Jeffrey Lord, American Spectator:
Obamaflation has arrived, and this is what it looks like.
Milk. A gallon of skim. At the local Giant in Central Pennsylvania:
January 11, 2011: $3.20
February 28, 2011: $3.24
March 6, 2011: $3.34
April 23. 2011: $3.48That would be a 28 cent rise in a mere 102 days, from January to April of this year. The third year of the Obama misadventure.
Then there’s the celery. Same sized bag. Same store.
January 11, 2011: $1.99 a bag.
March 6, 2011: $2.49 a bag.A rise of 50 cents in 54 days.
And the gas price during the administration filled with those who think “drill baby drill” is so yesterday? As one Internet photo had it, the numbers for regular, premium. and diesel were replaced with “LOL,” “OMG,” and “WTF!” Thus be it to governments who seem not to understand that energy is what makes the economic engine — and your car — hum.
What does this mean? It means Barack Obama is not going to be re-elected president of the United States. Period.
[…]
IT IS WORTH GOING BACK to that telltale 1980 election to understand what’s happening.
Then, as now, a Democrat had carried Pennsylvania four years earlier. Jimmy Carter’s margin was shy of 3 points, not Obama’s 10. But liberal Republicans were aghast at the idea of nominating Ronald Reagan, once again insisting only a moderate could carry the state — as they insisted when picking Ford over Reagan in 1976, Ford going on to lose the state. Reagan even lost the Pennsylvania primary’s popular votes to George H.W. Bush in April of 1980 — although a better Reagan organization delivered the majority of elected delegates district by district.
After Reagan was nominated, the media insisted this was going to be a close race and that Carter was ahead, both around the country and in Pennsylvania.
They were absolutely, totally dead wrong.
Reagan trounced Carter in Pennsylvania by over 7 points — and nationally, in a three-way race no less — by 10. Reagan carried 44 states.
But why?
A thousand years ago the Sung Dynasty of China was the first to discover the problem that printing money at the will of the leader can effectively be an economic drug — and the dynasty overdosed. Followed by the Yuan dynasty and another overdose — the same results obtained. Time after time since then — whether the French Revolution choking to death in a flood of assignats or the German Weimar Republic doing the same in marks or (China again) Mao’s losing opponent Chiang K’ai-shek wiping out the middle class in 1949 or Jimmy Carter’s administration committing economic chaos with the dollar in the late 1970s — the principle is the same.
Too much money, as the economists say, chasing too few goods.
[…]
Paying an increase of 28 cents for a gallon of milk inside of less than four months? This is the language understood by average Americans too busy with daily life to pay much in the way of attention to the economists, journalists, and politicians. But 20 million a week are paying attention to Rush Limbaugh because Rush understood exactly what was going to happen if Obama got his way with Obamanomics. “I hope he fails” he said at the time… and he said it, to much flack, because he knew this was exactly where America would end up with Obama doing exactly what he has now, in fact, done. Rush was right. As is Bob Tyrrell.
Now, to borrow a phrase, the chicken — Obamaflation — is coming home to roost. Right there in the dairy section of grocery stores all across Pennsylvania. In November of 1980, voters buying milk, gas, and anything else were staring at an inflation rate of over 12 per cent. The election the media had insisted Carter was winning was called within minutes that night, as Ronald Reagan steamrolled over Jimmy Carter before he even literally got out of the shower at his California home to start the evening.
That would be the same Jimmy Carter who had managed to use the same principles of government as Barack Obama — Obama thus securing precisely the same results as Carter.
Which is to say, there are now a lot of increasingly angry Pennsylvanians who are making the direct connection between Obamanomics and the arrival of Obamaflation — the price of their milk and gas. Just as the Pennsylvanians of 1980 made the same connection with the same policies to Carter.
WHAT SEEMS TO HAVE LEFT Obama strategists clueless is the fundamental historical fact that inflation comes slowly. Milk today, celery tomorrow, and gas almost every day. Then, too late, there’s a collective gasp of recognition by Americans walking around the grocery store that it’s no longer just the milk and the celery but the soup, the chicken, the hamburger and perhaps now critically — the Excedrin. Don’t forget the rent, either. The shock of realization dawns that somehow the patient — America — is suddenly in dire economic health and the only way out is a brutally painful form of political surgery.
It is such moments that elect a Ronald Reagan in 1980. And more to the point, over time casts an air of economic incompetence over liberalism that takes two or three back-to-back GOP presidential terms to shake. At which point Americans discovering the rise of milk prices remember the old lesson all over again — or if younger, learn it for the first time.
