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Democrats need to admit that inflation is a reality-otherwise voters turn them on | Andrew Gothorpe

MeInflation is rapidly becoming a problem for Democrats and President Joe Biden. They need to figure it out before it jeopardizes their broader agenda and sinks their chances of maintaining parliamentary control in next year’s midterm elections. One thing is certain when they think about how to deal with it: what they’ve done so far doesn’t work. In a recent poll, Two-thirds Many Americans disagree with Biden’s treatment of inflation, and the same number considers this issue “very important” in his assessment of his presidency. Of the Americans concerned about economic conditions, nearly 9 out of 10 ranked because of inflation. Obviously something needs to change.

But inflation, a complex product of economics and group psychology, is also devilishly difficult to understand and even more difficult to control. The president has few tools to tame it, and what they have can backfire. Inflation in the 1970s crippled Gerald Ford’s presidency and did the same until Jimmy Carter chose extreme treatments. He set up the chair of the Federal Reserve System, dramatically raised interest rates, stopped inflation, and put the economy in a serious recession. Handed the White House to Ronald Reagan. These experiences left inflation with a reputation as a presidential murderer, and either the disease itself or the medications taken to combat it eventually killed the patient.

Nonetheless, the Democratic elite are taking time to take the latest inflation seriously.American policymakers didn’t have to deal with such high levels of inflation 30 years,It will be displayed. Many have stuck to the message that inflation is “temporary.” This is a temporary result of the economy returning to high gear when the country emerged from the coronavirus pandemic. Some liberals have denounced warnings about rising prices, characterizing their concerns as an attempt to undermine support for Democratic plans to spend more on promoting social welfare and combating climate change. I am.

Whatever the economic benefits of the debate, and many economists still expect inflation to begin to decline soon, this reaction is politically toxic. Democratic Party The risk that many Americans do not seem to touch on the issue of serious concern. To change the tack, they need to tell voters that they are feeling their pain and that they are fighting to make things better.

There are already signs that Democrats below the president are starting to get it. Biden recently made a speech on this topic and announced that it would release 50 million barrels of oil from its strategic petroleum reserves in the United States. This is an attempt to reduce the gas price of pumps. He also pointed to oil companies by charging consumers high, even though wholesale oil prices have fallen in the past few weeks.

But the Democrats also have to do more to point their finger at the companies that are driving the problem.The Wall Street Journal Report Companies in many different sectors are using this inflation surge as a cover to show that they are raising prices faster than costs. Nearly two out of three US listed companies have higher profit margins this year than they did in 2019, according to the report. Inflation may hurt consumers, but it’s a boom year for US companies.

Democrats need to use all government tools to emphasize and fight these abuses. As Biden has discovered, public anger at inflation tends to be directed at the incumbent president, and the only way to survive may be to turn it towards a better goal. The president’s bully Palpit can be used to highlight corporate abuse, regulatory investigations, and more. Already announced FTC’s entry into the oil and gas sector allows the industry to explain and counter potentially illegal practices. Also, Democrats should not stop there. They control both parliaments and should consider holding a parliamentary inquiry to name and embarrass the particularly terrible price cuts.

Whether any of these measures actually help lower prices is an open question. But the only responsibility is to give it a try. A company’s inflation risks initiating an inflationary spiral where the first reason for inflation is secondary to the general eating frenzy, and everything that can be done to discourage it is sound. Government measures can also help weaken consumer expectations for future inflation, which will reduce the risk of spirals. Reassurance remains important even after prices begin to stabilize, as the media story is driven by inflation that has already taken place.

But even if you shouldn’t really hold your breath on these actions to slow down the rate of price increases, leadership on this issue simply because it’s what the worried voters want and deserve. It is important to show. It’s wise politics to appear to be pointing at those who act and blame, especially if this bout of inflation proves to be temporary and prices begin to fall next year. ..

Meanwhile, corporate America Must decide If it really wants to undermine Democrats and risk returning economic stewardship to Donald Trump’s party. Self-control may be a better option as modern Republicans are becoming more and more incompetent and ignorant. Democrats should strive to alert price-cutting vendors, so lower profits now will help everyone in the future.

Democrats need to admit that inflation is a reality-otherwise voters turn them on | Andrew Gothorpe

Source link Democrats need to admit that inflation is a reality-otherwise voters turn them on | Andrew Gothorpe

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