Tag: inflation
America Is Still Great -- But Trump Threatens Our Prosperity And Freedom

America Is Still Great -- But Trump Threatens Our Prosperity And Freedom

After I voted yesterday, I made it a point to thank every poll worker and citizen volunteering at our polling place. In Maricopa County, Arizona, the tabulation center will have snipers on the roof, metal detectors and security at every entrance.

In Colorado, some polling places have installed bulletproof glass and purchased bulletproof vests for election workers. In Gwinnett County, Georgia, public schools will be closed so that resource officers can be redeployed to cover voting. Those are just a sample of the measures being taken nationwide.

The GOP wailed about immigrants supposedly turning America into a Third World nation, but its deliberate, unrelenting lies and threats of violence actually pushed us in that direction.Still, at my polling place and across the nation, the poll workers show up. God bless them all.

The neo-fascist Trump/Vance ticket relies on a doom message. I suppose they have to. In order to convince non-MAGA voters to put aside their dislike of Trump's coup attempt, authoritarian intentions, alarming ignorance and insane hangers on, to say nothing of Trump's clear mental decline, they have to portray Biden's (or now) Harris's America as a hellscape. "They've destroyed the economy," Trump claims. "I've never seen a worse period of time."

Look around you, my friends. We live in the wealthiest country in the world — in the history of the world, for that matter. The reason so many people from supposedly thriving places like China are making the trek across the globe to attempt to cross our southern border and request asylum is because, for all our faults, this country remains a beacon of freedom and a remarkable engine of prosperity.

The Economist lays out some of the details. "America has grown faster than other big rich countries, and it has rebounded more strongly from bumps along the way." In 1990, the United States accounted for two-fifths of the overall GDP of the G7 nations. Today, it's about half.

American productivity leaves others in the dust. "On a per person basis, American economic output is now about 40 percent higher than in western Europe and Canada, and 60 percent higher than in Japan — roughly twice as large as the gaps between them in 1990." And here's a statistic that may make you rub your eyes: "Average wages in America's poorest state, Mississippi, are higher than the averages in Britain, Canada, and Germany." In the past three years, China's GDP has slipped from about three-quarters of America's to two-thirds today.

Nor is it the case — sorry, Bernie Sanders — that all gains have gone to the top one percent. Earners in the bottom quintile of households saw their after-tax and after-transfer income rise by 25% between 2007 and 2019 (some of that attributable to the Affordable Care Act). Sure, the super rich are super rich (and some are dangerous) but if you exclude the top one percent from the calculations, the Economist reckons that the bottom 20 percent of earners made faster gains in the past couple of decades than the top 20 percent.

The middle class saw median real income increase by 57 percent between 1990 and 2019.Inflation (caused by COVID, COVID relief and Russia's invasion of Ukraine) hurt U.S. consumers, and voters may yet punish Kamala Harris for it. There's some irony here because Trump's proposed tariffs would boost inflation right back up. Sadly, or perhaps tragically, many voters don't understand that tariffs are taxes.

Aside from inflation (which has come way down), the U.S. economy is doing remarkably well. Unemployment fell to its lowest rate in 55 years. Growth is strong. Our universities remain magnets for worldwide talent. The United States leads the world in research and development, and thanks to fracking (an American innovation) is the largest producer of oil and gas on the globe. (Fracking has also been a net gain on fighting climate change since the gas it produces is less polluting than the coal it replaces.) Again, inflation has been effectively defeated by the Federal Reserve's interest rate hikes and is now sufficiently tamed to permit rates to decline.

This is no hellscape. Crime rates are declining. Our air and water are clean. Our supermarket shelves are groaning with foods I had never even heard of when I was a child.Politicians are keen not to be seen as representatives of the status quo. The conventional wisdom is that it's poison and that's probably right. But what if the status quo is actually something for which we should say a daily prayer of gratitude and the real danger is that we'll screw it up because we've been misled into thinking things are terrible?

The country has its share of troubles — unsustainable national debt, excessive gun violence, schools that fail to teach civics, fracturing families, and corruption of our information media — but none of those true problems is being addressed by Trump. Instead, he and his minions fill people's heads with fantasies about rampaging criminal immigrants, a failing economy, spiking crime, and some amalgam of "communism" and "fascism."

The truth is that America is already great and the most pernicious threat to that greatness is Trump himself.

Mona Charen is policy editor of The Bulwark and host of the "Beg to Differ" podcast. Her new book, Hard Right: The GOP's Drift Toward Extremism, is available now.