[…]
As with Jimmy Carter’s bleak ending in a politically suicidal witches brew of inflation, high unemployment and soaring interest rates, defiant righteousness appears to be preferable for Obama and company in facing the spreading economic conflagration already showing up in supermarkets across the country in places like the dairy and fresh vegetables sections of my local Giant.
Which in turn goes straight to the issue of Barack Obama’s re-electability.
The hard political reality is that the real election here is who will be the next Republican president of the United States. Because the rest of this election is already over.
All of this, unfortunately, recalls an electorate far more sentient and far less systemically indoctrinated by years of leftward movement on our political spectrum as a whole. Which makes the conclusion drawn by Lord overly confident.
I think Americans are starting to wake up, yes. And I believe many of them will see through Dem attempts to demagogue the results of their own policies, shifting blame on to producers and employers and tax payers.
But a billion dollar propaganda effort — which doesn’t even include the invaluable (and free) efforts of a mainstream press — could still succeed in shifting the focus off of Obama’s failures and onto, say, Michelle Bachmann’s crazy eyes, or Sarah Palin’s extremist vagina or some such.
One truth remains: if Obama wins in 2012, this country as we know it is over.
The left knows this, as well. And the want it it to happen. So they will be pulling out all the stops.
We can’t afford to play coy. Our attacks must be principled and fully frontal. Transparent, open, honest, and passionate. We don’t need to triangulate, or look for coalitions of voters: we have to rely on selling our own principles, because they are the principles of this country, and frankly, if we can’t sell them then we don’t deserve to win, and this country is finished, anyway.
Today we have a perfect opportunity to draw bright-line distinctions between what are two competing visions of America. Too many voters have long given up on politics, concluding (largely correctly) that, at base, both establishment parties were roughly the same. But the Dems have lurched leftward, and the Tea Partiers are taking the GOP back to conservatism, meaning now, at last, we should be able to convince an electorate suffering under the managed destruction of a classical liberal society that the time has come to chose between liberty and capitalism, or big government social democracy.
The choice is here. It’s here and it’s clear.
Get used to it.
And the myth that the only way to have enough money is to print the crap dies.
Four people (or ten or a million), all traders, institute a system of verifiable, hard, divisible units of value that float only on supply and demand, whatever those units may be. Each trader produces, thereby building wealth.
Enter bankers and honest, representative notes of trade, the principles they represent residing in secure account reserves. Enter interest, repaid by labor by increasing the units of hard trade value.
So far the system works and is sustainable.
Now consider the fiat/fractional system. Enter bankers creating notes without backing — progressive banking is born. New, unbacked money begins to enter the market, “stimulating” it by reserve banking. At once the increasing money supply raises prices.
Institute a Federal Reserve, a semi-private corporation. Institute a central policy whereby a bank can create and lend nine new unbacked notes* for each note on deposit, each bearing interest. Outlaw all notes but these federal notes thereby closing the system and pushing interest generation outside the principle balance of notes.
Now how many generations are we from honest trade? How many false booms has this constant inflationary pressure — this massive surplus of money and perpetually outstanding interest — created, together with exponential monetary behavior?
It’s this system we face now, it having in effect stolen some $250T in the US from the future to pay for itself through 2010.
The idea that the only way to “have enough money” to
blow never-ending bubblespower an economy is to debase that economy’s currency to four percent of its original value is faulty.*as I recall.
Jerry Pournelle via Glenn Reynolds:
I’m at least partially dubious.
After all, it’s not especially Obama’s fault that 2% of the world oil supply is offline (Libya), and thus gasoline prices are up 20% to reduce demand accordingly (combined with rising worldwide demand).
20% increase in fuel prices will increase a lot of goods in price – but it won’t be monetary policy inflation, which is the kind that’s actually really worrisome.
(And I’m really unsure about a two-month rise in celery prices when he’s not telling me how that’s different from year over year seasonal changes. By which I mean, produce prices change over the year naturally as crops come in and out of season; it’d be a lot more compelling if he showed that this change was unusual for Jan-March.
See here (pdf) for some historical data. Note how volatile celery prices are – it’s almost like they’re some sort of crop that might be sensitive to growing conditions or something.
These guys blame transit costs at the moment, which, again seems reasonable.)
(Though, he deserves some energy price blame for giving Congress political cover for not allowing drilling and exploration – precious little of that is directly in his power, though.
