When Will They Ever Learn

Inflation is the destroyer of the middle class. That includes older people on fixed incomes. With inflation, suddenly the upper middle class can  no longer afford the simple pleasures of going out to eat or joining their grandchildren for a few days at Disney World. For the working trade middle class it is much worse. They mo longer can afford to buy the food they need or put gas in their car. They may even become behind in their rent. Not even $15 an hour will do when the “rent is too damn high!”

Inflation was caused by the Biden Administration. It shut down the economy when COVID hit. Yet, it  handed out small sums of money to the workers who the government threw out of work.

So people still “bought stuff” but, due to the economic shutdown, no new stuff was being made.Goods all along the supply chain  became scarce resulting in prices rising. This was inflation.

But, to make things worse, after COVID subsided, the government went on a $1.7 Trillion spending spree. This exacerbated inflation much more.

And the middle class suffered more.

There are 3 ways to eliminate inflation. This is because inflation is simply caused by too much money chasing too few goods. To cure it, the nation must put the money supply and the demand for goods back into balance. Too often the middle class suffers. But it does not have to be.

I inflation can be cured 3 ways. It can be cured by either by using either one of two types of fiscal (government) policies or a single form of monetary policy utilizing the federal reserve.

In fighting the Jimmy Carter inflation, Ronald Reagan and his economic advisor Art Laffer knew how to do the job without hurting the middle class. And when they did it, Reagan was re-elected winning 49 of 50 states. He was the best friend the middle class ever had.

The equation was simple. Money supply = production. Where this is true, there is no inflation.

Where the equation was not true, Reagan and Laffer knew the solution. Fiscal policy, not monetary policy, was the answer. Balance the high money supply by creating more production. Never lower the money supply to bring production down.

If the economy had too much money chasing too few goods, increase the amount of goods. This will lower prices and rebalance the economy.

But the Biden Administration rejected “supply side” fiscal policy. The manufacture of more goods which would also bring with it an expansion of energy production was not compatible with the fight against global warming.Biden and his “ green new deal” proponents wanted the middle class to have less… fewer air conditioners, no gas stoves, higher petroleum prices. For them, squeezing  the middle  class was a good thing. Inflation was just the cost of saving the planet.

On the other side of the equation., lowering money supply, fiscal policy could also be employed. We could lower federal borrowing and spending.That would hurt the middle class much more than supply side expansion, but the pain would be limited to the reduction of the government work force. Most of the private sector middle class would still be better off.

Yet, the Biden administration rejected that fiscal policy, too. Reducing even the modest federal spending and borrowing cuts proposed by Republicans in the Hose of Representatives was summarily dismissed.

So, the only remedy left was the third remedy, monetary policy. That is done by the Federal Reserve raising interest rates. The problem is that the target of monetary policy is the middle class. It concentrates on reducing the money supply by  what they call “softening the labor market”. In  other words, it throws millions of private sector workers  out of work to raise the supply of unemployed workers. This softens demand for higher wages and even lowers wages. By raising the price of borrowing, fewer houses are built, fewer factories are expanded . Fewer  workers are needed to produce the goods and services the economy once demanded.

More people out of work… fewer dollars are placed into the economy. Given a stagnant economy producing the same amount of goods and services, fewer dollars are created to buy “stuff.” Less demand means lower prices.

But, that also means that fewer people can afford to buy the goods and services they once enjoyed. The middle class will bears the majority of that suffering. Fewer jobs, less money to buy stuff means that people will just be poorer. The  reduced price won’t matter. The unemployed middle class can’t afford it anyway.

Such monetary policy alone  forces the middle class workers,  almost alone, to pay for the irresponsible monetary excess of Joe Biden.

Obviously this all means  that the  greatest enemy of  middle class workers is “ lunch bucket Joe.” He  claims to be their friend. In reality, his monetary policy and inflation are just a tax on the middle class. But most voters will not know that.

Firstly, most of the news media will not tell them, But, more importantly, neither will the Republicans.

The “ loyal opposition” seems consumed with foreign wars, Hunter Biden and corporate tax cuts. While these may be important, most of America doesn’t care. “ It’s the economy, stupid!” And it will always be so.

Ronald Reagan, a former union President himself, was as at home as much on the factory floor as he was on the country club ballroom. All workers, union and non-union, want the same thing… a decent wage to create a decent living.He spoke directly to the worker, not the union boss. He talked to the shopkeeper and the church congregation. Today, too many Republicans just won’t do that or do not know how.

The Democrats have abandoned the middle class while taxing them indirectly with inflation. But too many Republicans are too “ stuck up” to go woo those who the Democrats abandoned. Republicans need to connect with the naturally conservative middle class. They need to learn from Ronald Reagan if they are ever to become the majority.OtherwiseBud Light sales will rise and the middle class will vote for Democrats forever.