The Misery Index
By Darrell L. Castle
Hello this is Darrell Castle with today’s Castle Report. This is Friday the 17th day of June in the year of our Lord 2022. On this Report, I will be talking about inflation primarily, but also what economists using Bureau of Labor Statistics data, refer to as the misery index. When will inflation subside, when will gas and food be affordable again, what is causing this misery. Those are questions worthy of our discussion today.
National misery – and whom to blame
What I will try to do today is to give you some thoughts on how regular Americans are experiencing life every day and how this extremely empathetic administration, this we are always on the side of the working people, the little people, and against big business, political party is really made up of the most callous, unfeeling people in this country.
Americans are feeling the pain of this callous administration alright. They feel it at the pump, at the grocery store, on the vacation they don’t take, they feel it every day as prices continue to skyrocket with no end in sight. There will eventually be an end of course as all things end, but what will that entail, chaos, civil disorder, violence, or just the continued tyranny of the global cabal? From The Wall Street Journal:
Energy and food prices made up much of the May increase, but this is cold comfort for consumers. Americans used to be able to substitute lower-cost protein when beef prices rose. But everything at the supermarket has become more expensive in the past year—eggs (32.2%), chicken (16.6%), milk (15.9%), even soup (13.9%). Lower-wage workers are getting crushed by Bidenomics.
Misery Index definition
The Misery Index tells us something about the health of the economy and along with it the health of the nation. As the rate of inflation goes up the cost-of-living increases and as unemployment rises more and more people are dropped into poverty. The misery index then, is a look in the mirror for the economy and for the administration for that matter, telling them the condition of the average worker.
Yes, ordinary people are suffering as their standard of living collapses. I usually top off my gas tank on Sunday to be ready for the drive to work the following week. The last two Sundays the price was up 20 cents per gallon each week. When people pay more and more for gas each week and more and more for food each week their families sink deeper below their former standard of living. It’s as if their wages are being cut each week. It would break the heart of anyone not a complete psychopath or in the Biden administration.
What exactly has been the administration’s reaction to all this? Several evolving approaches consisting of everything from pure propaganda to wishful thinking, to embarrassing lies, have been unsuccessfully tried. The president wants the public to blame anything and anyone but himself for the misery inflation is causing. From its just transitory, and nothing to worry about to inflation is good to its Trump’s fault to its Covid’s fault to its Putin’s price hike to its big oil’s fault. It went from there to having press secretary Karine Jean-Pierre say, “We feel that we are in a good position to take on inflation.” The bottom line for the president is that the misery index is everybody and everything’s fault except his.
It’s the fault of the pandemic, it’s the fault of corporate greed and the rich who don’t pay their fair share, but most of all it’s the Putin inflation tax. However, I don’t remember Putin giving away trillions with no corresponding production to offset it and I don’t remember him canceling the Keystone Pipeline or blocking drilling offshore and on federal lands, and I don’t remember that he imposed any sanctions on himself. This is all just lies to justify what president Biden and the Democrat prosperity destroying radicals in the Democrat Party tell us to cover their own responsibility for intentionally ruining the lives of the American people.
That is a big charge, I know it is, but it is based on the President’s repeated announcements, confessions of intentions, or whatever you want to call them. He told us he was going to destroy the oil industry and the fossil fuel industry in general. That is one of the few promises he has lived up to, but he didn’t tell us how we were going to be able to buy food and get to work. Destruction of the Pipeline, continual restrictions on drilling and on the production of natural gas. The sanctions against Russia and other oil producing countries such as Venezuela, but not Saudi Arabia of course have all contributed to the destruction.
We are supposed to be learning new habits, you see. When gas costs more we will drive less and use more green energy. Are you mad yet.? Does that callous disregard for the lives of the people he is supposed to be serving infuriate you as much as it does me? Well, The New York Times recently carried an Op-Ed which sought to tell us the upside to inflation. It was called “You want to buy meat? In this economy?” As blogger Scott Johnson explains about the article, it is like a bad cough contracted by a cigarette smoker, a good opportunity to lose a bad habit.
Inflation has the potential to drive welcome change for the planet if Americans think differently about the way they eat.
I can’t take this anymore, this self-righteous, deluded, pontificating, horse manure. But I am compelled to give you the last sentence just to make you even more angry.
Climate change has motivated some to eat less resource-intensive meat and more vegetables, grains and legumes, but this movement has not reached the scale necessary to bring needed change—yet.
All that word salad written in Ivy League language can be boiled down to this: We oh so superior, so aware, so woke, so intelligent, we are going to starve you ordinary people until you comply with our demands. We will decide the future of America not you ignorant peasants. What she doesn’t quite understand—yet, is that if she is lucky as a good useful idiot, perhaps they will kill her last.
