend towards increasingly precarious jobs in the so-called âgig economyâ.
Perhaps this is the reason record numbers of people continue to quit despite their desperation over the economy. The latest Bureau of Labor Statistics report found that a record 4.4 million workers quit their jobs in September alone, continuing a trend from August.
In addition to workers looking for better paying jobs, the Washington Post found that the tendency to quit is also linked to “problems finding child care.”
But if conservative Republicans are successful, you’ll see claims that Americans are deeply unhappy that the government is spending money on them and that child care subsidies and stimulus checks are the root of the gloom. mass – all ready-made talking points to win back political power in the next electoral cycle in order to contain spending.
This type of conservative message includes claims that Biden “doesn’t understand how inflation is hurting Americans” and “[i]If Congressional Democrats don’t stop Biden and Pelosi’s plan, many Americans won’t be able to pay their heating bills this winter, âas a Tory Growth Club ad aimed at House Democrats reads vulnerable.
Conservative Democratic Senator Joe Manchin of West Virginia makes similar connections to justify his rejection of Biden’s proposals to expand government aid.
The response of Liberal Democrats to the current economic crisis is little better, either advising people to wait for inflation or claiming that demand for better wages is fueling inflation.
Larry Summers, former economic adviser to the Obama administration, wrote earlier this year that “Higher minimum wages, stronger unions, increased benefits and stronger regulations are all desirable, but they also increase costs and company prices â. Summers echoed a Republican claim that unemployment benefits were bad for the economy, saying: “Unemployment benefits that allow workers to earn more by not working than by working should surely be allowed to be paid. exhaust in September “.
The dominant message addressed to Americans by political elites from all walks of life is the same one Biden put forth in his speech: “This is just the nature of a modern economy,” and we have to face it.
A better conclusion from our current economic situation is that there is nothing natural in being at the mercy and whims of an economy designed by corporate profiteers for corporate profiteers.
Independent Media Institute
This article was produced by The economy for all, a project of the Independent Media Institute.