When President Ford undertook to combat inflation in 1974, he announced a campaign to “Whip Inflation Now.” The administration even produced a WIN button and a theme song by Meredith Wilson to support the campaign. Wilson’s song went like this:
Win! Win! Win!
We’ll win together,
Win together, That’s, the true American way, today.
Who needs inflation?
Not this nation.
Who’s going to pass it by?
You are, and so am I
If you can win, so can I.
As I recall the substance of Ford’s speech, we were to tighten our belts and clean our plates. It was all painfully stupid.
The Biden administration is taking a different approach. NR Capital Matters editor Andrew Stuttaford dubs it Deny Inflation Now, though we don’t yet have a DIN button or theme song. Stuttaford gives the Ford administration the edge in its approach to inflation.
White House press secretary Jen Psaki addressed the news that inflation had reached a 40-year high at the White House press briefing this past Friday (transcript here. Come and get your DIN:
Let me first say that, as it relates to the CPI — or the Consumer Price Index data this morning, let me start with the data. The data was taken in November. Even since that time, over the course of the last nearly two weeks, we’ve seen a decrease in costs in some of the areas that account for a big percentage of the rise in inflation.
So, about 50 percent of this — of this inflation — these inflations number — of the inflation numbers, excuse me, is attributed to the rise in gas prices and the rise in car prices.
On gas prices — and we had a chart, and maybe they’ll pull it up again — that Brian Deese, our NEC director, talked about just yesterday, what we’ve seen in recent days are gas prices are coming down from their peak. And this obviously isn’t — is not captured in the data since the data was through the course of November.
So, in 20 states, gas is below their 20-year average in real terms, and natural gas is down 25 percent from its November average.
We attribute this to a range of factors, including the President tapping the Strategic Petroleum Reserve in coordination with partners around the world. But more broadly, we’re seeing positive signs of supply chain bottlenecks being addressed — that are helping address this as well. And we expect those numbers to continue to decrease across the country.
The other piece that — and gas, I should also note — sorry — the wholesale market is down over 30 cents per gallon since its peak, which is, again, a good sign.
The other piece, as we’re seeing, as it relates to cars, is that wholesale car prices are down as well — or used car prices are down as well. So, when car dealers are purchasing cars, they are at a lower cost than they were before for a range of reasons, including the availability of chips, because we’ve helped solve some issues in supply chain. That means that as we look to the first quarter of next year or the first couple of months of next year, those car prices are going to keep coming down.
One other — third note — let me just note — in the data: One of, of course, the factors as it relates to cost that consumers are experiencing — or the American people are experiencing — is, of course, the cost of food, when you go to the grocery store. Twenty-five percent of that, our economists — our economic experts estimate is related to meat prices. You go, you buy a pound of burger, or you buy a poultry — whatever it may be.
And our assessment here — and we’ve taken steps as it relates to our competition agenda — is that dominant corporations in these industries are taking advantage of their market power to raise prices while increasing their own profit margins. Meat prices are a very good example of that — something we’re working to crack down on.
And just to give you a sense: Gross profit margins for big meat processes are up 50 percent, and net margins are up over 300 percent; that should not be the case. That is not all attributed to supply chain issues, et cetera.
So, I just wanted to dig into some of the data things there first. But I will note, as it relates to how this — how we have these conversations now with this data out — our argument is that this makes passing Build Back Better even more imperative, even more important. Because what Build Back Better will do is it will start cutting costs early next year, including for childcare ca- — cost, cutting them in half in 2022; making preschool free for many families, starting in 2022; saving families — saving families the eight hu- — $8,600 a typical family currently spends on preschool; leading to the construction of additional housing units, starting in 2022.
These are all areas — the way people — and the President just talked about this too — experience inflation, as you all know, is not through the data or graphs — as much as we love graphs in here — but it’s about the cost on their family budgets. And so that’s why, in our view and the President’s view, the argument is even stronger to get it done now.
Advocating the trillions-for-socialism Bummer Beyond Belief to mitigate inflation is even more painfully stupid than the WIN fiasco. It did not aggravate the problem it was intended to mitigate.
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