Bread line, image courtesy of Antonio Graceffo
In the first year of the Biden administration, inflation hit a 40-year high and has continued to climb steadily since then. However, he blames the problem on “evil corporations,” not his own misguided economic policies.
“Too many corporations raise prices to pad their profits, charging more and more for less and less,” said President Biden in his most recent State of the Union Address. His administration has driven the deficit, expanded the debt to historic levels, printed money, increased the money supply, and given away trillions of dollars to people who do not work and to foreign countries, but he blames corporations for inflation. And to “protect” the public from the evil capitalist system where everyone is free to buy, sell, trade, and earn as they wish, he has vowed to crack down on “price gouging.” Ostensibly, the White House will decide what the “correct” prices should be and which prices are being gouged, and the government will use its vast power to force corporations to return those prices to a federally determined level.
The Federal Reserve Bank of Kansas City blames inflation on corporate profits. Some reports claim that corporate profits accounted for as much as 53% of inflation. The reality, however, is that inflation is a monetary phenomenon caused by the reckless fiscal and monetary policies of the Biden administration.
Inflation, by definition, is the expansion of credit and the money supply. This causes the buying power of the dollar to decrease, which means you need more dollars to buy things. Most consumers see and are alarmed by rising prices, but this is not inflation; it is only the result of inflation. The real culprit is massive debt creation, deficit spending, loan forgiveness, foreign aid, and transfer payments made by the Biden administration.
Evidence used by the White House and other liberal pundits regarding inflation reference the fact that corporate profits are up, identifying this as a cause of inflation. However, corporate profits are up in nominal terms because the dollar is worth less and prices are rising. Corporations took in more dollars, but those dollars buy fewer raw materials and pay for less labor than they did before Biden took office. The same administration that blames corporations for rising prices is also demanding that the minimum wage be doubled. Labor accounts for between 20% and 40% of cost for most retail and fast food businesses. Forcing a doubling of the minimum wage will drive prices up.
Hellbound and Down 