Reprinted with permission from Creators.


Nobel Economists Warn Foolish Trump Schemes Would 'Reignite Inflation'

Nobel Economists Warn Foolish Trump Schemes Would 'Reignite Inflation'

A coalition of the world's top economists are sounding the alarm over a potential second wave of massive inflation if former President Donald Trump is elected to a second term in the White House.

In a recent open letter, chiefly authored by economist Joseph Stiglitz, 16 Nobel Prize-winning economists warned that the ex-president's economic policies would have a disastrous impact on the global economy. Newsweek reported the economists wrote that even though "each of us has different views on the particulars of various economic policies," they still believe President Joe Biden's economic agenda is "vastly superior to Donald Trump."

"Many Americans are concerned about inflation, which has come down remarkably fast," the letter read. "There is rightly a worry that Donald Trump will reignite this inflation, with his fiscally irresponsible budgets."

Under the Biden administration, inflation hit a peak of 9.1 percent in June of 2022, largely as a result of the economic fallout from the Covid-19 pandemic and actions the Federal Reserve took to stabilize the economy. The Fed responded to inflation by increasing interest rates, which, while alleviating inflation, have made it harder for Americans to finance major purchases like homes and vehicles. The Fed hasn't yet reduced interest rates, though Newsweek reported that inflation is back down to 3.3 percent as of May 2024.

Despite that initial inflation spike, the economy has performed well under Biden's watch under all traditional metrics, like unemployment rates, GDP growth and consumer confidence. Real wages (adjusted for inflation) are up, meaning that more Americans have more money in their pockets. Gains by lower-income Americans have been the most significant in recent years: According to data from the St. Louis Fed, the net worth of the bottom 50% has increased by roughly two-thirds since 2019.

Trump has attempted to cast himself as the better president on economic issues, though his proposed policies have raised red flags from economic experts warning that the American working class would suffer significantly. The former president has proposed a universal 10 percent tariff on imported goods and tariffs as high as 60 percent on Chinese goods — the cost of which economists say would simply be passed down to consumers in the form of higher prices. Michael Strain, who is the director of economic policy studies at the conservative American Enterprise Institute, said that Trump's policies "would result in price spikes" for most Americans.

In the letter, which Axios first obtained, Stiglitz and his colleagues maintained that Trump's policies "would have a negative impact on the U.S.'s economic standing in the world, and a destabilizing effect on the U.S.'s domestic economy."

Trump's plans to round up, detain and deport millions of immigrants would also be harmful to the economy, given the dependence multiple sectors of the economy have on immigrant labor. Strain wrote that the former president's hardline immigration agenda would "cause a severe supply shock to the labor market." And in analyzing his mass deportation policy, New York Times reporters Maggie Haberman, Charlie Savage and Jonathan Swan wrote earlier this month that production decreasing and labor becoming more scarce would naturally result in higher prices.

"For example, if farmers could not find enough workers to pick all their crops, there would be a smaller supply of produce and it would get more expensive," they wrote. "And businesses would be forced to offer higher wages to attract or retain workers — passing on some of their higher costs to consumers."

Stiglitz was joined in his letter by Nobel Prize winners George A. Akerlof (2001), Sir Angus Deaton (2015), Claudia Goldin (2023), Sir Oliver Hart (2016), Eric S. Maskin (2007), Daniel L. McFadden (2000), Paul R. Milgrom (2020), Roger B. Myerson (2007), Edmund S. Phelps (2006), Paul M. Romer (2018), Alvin E. Roth (2012), William F. Sharpe (1990), Robert J. Shiller (2013), Christopher A. Sims (2011) and Robert B. Wilson (2020).

Reprinted with permission from Alternet.

Jerome Powell

Biden Didn't Cause Inflation -- And Now Prices Are Falling

MAGA Republicans have been quick to blame President Joe Biden for rising prices, although inflation following the COVID-19 pandemic is hardly limited to the United States. Statista published a list of the 20 countries with the world's high inflation rates in 2023, and the U.S. was nowhere to be found.

Inflation has been a global problem, not a problem that is limited to the U.S. And according to new U.S. government data, prices are declining here.

NBC News' Brian Cheung reports, "The Personal Consumption Expenditures Price Index (PCE), one of two major readings on inflation, fell by 0.1 percent between October and November, the Bureau of Economic Analysis said Friday — the first monthly decline in more than 3½ years. Combined with other recent data showing disposable personal income and consumer sentiment rising, the United States' economy appears to be heading into 2024 on strong footing even as it cools down."

