Inflation, Bad Money And The Demise Of Middle Class Prosperity, Part 1

The one unassailable truth about current economics is that main street has taken it on the chin during the last few decades of Uniparty rule in Washington. So it is not surprising that Sleepy Joe’s press secretary, Karine Jean-Pierre, attempted to turn a sow’s ear into a silk purse yesterday by falsely claiming Biden has brought relief from inflation:

 “…. prices are going down…families are seeing lower prices on everyday items from gas to groceries.”

Well, not exactly. Compared to January 2021, gas prices are up by 45% and grocery store prices have risen by 20%. And that’s not the half of it—countless everyday items have risen by equivalent amounts in less than four years:

CPI Component Change Since January 2021:

• Household rents (brown): +18%.

• Grocery items (green): +20%.

• Airfares (black): +21.

• Used cars (blue): +23%.

• Electric utilities (orange): +24%.

• Vehicle maintenance and repair (purple): +27%.

• Gasoline (yellow): +45%.

Increase In Major CPI components, January 2021 to October 2023

Needless to say, shrinking household purchasing power is not unique to Sleepy Joe’s tenure. Just since the turn of the century, the purchasing power of the dollar has been reduced by 45% cumulatively during the tenure of four different Uniparty presidents. This purchasing power loss amounted to 2.7% per annum under George Bush, 1.7% per annum under Obama, 1.9% under Trump and 4.2% under Biden to date.

To be sure, the underlying culprit is the Federal Reserve. During this 23-year period its balance sheet has soared from $590 billion to a recent peak of $9 trillion. That computes to a money-printing rate of 13.1% per annum—an out-of-this-world figure that is self-evidently incompatible with non-inflationary prosperity and constitutes an affront to every historical notion of sound money.