Biden's Inflation Bamboozle

Tobacco smoke enema kit, and the origin of the phrase “blow smoke up your ass.”

Jake Blues, upon finding out that his brother had lied to him about keeping up with the rest of the band while he was in prison, accused Elwood of lying to him. Elwood retorted that "it wasn't lies, it was just... bullshit."

Those of a certain age and a deep memory might recall that, in the edited-for-TV version that was how things worked before cable, "bamboozle" was substituted for "bullshit." Farcical and ill-fitting though it was in that usage, it is nevertheless an alliterative gem in describing what our Dear Leader is telling us about the inflationary mess his spendthrift governance created.

From prepared remarks on November 27, 2023:

And wages for working families have gone up while inflation has come down 65 percent — giving families a little more money in their pockets and a little more breathing room this holiday season.

But we know the prices are still too high for too many things, that times are still too tough for too many families. But we’ve made progress, but we have more work to do.

Let me be clear: To any corporation that has not brought their prices back down — even as inflation has come down, even supply chains have been rebuilt — it’s time to stop the price gouging — giving the American consumer a break.

The first bamboozle: saying that "inflation has come down 65%." Inflation isn't an interest rate. It is an erosion of the dollar's buying power, and it's forever. The rate may have come down 65%, but the dollar's 20% loss in value since JoeB took office is still reality.

That 20% is gonzo. Decamped, disappeared, defunct, dissolved.

With apologies to Monty Python, it is passed on, no more, ceased to be, expired, bereft of existence, pushing up daisies, off the twig, kicked the bucket, shuffled off this mortal coil. It is ex-money.

Listen to what the great man, Milton Friedman, had to say about inflation.

The second bamboozle: that corporations can just bring their prices down because inflation rates have ebbed. As I just noted, that 20% bump is, barring the rare (and utterly anathema as far as politicians and statist economists are concerned) bits of deflation, permanent. A widget priced at ten bucks on 1/1/2021 and now selling for twelve bucks has not been jacked up in price. The medium of exchange we use to trade our goods and services for others' goods and services has been debased. If that widget was being sold at a 5% profit margin, i.e. the company makes fifty cents on its ten dollar price after expenses, its profit after inflation would, all things being equal, sixty cents. To cut the price back to ten dollars, the company would have to incur a dollar forty loss on every unit.

This is Economics 101.

The third bamboozle: that inflation is being driven by price gouging or supply chain issues. Go back and listen to the just-over-a-minute Milton Friedman clip. Friedman named and lamented a $50B budget deficit as the driver of inflation. Consider what he might say, were he alive today, about TWO TRILLION DOLLARS in deficit spending.

Patting yourself on the back is rarely a good look, especially if you are bullshitting or outright lying. It's also a dangerous bit of contortionism for most octogenarians, but Joe didn't bother actually trying to bend his arm back there.

National Review's Charlie Cooke recently opined that:

Once, we described members of the media as "reporters." Presently, "scriptwriters" might be more apt.

Given how much coverage I see talking about how the economy is doing great but people are still of the belief it's doing poorly, that substitution is spot on. The big lament, and one we've heard before, is that the administration is failing to sufficiently inform people how great they're doing. No matter that their lying eyes suggest differently.

The official inflation rate is, as I type this, 3.24%. The Fed's goal is to maintain inflation at 2%, so its efforts to tighten the money supply have achieved some success. The root cause, however, and I speak of amok deficit spending, hasn't gone away, with Biden's deceitfully named "Inflation Reduction Act" (a bamboozle of Brobdingnagian proportions) still flooding the nation with money that didn't previously exist. While I'm of the opinion that even 2% is thievery, the nearness of the current estimate to the target suggests that the Feds are likely to start loosening up some time next year. That it's an election year is, of course, purely coincidence. As is the fact that the inflation monster's return (unless spending is cut, which it won't be) will lag that loosening by long enough to give the illusion of a hot economy to the voters as they enter the voting booths.

Biden has demonstrated quite the penchant for bamboozling. His Irish roots have filled him full of blarney, if I may be permitted to colloquialize outside the bounds of my own ethnicity. When speaking to those motivated to find an excuse, any excuse, to continue supporting him, blarney works. The rest of us, who see that the dotard has no clothes, get to seethe in futility as he peddles his bullshit and as the lickspittles in the press regurgitate it all.

I cannot stress enough how much damage Biden's inflation has done to us. It's permanent damage, and even if the rate drops to the "ideal" 2% level, that damage remains.

If the widget I mentioned earlier was priced at ten dollars in 1933, the year we went off the gold standard, it would be priced at about two hundred forty dollars today. Your ten dollars today has the same buying power as forty-two cents in 1933. Inflation eats away at savings and at the value of the goods and services you've produced across your lifetime.

Inflation is a destroyer, and its emergence during the past few years is a direct result of Biden's rampant spending, not corporate "greed" or price gouging.

Argentina just elected a libertarian president, Javier Milei, who embraces the Austrian school of economics, in no small part because it is staggering under 150% annual inflation. He has spoken in favor of abolishing the central bank and cutting public-sector spending. Lovely ideas that I'd be totally on board with. As would Milton Friedman, who believed the Fed's Best-and-Brightest monetary management should be replaced with a computer program: "I have long favored for the USA a quasi-automatic monetary policy under which the quantity of money would grow at a steady rate of 4 or 5 per cent per year, month-in, month-out."

Friedman's idea will never happen, sad to say, because politicians would rather eat a fistful of lye-soaked carpet tacks than give up control of the money supply. So, the destroyer will continue to destroy, even as Biden and his ilk continue to blow smoke up our asses about how great things are.