The Democrats are aware of what they are doing to the American people, and they are aware of what it means for them at the polls in November, so they are faced with a real dilemma. Do they stop inflation and let things return to normal which would mean crashing the stock market, business and personal bankruptcies, unemployment, and depression, but most likely the misery would be over in a couple of years? If they choose to let inflation continue it will be the same at first, then years, possibly decades, of hunger, poverty, war, destitution, and chaos as the monetary system collapses possibly worldwide.
One way to end inflation – for someone with guts
To end inflation, the Fed only has to raise interest rates above the rate of inflation which would solve the problem, but also cause the troubles I just mentioned. The problem is that when inflation was last upon us during the Carter years and Paul Volcker came in as Fed chairman under Reagan to fix it he raised interest rates into the double digits which collapsed housing and stock markets, but in a couple of years the economy went on a decades long boom. That method will be very difficult this time around even assuming the Biden administration had the guts to do it.
The following explanation is just plain logic and commonsense that anyone can see, but the numbers applied to this logic come courtesy of our friends at Zero Hedge. When Carter/Volcker/Reagan raised rates to save the economy in the 70’s and 80’s the U.S, government debt was less than I trillion. Now it is over31 trillion. At that level of debt every 1% increase in interest rates means an additional $310 billion in interest payments. The rates have been effectively zero for many years and that still means $305 billion. The Fed says it will raise to 3 1/4% as of last Wednesday.
Seventy-five basis points won’t cut it
That simple raise which would not stop inflation or even come close to stopping it would mean the U.S. would spend about 1 trillion in interest without reducing debt by a cent. According to the CBO, the Congressional Budget Office the U.S. will have a deficit of two trillion this year which will mean a debt of over 33 trillion which makes every one percent raise in interest $330 billion in interest payments. The folks at Zero Hedge think that stopping inflation will mean destroying the bond and credit markets and therefore the FED will not stop it, but let it rage on. Time will tell if they are right.
All those numbers mean a debt crises of unprecedented proportions is on the way one way or another. No one at the Fed or the administration, it seems, has the courage or even the desire to do what is best for the country. Retaining power is more important than survival of the country as a whole. There is so much at stake here folks, it would be hard to overstate. The lives of countless millions as well as the future of the greatest nation state in history are all bound up in this decision.
This misery does not depend on an event
This particular inflation is not ordinary in the sense that it is not the normal business cycle, and it is not event driven. That just means that gas goes up when the Saudis turn off the spout or bread goes up in a snowstorm. That kind of inflation is no problem because it corrects itself in a short time without the government doing anything to make it worse. Price increases are just information which might tell us that there was a freeze in Florida and the price of oranges went up or maybe the public just wants more oranges.
That type of inflation is easy because as prices rise consumers consume less and producers produce more so the problem solves itself. When the price of everything goes up at once, however, it tells us that we have a money problem because our money is losing value. The oranges, the hamburger, the gas, aren’t suddenly worth more, the money is suddenly worth less. The Consumer Price Index from last week tells us that inflation is accelerating, and price increases are entrenched in the economy. Will the Fed begin an aggressive, for them, series of interest rate hikes which will add to the political problems for the Democrats, or will the Fed abandon its mission and succumb to political pressure?
How fast new money has come in
Since about 1999 new money has entered the economy at about 8 trillion according to Bonner research. That’s ten times as much as had been printed since the Fed was formed in 1913 combined. This money just fell on businesses and individuals alike until they become addicted. I see it in the laisse faire attitude of many of the people in my law office each week. Oh well the government has always done something to save us, and it always will, or we will vote in a new, more accommodating government. Wars, transfers, stimulation, giveaways, corporate welfare, and other boondoggles all got their share of the new, unearned money.
In conclusion, inflation is one side of the coin of misery for ordinary people. The other side of the coin is declining real wages. People have less money each week to buy goods which are ever increasing in price so fewer goods are bought. How long before gas and food are out of reach for the average American? What will they do then, buy a Tesla and eat bugs? How bad are things in this once great country right now? Even babies are starving because their formula is gone to the border to feed invading migrants and the factories are closed. If that were not enough, even the moms of the babies can’t get sanitary supplies.
Finally, Folks, it looks bad in the misery mirror right now, but maybe I’m wrong. Even my dear wife calls me a pessimist sometimes, but I respond with no, my dear, I’m a realist. To quote one of ancient Greece’s Stoic philosophers, Epictetus:
For what is the professed object of reasoning? To state the true, to eliminate the false, to suspend judgment in doubtful cases.
At least that’s the way I see it,
Until next time folks,
This is Darrell Castle.
From castlereport.us, appears here by permission.
Darrell Castle is an attorney in Memphis, Tennessee, a former USMC Combat Officer and 2008 Vice Presidential nominee. Darrell gives his unique analysis of current national and international events from a historical and constitutional perspective. You can subscribe to Darrell's weekly podcast at castlereport.us
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