That’s much more long-term stuff, however.)
Jeff, spot on. And I agree, people have not yet made the connection of inflation and Obama (although they are certainly getting the inflation part every time they visit a gas station or supermarket). About the only thing anti inflationary is the housing market. That message, that Obama and the Democrats are causing the recovery to stall and inflation to take off, has to be hammered home every day till Novmember 2012. Or we are fucked.
Sigivald, the last time I looked, the EPA was part of the Executive Branch. You know, the EPA that’s blocking new drilling and shutting down existing drilling all over the country?
Barack owns this — ALL of it.
Corporations have been trying to hide inflation through smaller package sizes.
Kind of hard to disguise a smaller gallon of milk.
I’ve seen some stuff trying to claim corporations are complicit in hiding inflation, companies are trying to scam the American public, etc.
I think companies were caught between raising prices on people who really can’t afford higher prices or quietly reducing quantities so prices remain stable.
As a side note, reduced package quantity/size has been going on for at least 2 years. However, MSM finally caught on a month ago or so. At least, that was my take when I spotted an article on msn.com about reduced quantity in packages.
Sigivald is full of it. Transit costs? Exactly what are transit costs… oh, yeah, trucking and transportation.. which, unless they run on unicorn farts, are directly related to the inflationary aspects of gasoline.
As to the nominal vagaries of celery prices year over year and this could just be a blip in celery pricing… more bullshit. Coke was 2/4.99 per twelve pack in 08 and now it is 2/6.99 for the same twelve packs. Precisely what cost has increased in the cost of coke other than transit costs? Coke is freakin 90+ percent water and bottling is automated. Assuming a labor increase of 10% (generous ain’t I) YOY and there is an awful lot of price increase not accounted for in the new price on the shelf unless you figure that transit costs ie gasoline and diesel are the culprits. Ocare doesn’t even enter into these calculations as McDs got waivers…
As to the pricing on shelves… everyone who knows how to shop has known that inflation is huge and growing since at least 07 cause the unit price (which is what you should be comparing) has been exploding. Anyone who shops and looks at the price per package is an idiot.
Stephanie, I’m sure Coke has seen an increase in input costs, such as corn syrup.
Ethanol subsidies, oil prices and a weakening dollar are shooting corn prices through the roof.
I too believe that a serious bout of inflation is on the way if not already here, but be careful about lining up all your ducks behind data that is easily cherry picked. Fluctuations in produce especially, but generally everything available at your local supermarket, are not unusual even in the best of times. Just monitor the weekly sales papaers, for instance. Careful selection of those prices can yield some very false and silly results. Two data points, or even four data points with different time variances do not a fair analysis make.
You’ll know the shit has hit the fan when the specials and promotional deals you used to see on your favorite items start to disappear. Just like all those super-low rate loans and balance transfers the banks/credit cards were offering up until a couple years ago.
True, Blake, but the costs driving corn syrup are also mostly oil/ethanol related so I didn’t feel the need to addendum that tidbit. Point being that almost all price increases right now are directly gas/ethanol/diesel related as wages are flat, as are carrying costs for debt as prime has been flat in like forever and as are physical plant costs (land and buildings) which are running negative.
One overlooked aspect of the RE collapse is that, if all other things were humming along, the drop in RE would be a boom for breaking ground on new facilities for manufacturing and other expansion. Construction is salivating at getting back in the game and many GCs are doing jobs at vastly reduced margins. BUTFOR the shitty Obama fog of crappy energy policy and regulatory bullshit, now is an excellent time to start or expand a business.
Lord seems to be suggesting that people will blame the President because they are paying more for food and gas while watching the value of their homes and savings plummet.
That’s a perception thing. Whatever data points people use are what matters here, not how rigorous they are at defining a trend.
Obama’s policies have taken us here. It was all rather predictable, as far as I’m concerned. I lived through Carter, and I said early on that Obama is Carter with a tan. And without the blinkered innocence about what his policies would yield.
BUTFOR the shitty Obama fog of crappy energy policy and regulatory bullshit, now is an excellent time to start or expand a business.
Yes, land is cheap, capital is abundant, and vast swathes of people are desperate for gainful employment. The ground is truly fertile for growth, yet government stands athwart any such enterprise. Not coincidentally those same conditions make us ripe for another CCC or some other massive form of government work program.
The trick for the Obamaites will be to maintain this state of affairs all the while preventing it from interfering with winning a second term. It would be quite a trick, but the consequences should they succeed will be profound. Only then will their true aims be revealed.
