Everyday Americans understand inflation perfectly. But the egghead economists and policymakers who govern their lives don’t.That may be because inflation is one of the biggest concerns of those who live in the real world, and it may lead to a political earthquake next November in the presidential and congressional elections. Here’s the reality and here’s the political narrative: Reality is that prices have been going up at the fastest rate in 40 years and they are still going up.Inflation (on an annualized basis) was 9.1% in June 2022, 4.9% in April 2023, 3.7% in September 2023 and 3.1% in November 2023 (the most recent data available).It’s true that the rate of inflation is coming down, but prices are still going up. They’re going up at a slower rate but they’re still going up.Not only that, but past price increases are locked in so new price increases are applied to a higher base. This is killing American consumers. The average price of a pound of ground beef in the U.S. was $5.11 in September 2023. In October 2023 the price of a pound of ground beef was $5.23. That’s a 2.3% increase on a month-over-month basis, which annualizes to over 25%.That’s the kind of inflation that real Americans confront every day. The economists prefer measures of inflation that exclude energy and food prices, what they call “core” inflation. Some eggheads use measures that exclude food, energy and housing costs. They call that “super-core” inflation. Those measures are academic constructs and bear no relationship to the real world. Try living without gas in your car, food on the table or a place to live.The ignorance of politicians gets worse when we see Joe Biden come out and say, “Prices are going down,” and retailers should lower their prices and avoid “price gouging.”Biden is purposely confusing lower rates of inflation (which are still price increases) with lower prices (which are not happening). It is possible to use propaganda to lie to the American people; it can work in the short run. But inflation is not one of those areas where propaganda works. The American people know what things cost, they know prices are going up, and no amount of White House lies can change that.My preliminary analysis indicates the day of reckoning will come at that ballot box next November. That’s when the construct of lies about inflation will come tumbling down. We’ll see.
