8.2% CPI Report: Political Class Feasts While America Fasts - The American Spectator | USA News and Politics
8.2% CPI Report: Political Class Feasts While America Fasts
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The consumer price index (CPI) rose 8.2 percent year-over-year in September. Fuel oil jumped 58 percent, new vehicles climbed 9 percent, and electricity spiked 16 percent. The guts of the Bureau of Labor Statistics report show why this round of inflation so troubles consumers. While some commuters can choose to walk instead of take the bus or drive the clunker instead of buy the showroom model, everybody needs to eat (though fasting seems a very good idea for some).

“The food at home index rose 13.0 percent over the last 12 months,” the bureau’s report explains. “The index for cereals and bakery products increased 16.2 percent over the year and the index for dairy and related products rose 15.9 percent. The remaining major grocery store food groups posted increases ranging from 9.0 percent (meats, poultry, fish, and eggs) to 15.7 percent (other food at home).”

Beyond this, the core CPI, which excludes food (and energy), reached a 40-year high. Everything — all 20 subitems on the main CPI report listed below the 8.2-percent overall number — jumped.

Members of the political class keep spending more money than they possess even though revenues set records for the just-ended fiscal year.

Remember this summer when President Joe Biden repeatedly touted “zero” inflation for July in order to disguise the fact that the annualized CPI had hit 8.5 percent? Well, the monthly rate, which sat way down in the credits before the president gave it top billing, reached 0.4 percent in September. One imagines that it again finds itself relegated to a supporting or even uncredited role.

Inflating the currency quickly alters behavior among every class of people save one.

Shoppers purchase turkey instead of roast beef at the deli counter and bulk-buy items to save. Drivers coast downhill, think twice about engaging in that accelerator-brake-accelerator dance favored by the impatient, comparison-shop at the pump, and wield loyalty cards when filling up. Many northerners start reaching for a sweater, blanket, or ax in the fall instead of the thermostat.

The one class that recalcitrantly refuses to change its ways in response to rising prices? The political class.

Members of this class keep spending more money than they possess even though revenues set records for the just-ended fiscal year. The Congressional Budget Office estimates that the 2022 deficit reached $1.4 trillion. Reaction generally focuses on the number’s essentially halving last year’s COVID-anomaly shortfall rather than highlights that 2022 likely measures up to be the third-highest red-ink number in history and just the seventh time that the deficit has exceeded $1 trillion. That $1.4-trillion deficit sent the debt past $31 trillion. (READ MORE from Daniel J. Flynn: Fed Tightens as It Refuses to Admit Its Loosening Caused Runaway Inflation)

Their spendthrift ways, as we penny-pinch, do not merely cause resentment. They cause central bankers to inflate the currency.

Congress’ gluttonous demand for money to spend floods the market with a supply of money that it pressures the Federal Reserve to create. The supply and demand of money, the component that makes up half of almost all economic transactions, matters more than the Saudis’ turning down the oil spicket, China’s shutting down its economy, or Russia’s invading Ukraine when it comes to U.S. inflation, which, after all, differs massively from Swiss inflation (3.3 percent) or Turkish inflation (83.5 percent). It differs massively because, though we all suffer from the same global economic pressures, the domestic decisions of appropriators and central bankers vary wildly from country to country. And it differs because money, as, again, usually half of every exchange, simply matters more in its effects on overall price pressure than the micro issues of this or that industry (including even petroleum).

Reckless fiscal policy requires reckless monetary policy. It needs cheap money to borrow and magically materializing money to spend. This in small part explains the federal-funds rate flirting with zero earlier this year and in large part explains the Federal Reserve’s balance sheet exploding from under $3.8 trillion in September 2019 to almost $9 trillion in March.

This imprudence resulted in the devaluation of the currency, which we imagine to be a problem on the asking end of the transaction rather than on the offering end. Sellers do not gouge buyers. Politicians and central bankers depleted the money of buyers, and sellers react accordingly.

Inflation naturally causes consumers to economize. That orientation comes unnaturally to politicians.

Daniel J. Flynn
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Daniel J. Flynn, a senior editor of The American Spectator, is the author of Cult City: Harvey Milk, Jim Jones, and 10 Days That Shook San Francisco (ISI Books, 2018), The War on Football (Regnery, 2013), Blue Collar Intellectuals (ISI Books, 2011), A Conservative History of the American Left (Crown Forum, 2008), Intellectual Morons (Crown Forum, 2004), and Why the Left Hates America (Prima Forum, 2002). His articles have appeared in the Los Angeles Times, Chicago Tribune, Boston Globe, New York Post, City Journal, National Review, and his own website, www.flynnfiles.com.   
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