Once Obama is painted in folk’s minds as the harbinger of bad economic juju, it is rather tough to get people to change their perceptions of him. It doesn’t matter what the MBM tries to do, once he is painted black, he is forever shaded that way and no amount of scrubbing is gonna make him lilly white.
As someone famous once said, ‘where do I go to get my reputation back?’
Economically, he’s screwed. And by extension, so are we.
I’m not claiming that he had an economic reputation, BTW, just using that quote to illustrate how corrosive doubt can be. Tis human nature.
I guess Obama will just have to fall back on his mad dipomatic skills bringing peace to the Middle East to get him re-elected.
Stephanie, it was Ray Donovan, President Reagan’s Secretary of Labor.
Jeff, I don’t disagree, but I still think it’s important to take the moral high ground and not engage in propaganda if only not to wake up one morning and find that we won all the battles but lost the war, …. same as the old boss and all that.
I hear that, Charles. But this guy is anything but blameless. You come out TELLING people you won’t mind higher gas prices — and that energy prices will “necessarily skyrocket” — it ain’t propaganda to point out the yield.
And honestly? I think it important to differentiate between taking the moral highg round and being willing to tell the truth, even if it doesn’t poll well. I’m concerned that a lot of what is often sold as “taking the moral high ground” is actually cowardice. On “our” side.
What part of the packaged product’s production cost owes to corn syrup? Once off the dock, what are distribution costs and what’s the retail margin? A nearly 30% retail price increase cannot come from a small fraction of the product’s cost to produce.
A remarkable realization and one that confirms the Cloward-Pivenesque nature of the era of Ogabe. The house always wins, doesn’t it?
You think these people realize that at some point they are going to have to raise interest rates?
I remember back in the nineties when I bought my first house I got a low-income loan, but it was still about six percent. I had to put 20 percent down on the house, everything we had in the Cookie jar. Then (of course) I needed a car and I found a used one, but the used car rates were between 9 and 11 percent. I remember telling someone I respected that I was looking at cars, and really wanted car A, but could only afford car B. This guy told me to refinance my house at four percent, take the cash out and buy the car I wanted with it. That way, I could get the car I wanted for “cash” and pay close to six percentage points less on the money.
My wife about shit when I told her this, and we didn’t do it*. But I brought it up a lot, and everyone else I told about it thought it was a great idea. Those people are running the government now.
It’s like the guy who wants the fridge to come with the house and ends up financing that POS GE fridge for thirty years. He thinks he got it for free…
*And I never did get a car, I got the old one fixed and drove it for another 12 years. She got a new one every five years, like clockwork. I’m so pussywhipped.
But…but…but… He’s HISTORIC!
I still find it hard to accept that enough of my fellow citizens were so gullible as to elect this fast-talking loser in the first place. It’s like nobody ever tried to sell them a Rolex on the street or something.
Maybe America needs to get out more.
Bernanke is in an impossible situation, LMC. Meaning that we are, of course.
It’s almost like it’s progressivism writ large.
My dad got transferred to another state back in ’84. My parents’ mortgage was about 14.5%, IIRC. My brother and I ate a lot of beans and weenies, and we wore a lot of hand-me-downs.
They did a re-fi in ’86. Dad got steaks for the grill; I got a new pair of sneakers. It was a happy day. And the reason for celebrating was because the interest rate had gone down to 10.5%!
This is what my niece in college can look forward to. Torches and pitchforks are too good for these bastards.
JHoward, come on, it’s quite obvious I used corn syrup as an example of an input cost and provided supporting evidence for why there is an increase in the price of corn syrup.
Nowhere do I make the claim the cost of corn syrup is the sole driver of price increases.
Input costs are driving prices also, along with transportation costs.
I made a simple observation and you’re going pedantic on me?
Give me a break.
Blake, you posited that syrup prices were shooting through the roof in reply to Stephanie’s observation that Coke had risen nearly 30% at retail. That was the context and that’s how you responded. I established neither. Maybe there’s a better word than pedantic to use here.
Print and paste.
JHoward: My exact words were “..I’m sure Coke has seen an increase in input costs, such as corn syrup.
Or isn’t that enough context to perhaps give me a break and admit that signified I was using corn syrup as an example?
JHoward, I’ve an idea. Let’s go right past the flame war and challenge each other to a duel.
I suggest sledgehammers in 6 feet of water.
