As you guys know, I'm not super charitable to the Biden administration. I think he's doing some good things, but there's a lot of nuance there where I don't think he's going ANYWHERE near far enough, and I don't always agree with the process by which he does them (as in his solutions are often inelegant, impermanent, and sub-optimally implemented). But, and this is a but, I have to defend him on this, because this concerns me, all of us who agree with me and my brand of politics.
The republicans are trying to strawman the Biden economy into a sort of 1970s dystopian nightmare, in an attempt to smear left wing ideology as a failure and close the door on any progressive thing ever. Given that, I feel the need to step in and say something. Not necessarily to defend Biden, but to defend all left wing ideology. We lost on this framing once before and that led to 40 years of Reaganism and centrist democratic policies. I don't want it to happen again because they manage to conflict people Biden is "too far left."
If you tune into fox news, you get a very dystopian perspective of the economy. We have gas shortages which are somehow Biden's fault. Inflation is up because of Biden's stimulus, no one wants to work because everyone has money and that's driving up costs. They're making it sound like we're suffering from 1970s stagflation. That wasn't even Carter's fault mostly either. Just an unfortunate economic cycle, and that's how things are right now. We tend to have a bunch of unique factors coming together and it is shifting the economy in ways that make things look worse than they are.
Explaining the oil shortage
First of all, earlier this month, a large oil pipeline was hacked. This shut down a lot of the oil supply, similar to the OPEC embargos in the 1970s, but on a shorter timescale. And then, people started panic buying gas similar to toilet paper last year. This shortage isn't really that bad. It's more a temporary blip on the radar as far as I know. A cyberattack messed with supply and then people started going to gas stations and hoarding gas. This caused the gas shortage. It had nothing to do with Joe Biden, or free money, it had to do with a complex chain of events that just as easily could've happened under Trump. Amazing how people blame democrats over mundane things happening in the economy that have nothing to do with their policies.
Explaining inflation
So, we are having an uptick in inflation right now. This seems to be complicated, but a few things to point out.
First of all, the spike isn't that large. Heck, given how last year was a bit deflationary, we're about where we would be expected to be if last year didn't crater the economy.
Second of all, supply lines might be somewhat screwed up from COVID. We had that log jam in the Suez canal a couple months ago, and we gotta kind of mind we were running a skeleton crew logistically to keep virus transmission to a minimum. So we're gonna run into pandemic induced shortages at times, causing price spikes.
Third of all, the economy is still messed up from COVID and now everyone is like "LET'S ALL OPEN ALL AT ONCE!" Again, it's shocking the economy. COVID caused a deflationary shock when it closed down and now we are seeing an inflationary spike. That's the big problem with everything. We shut everything down, and now everyone is trying to force stuff back to normal that fast. I mean in retrospect, what did they think would happen? You need to wean the economy off of COVID restrictions more slowly.
That's also, by the way, there's a real reason there's a labor shortage. All of these places want to hire people all at once, and despite the unemployment remaining high, this surge in demand for labor is causing somewhat of a spike, especially as people are reluctant to work at those jobs, quite frankly, because the pay is crap, and they amount to slave labor.
Which, really gets to the heart of the ideological issue and why I feel like I need to say something.
Whaa! No one wants to work any more!
I've already discussed this issue at length, but no, extended unemployment isn't, statistically, making people more work shy. But, and this is where I draw nuance, on an anecdotal level it is possible people are somewhat work shy, and of course, the expanded unemployment does offer a significant economic disincentive to work.
Not that I have anything against people refusing those jobs. I just feel the situation the extended unemployment has caused is artifically deterring people from jobs in the sense that they lose money for working. This is causing wages to rise, a lot.
Now, here's the issue with the right. The right's solution is to eliminate extended unemployment to force people to work. I think I even heard a Fox News host say recently that things were great when employers "didn't have to pay people" or something like that. Which gets to the big "culture war" type issue I wanna wage here. Yes, workers should be paid for labor. They are not slaves, and if a job isn't worth doing without explicit economic coercion, then maybe it shouldn't be done. I'm fine with the prices of some stuff rising 3% instead of 2% if it means that these people are paid $18 an hour instead of $9 an hour. I'd rather have people get twice the money, with an extra 1% of inflation. That's a GOOD thing.
