“No President wants to be compared to Richard Nixon. But Joe Biden is in danger of emulating Mr. Nixon”– Paul Ebeling
People are concerned he will be in a scandal worse than Watergate, and that he set the stage for a devastating inflation like Mr. Nixon put in motion in the 1970s.
Note: Some of us already have learned that like Mr. Nixon, Mr. Biden is roaming the White House in the wee hours in his bathrobe.
The latest Biden Bomb
Hourly wages rose 3.6% this June from last, but inflation has ostensibly delivered a nearly 2% pay cut, the Bureau of Labor Statistics reported.
The June wage increase to an average of $30.40 is the largest since 2009, the Economic Policy Institute reported, but 5.6% inflation in the consumer price index has put a negative drag on “real wages,” a figure that measures income while accounting for the cost of goods and services.
The staples of American life are increasing exponentially meaning higher prices for gasoline, laundry, airfare, moving costs, hotels, bacon and TVs.
Many economists agree with congressional Republicans who denounce the ills of inflation as the Biden administration and a Democrat-controlled Congress seek to pass massive spending packages to bolster infrastructure and social programs, and progressive Democrats in Congress propose to reduce the nation’s reliance on fossil fuels under the Green New Deal.
“If prices are growing faster than wages, then people are getting inflation-adjusted pay cuts,” American Enterprise Institute economist Michael Strain said. “Ultimately, this varies dramatically for every individual.”
At 5.6%, inflation is the highest it has been since August 2008, right before the Great Recession.
“Inflation is a tax,” Moody’s Investors Service Vice President said today. “That’s the best way to think about it.”
The impact is felt most by the lowest-earning workers, who struggle to buy the everyday items that are now more expensive and have less income to cover the rising cost.
Some households are not hit with the CPI inflation if they are not buying the items that rose the most, such as used vehicles and gasoline, which have risen 45% since last June, according to the report.
“They’re trying to minimize the evils, but they’re both evils,” University of Chicago economics professor Casey Mulligan, an adviser in The Trump Administration, told us.
Food prices are up just 2.4%, though, and are covered by the average wage increase.
LTN economist Bruce WD Barren warns the wage increases might be a result of a number of pandemic-caused layoffs for lower-wage workers, but as people go off unemployment as the $300 weekly benefit bonus expires and employers hire lower-wage earners back at higher pay, wages could continue to go up over the long haul.
The composition of the workforce ”is especially changing during downturns and recoveries, so one has to be careful about interpreting these data,” Mr. Barren added.
He went on to say, “Where inflation hurts the middle, and especially the lower income workers is in such basics as food, energy and housing costs – all of which are increasing faster than real wages.. So, American get ready for lower real wages for corporate American will be a reality in the short term. American businesses will not pass along their added profits without first recovering their losses incurred during the Pandemic.
“Remember, inflation is always a by-product of uncontrollable Federal pork-barrel, deficit spending. Yes, the reality of Washington today. The real question is when will the current Washington elite learn this basic fundamental principle in economics. So, America get prepared for the buying power of our wages will be in a downward spiral, at lest during this President Period.“.
Inflation is not going to be transitory we have a long list of companies that have announced price increases, that have told us they expect further price increases, and that they expect them to hold.
But wage increases tend to be more permanent than inflation pressures, as we typically do not give people wage cuts
In that sense, it is a Big Biden Bomb!
Have a prosperous day, Keep the Faith!