How Republicans Are Distorting Inflation and Supply-Chain Problems

[Zorro]

Prices are surging for reasons largely beyond Joe Biden’s control, but that won’t stop G.O.P. cries of “Bidenflation.”

Like virtually everything else in America, the Consumer Price Index has been politicized. Last week, after the Labor Department announced that prices rose by 6.2 per cent in the twelve months to October, the biggest jump in thirty years, the Republican National Committee tweeted, “Bidenflation is hurting working Americans all over the country.” It’s abundantly clear that Republicans now see inflation as a winning issue going into next year’s midterm elections. “The entire Republican ecosystem is united on this fact because it’s a leading issue amongst voters,” one G.O.P. strategist told the Hill. Moreover, there are signs that the Republican strategy of pinning responsibility on the President is working. On Sunday, the Washington Post published a poll indicating that almost half (forty-eight per cent) of Americans believe that Biden deserves “a great deal” or “a good amount” of the blame for rising inflation.

With some economists predicting that the inflation rate could rise even further over the next few months, the Republican onslaught on Biden will only intensify, but it can’t stand unchallenged. Many of the factors contributing to the inflation surge are beyond the immediate control of any President. Sticker shock at the gas pump is primarily a result of a decision by the opec oil cartel to restrict production at a time of rising demand. Higher prices for new and used vehicles, which have been one of the biggest drivers of the rise in the C.P.I., stem largely from a shortage of new cars caused by a lack of computer chips imported from Asia. Higher rental costs, which contributed to the most recent jump, can be traced to spiking real-estate prices and rock-bottom interest rates.

The so-called supply-chain problem, which lies at the heart of the broader inflation surge, is a global phenomenon rooted in a faster rebound from the worldwide coronavirus shutdowns than many people had expected. “As the global recovery gains traction, demand for raw materials, intermediate inputs and logistical services has outstripped available supply leading to rising and volatile prices, and delivery delays,” the Basel-based Bank for International Settlements (B.I.S.)—the central bank of central banks—notes in a new report. Shipping costs have soared, cargo vessels have been forced to queue for days to gain access to ports, and the situation has been made worse by “precautionary hoarding at different stages of the supply chain,” the report goes on.

This global logjam is leading to higher inflation in many countries. In Britain, in August, consumer prices recorded the biggest one-month jump on record. In Germany, the inflation rate topped four per cent, the highest figure since the nineteen-nineties. In the nineteen-country eurozone, the inflation rate in October was 4.1 per cent, according to a preliminary estimate. In Russia, inflation is running at more than eight per cent, while, in Brazil, it’s nearly eleven per cent. These figures bear further inspection. If the Biden Administration’s spending policies have been a major factor in driving prices higher—as Republicans claim—you would expect the inflation rate to have jumped a lot further in the United States than in Europe, say. That hasn’t happened. Between January, 2020, and October, 2021, the U.S. inflation rate increased by approximately 4.7 percentage points, and the eurozone’s inflation rate increased by 3.7 points. The U.S. jump is bigger, but the figures are roughly in the same ballpark.

https://www.newyorker.com/news/our-columnists/inflation-and-the-great-global-logjam

[Whatthe_Firetruck]

1. I'll bet a good deal of it is because...

...we no longer manufacture as much in the US. When we are dependent on goods that come from overseas, any little hiccupp n the process has a magnified impact. Add to that the way our ports infrastructure has stumbled, we're having trouble handling the goods trying to get in.

I wonder if that was weaponized by the 'Pubs. Pub in power? Make sure the goods flow. It's a Dem? Gum up the works.