As long as the inflation isn't literally runaway, a la the 1970s, there isn't a problem. And you wanna know how you solve 1970s style inflation? By doing what the fed did in 1982, you raise interest rates. You don't destroy labor bargaining power and reduce workers to slaves like Reagan and conservatives since have done. You keep the same system you had from the 1930s through the 1970s, but you just hit the reset button by creating a temporary recession to reset the economy. Just turn it off and on again in that sense. And then the economy will expand naturally.
Essentially higher interest rates would stop businesses from wanting to hire as much, which would create more unemployment, but if people don't want to work crap jobs, then maybe we shouldn't be creating crap jobs. These guys want growth at the expense of everyone else, even if it means reducing workers to slaves. Rather, I believe the economy should serve people, people shouldn't be slaves to the economy so maybe we don't need so many jobs so fast.
Reaganism, and conservatism lead to an economy where you have all of this growth, but it all goes to the top, because the workers are treated like crap and the wealth gets siphoned up to the shareholders. Conservatives are very inflation conscious...at the expense of the working class. When the working class demands a living wage, they get upset, because their millions are worth a little less, and because wealth is more evenly distributed.
I would go so far to say a little extra inflation, only a little mind you, say, 3% instead of 2%, which is what we're at right now is a good thing if it means that the working class is more healthy, has higher wages, and is more free to avoid crap jobs.
Also, wanna mention we are in the middle of unprecedented times, and we still have unemployment, so it's not like they can't hire more workers, they just refuse to because the pay is crap. Yes, unemployment is a bit excessive at disincentivizing work, but that doesn't mean we shouldn't have unemployment. It means unemployment should be replaced with a UBI.
So...you are okay with more inflation?
To some extent, yes. If we see legit wage price spirals and 1970s like conditions that last more than a couple months and aren't explicitly caused by a pandemic or other problems like oil shortages, yeah, my policies might be overkill, but I actually believe in the phillips curve to some extent and believe that a lot of the time our economic policy is too inflation conscious at the expense of the working class. I would be okay with a 3% target rather than 2% target. If we see inflation above 4% persistently, that's a problem and we should slam the brakes on the economy a bit, but we can do that through the fed raising interest rates, not screwing workers and forcing them into wage slavery.
Beyond that though, I don't believe Biden's policies make up the bulk of the problem. The oil hack and getting back to normal from this crazy pandemic economy are the real problems. Just as the pandemic setting in created a deflationary crisis, getting back to normal is creating an inflationary crisis.
It's a lot like driving a car. If you slow down and speed up gradually, no one in the car feels it much. If you slam on the brakes or hit the gas and accelerate all at once, you feel it more. That's what we're dealing with. We're slamming the gas after hitting the brake and now stuff in the car is flying all over the place. Let the car normalize its speed, and we should be good to go.
Conclusion
I just felt like I should address this because the right is going to use these conditions to argue against Biden's mildly left economic policy and argue for austerity and right wing policies. And given how dumb most of America is, they will believe them. I mean, looked what happened with Reagan.
The fact is, Biden is not responsible for 90% of the economic issues we are facing right now. It's just a complex mix of that pipeline hack, and complications from the economy reopening. Everything is happening at once and it's shocking the system.
Also, I don't want the right to have the moral high ground on the "work" thing. They're gonna spin this to claim giving workers money to not work is bad and this is why we need people forced to work for low wages. This wouldn't even be a problem if not for the post pandemic spikes causing problems. As Kyle Kulinski recently said, if Biden did nothing we would still be in a recession losing jobs if anything, the right would still be blaming him. The right is going to blame Biden no matter what he does, even temporarily moving left of them like Trump tried to do with $2000 checks. Heck, Trump was pushing checks and we had expanded unemployment last year and we didn't have this stuff happen. So what's really at fault? Progressive policies or the economy being the economy?
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