A separate report from the University of Michigan, Cheung reports, "showed consumer sentiment soaring 14 percent in December."

The report's author, Joanne Hsu, wrote, "All age, income, education, geographic, and political identification groups saw gains in sentiment this month. The index is now just shy of the midpoint between the pre-pandemic reading and the historic low reached in June 2022."

The U.S. Federal Reserve, after a series of interest rate hikes, is now saying it may cut interest rates sometime in 2024 — although it remains to be seen how much will be cut, and when. The Fed has been raising interest rates in the hope of taming inflation, and Inflation Insights founder Omair Sharif is urging the Fed to proceed with caution before making a decision about a possible cut.

Sharif, according to Cheung, said of 2024's first quarter, "The more benign inflation data is certainly something to celebrate, but there is some turbulence ahead."

Reprinted with permission from Alternet.

Johnson & Johnson Sues Biden Over Law Reducing Prescription Drug Costs

Johnson & Johnson Sues Biden Over Law Reducing Prescription Drug Costs

CNBC reports that Johnson & Johnson sued the Biden administration on Tuesdayin an attempt to halt provisions in the Inflation Reduction Act designed to cut the cost of prescription drugs. The suit follows similar legal maneuvering by drug giants Merck and Bristol Myers Squibb.

President Joe Biden signed the Inflation Reduction Act in August 2022 after it passed both houses of Congress with only Democratic votes and over unified Republican opposition. A provision in the legislation allows the federal Medicare program to negotiate drug prices for some of the medications covered by program benefits.

The lawsuit filed by Johnson & Johnson in New Jersey’s federal district court aims to block the Department of Health and Human Services from compelling the company to participate in the federal program. According to CNBC, the company alleges that the legislation is the result of “innovation-damaging congressional overreach.”

Merck sued the administration in June, complaining that the process to lower prices is a “sham.” A week later Bristol Myers Squibb also sued, noting that its blood thinner Eliquis and its cancer treatment Opdivo would be included in price negotiations. Both drugs were significant contributors to the company’s profits in 2022, with a reported combined $20 billion in sales.

The Biden administration has been sued over the prescription drug benefit by the U.S. Chamber of Commerce and Pharmaceutical Research and Manufacturers of America (PhRMA), the lobbyist group for multiple drugmakers.

“We’ll vigorously defend the President’s drug price negotiation law, which is already lowering health care costs for seniors and people with disabilities. The law is on our side,” Health and Human Services Secretary Xavier Becerra tweeted on June 6 in response to Merck’s suit.

Johnson & Johnson, Merck, and Bristol Myers Squibb earn billions from drug sales. For 2022, Johnson & Johnson reported sales of $94.9 billion and $27 billion in profits. That same year, Merck’s net income was $14.5 billion and Bristol Myers Squibb’s was $6.3 billion.

In addition to the drug negotiation provisions, the Inflation Reduction Act also contains other stipulations designed to lower drug costs.

The law requires drug companies to provide rebates to Medicare if drug prices increase at a rate higher than inflation. The Department of Health and Human Services released a list of 43 drugs on June 9 that fall under this provision.

Prescription drug costs are now capped at $2,000 per year in out-of-pocket expenses for many Medicare recipients as a result of the law.

Insulin costs are also capped at $35 per month for certain Medicare recipients. In March, drug manufacturer Eli Lilly announced that it would cap the price of its insulin drug itself, including for patients outside the Medicare system, citing the changes implemented by Biden’s law.

In spite of its benefits for millions of consumers, congressional Republicans on February 3 introduced H.R. 812, a bill that would completely repeal the entire law. Rep. Andy Ogles (R-TN), who sponsored the bill, said in a statement touting his legislation, “Instead of creating any positive change for Americans facing record-breaking economic challenges, Leftists opted to increase federal spending and the deficit – by at least $110 billion dollars through 2031 – in order to advance their personal political agendas.”

During remarks on February 9 at the University of Tampa in Florida, Biden warned about the fallout for medical patients if Ogles’ bill becomes law.

“If Republicans in Congress have their way, the power we just gave Medicare to negotiate lower prescription drug prices goes away. The $2,000 cap next year on prescription drugs goes away. The $35-a-month insulin limitation goes away,” Biden said.

Reprinted with permission from American Independent.

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