(somewhere along the way I’m losing my sense of humor. Probably because I see America the train wreck and I’m an unwilling passenger)
“Probably because I see America the train wreck and I’m an unwilling passenger”
but you’ll be riding high speed rail into the crash. so there’s that.
Let’s just note that corn syrup would be much cheaper BUTFOR his (and let’s face it congress’ prior ethanol BS) shitty energy policies. This is the BUTFOR presidency of a fool who thinks everything is coming up unicorns and skittles BUTFOR the actions of others.
Corn syrup rising = Bush’s fault
Gas rising = those evil speculator’s fault
Food costs rising = those evil corporation’s fault
I am puzzled as Jeff is that Obama’s signal to have ‘energy prices necessarily skyrocket’ isn’t being incorporated into a campaign ad with ‘Mission Accomplished’ splashed across the screen. That ad couldn’t possibly be labeled ‘divisive’ if you are just giving him credit for success could it?
You’d think he would be proud that the one area that he signaled his goal and actually met it would be reason for trumpets sounding. In a show of comity and bipartisanship, I suggest the republicans laud him for that…
The West going belly up while the only real fight is for the scraps will do that to someone.
trump is like the shelling you do before you advance on the enemy
Hey! I’ve got a really nice pair of Prussian Cavalry sabers, 140 years old and still sharp enough to shave frog hair.. So to speak :D Yet the blades are light and it would take considerable skill to do more than superficial but very bloody damage. Just the thing for a duel.
But seriously, lots of things go into the increased price of food in the store. Increased cost of transportation due to higher fuel prices is a big one, but there’s also the increased cost of putting diesel in the tractor that increases the cost of producing food for the milk cows and beef cattle as well as driving up the cost of production of people food. Then there’s been a horrible drought in the south — remember those fires in Texas? The drought isn’t doing anything good for the production of fruits and vegetables and the drought extends into the southern hemisphere so better stock up on coffee. Then there’s the price of packaging. If it’s in plastic, plastic is a petroleum product, if it’s in a can, metals have all gone through the roof in the last ten years, seems metals are war materials. If it’s paper, paper is wood and the price of lumber, cement, and other building materials have also been driven up due to reconstruction in the ME — increased costs of houses weren’t entirely driven by flippers and speculators over the last ten years, the cost of a 2×4 tripled. We’re in a perfect storm of commodities shortages.
The reasons are many and complicated. It’s hard to blame Obama for the southern drought and he didn’t start the wars in the ME, but he’s started another war and despite all promises has done nothing to end the wars he inherited, and he’s responsible either through action or inaction for the rest. He’s got a big ol’ “kick me” sign on his back.
I think Jeff is correct to be pessimistic, but he overlooks a major factor in Lord’s thinking: I simply don’t see another Ronald Reagan on the horizon. Instead we’ve got RINOs (Romney and Huckaby), fools (Gingrich, Trump and Ron Paul), and untried neophytes (Palin, Ryan, et al.). I’d have a lot more confidence in Obama’s demise if we weren’t counting on the Stupid Party to unseat him.
Swen, I’m sort of old fashioned when it comes to duels American style.
I would have suggested fisticuffs and winner buy the beer after, but if JHoward is anywhere near my age, one of us would probably put our back out before things got started.
Darn,
The Google-fu master (Geoffb) beat me again.
CLICK TEH LINK Take charge and move out People!!!
(Although I plan on personalizing it with A Mission Accomplished Banner;)
“it ain’t propaganda to point out the yield.”
Darn skippy Jeff
…and “The Buck Stops Here” is what Americans expect to hear from a President.
I don’t care how much money he spends The Rough Rider’s Ghost will have his say!
“I’d have a lot more confidence in Obama’s demise if we weren’t counting on the Stupid Party to unseat him.”
no the vile party is the one we overthrow. the executive branch next time is a 2 fer.
Guy in my econometrics study group asked the following question, “We all know the sun is rising tomorrow and we all know why. But, to ground it properly, I’ll prove the possibility — not even the inevitability — of the sunrise sometime around noon every day.”
The implication, understood by all, is that one needs to hammer down the specifics when making a specific claim. Yet, equally true, you can discuss things at different level if you want. Pick the level that works best without the obvious — and often smart — quibbling.
Discuss the increase in money supply over the increase in GDP. The consequence in the aggregate is obvious and undeniable.
(That doesn’t sound like a question but the implied question was the “What’s the use of non-academic econometrics because we’ll be expected to settle specific questions but we won’t have the time or resources to settle them?”)