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Bruce Lawrence's avatar

As an economist, here is my explanation of inflation:

We are now on the third round of inflation. The first round was indeed caused by the excessive stimulus enacted by the Democrats in 2021. They used Covid as an excuse, but a lot of the spending was on behalf of traditional Democratic constituencies and fetishes. The effect was completely predictable, and the spending was irresponsible. The Democrats were warned, and they pointedly ignored the warnings because they were committed to the policy as an end in itself and didn't really care about the consequences.

But that excess stimulus has worked its way through the system by now. The second round of inflation was caused by supply chain disruptions as the economy revved up after Covid. That is also past now.

The third round of inflation resulted from a serious labor shortage. There were two causes for this. First, there was the impact of long Covid, which reduced the labor force by 1 to 2 million workers. (I have not seen recent updates on long Covid, but I think some of the victims have now recovered sufficiently to rejoin the labor force.) The other cause was immigration restriction, which was instituted by Trump and largely left in place by Biden. This bipartisan policy was actually designed to raise wages! When they complain about foreign workers "stealing jobs from Americans", what they really mean is that those foreign workers are bidding down wages. The whole point of restricting immigration was to push wages up - a policy favored by Trump's working class MAGA constituency, as well as Biden's Big Labor constituency. It had the desired effect, and now the working class is experiencing buyer's remorse because the lying politicians didn't tell them about the higher prices that would accompany higher wages in the short term.

At this point, I'm not sure why inflation is remaining stubbornly high. Maybe we are still in phase three, with too few workers. Or maybe the excessive federal budget deficit is still overstimulating the economy. Both of those problems are bipartisan in origin. Or maybe it's from OPEC+'s reduction in the oil supply.

The main policy lever over inflation is wielded by the Fed. Jerome Powell was appointed chairman by Trump and reappointed by Biden. So, again, inflation looks bipartisan.

If you really want so solve America's problems in the long term, including inflation, the federal government needs more revenue. But there seems to be a bipartisan consensus against raising taxes on anyone other than "the rich" - i.e., the people who already pay most of the taxes.

So, the reason your soft Trump friends have to focus on something Biden did three years ago, which is no longer operative, is because all the rest of his policies are identical to Trump's policies, and they have to avert their eyes to all of Trump's shortcomings and ignore the fact that Trump is, essentially, a Democrat on economic issues.

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