Do Dems Seriously Want to Fight Inflation?

 

Lesson One: The Republicans are out fighting culture wars and imposing extremist evangelical mandates. For those who believe in these values, the Christian nationalists with more than a few antisemitic white supremacists in the mix, there is absolutely nothing short of embracing these views wholeheartedly that the Dems can do to reverse that vote. Republicans might not have any solutions to real problems, most notably rising crime rates and inflation, but they are happy to stick “failure” labels on Dems for not fixing those issues. Evangelical support of Israel is hardly altruistic. Armageddon, which triggers the “Rapture” and the “Second Coming of Christ,” requires a global war of annihilation that must begin in the Middle East, where only evangelicals survive. Only a strong Israel, in their view of the Bible, can trigger that prophecy.

Lesson Two: Stalwart Republican voters are so immutably locked into their beliefs that contrary facts are totally irrelevant. So, stop trying to argue with them. That there will be more impoverished mouths to feed with serious negative long-term consequences, if Roe v Wade is truly reversed and purged in red states, is irrelevant. That rising crime rates are directly proportionate to increasing penetration of semiautomatic weapons under lax gun control laws, and the cartels south of the border have power only because of masses of illegal guns which drives terrified victims to our border seeking asylum, is equally ignored.

Bottom line: Joe Biden’s carefully avoiding significant reversals of Trump imposed policies so as not to generate Republican opposition is beyond stupid. The only serious solutions to high crime rates, immigration reform and inflation require reversing Trump policies in each of those arenas. So, if we follow a most basic political credo – “It’s the economy stupid!” – Dems have a very short window to make a difference before the mid-terms.

Political columnist, Fareed Zacharia, writing an OpEd for the May 19th Washington Post, explains the effective economic response very directly: “As a reminder, a tariff is a tax on goods paid by the U.S. consumer who buys those goods. It is by definition inflationary; it raises the price of a good such as an imported car. But it causes even more inflation than that, because it raises the price of the domestically made equivalent goods as well. If a Mazda sells for more, then Ford and General Motors also tend to raise prices on their cars… The reverse logic applies as well. If you cut tariffs, that also has a broader effect: When the Mazda gets cheaper, Ford and GM will cut prices to compete.

“In March, the Peterson Institute for International Economics produced a study estimating that reversing most of the Trump tariffs would reduce inflation by 1.3 percentage points. Lawrence H. Summers, a Post contributing columnist who has been prescient on many things in this economic crisis [and an American economist who served as the 71st United States Secretary of the Treasury from 1999 to 2001 and as the 8th Director of the National Economic Council from 2009 to 2010. He also served as president of Harvard University from 2001 to 2006], endorsed that study, concurring that trade barrier reduction was the single biggest microeconomic measure ‘by far’ that could be taken to alleviate inflation in the near term.

“The second one, he noted, would be immigration reform. This is the time to reverse more of Trump’s restrictions on immigration, many done by executive action and hundreds of which are still in effect, which have caused severe worker shortages in industries such as farming, construction and health care.” So where are the obvious breakpoints?

China: Like or not, over 18% of the global economy is driven by China. High tariffs imposed by the Trump administration have made prices of virtually all manufactured goods (regardless of the country of origin) more expensive right here in the United States. We have lots of horse-trading issues to exchange with China, including restraining their support of Russia during the Ukraine war, Taiwanese territorial integrity (which Biden pushed hard on in his Asia trip), opposing their militarization of and claims in South China Sea, and protecting American intellectual property from illegal appropriation. Our market is huge, and lowering tariffs both ways cuts inflation big time. Trade, Joe, trade!

Iran: In 2018, when Trump withdrew from the six-nation accord aimed at containing Iran’s ability to enrich weapons-grade plutonium, every one of our intelligence agencies informed the President that the treaty was working. Iran soon resumed its enrichment program despite additional US sanctions. Remember, Russia was providing 12% of the global oil production (about even with Saudi Arabia) before the Ukraine invasion. Those exports have been sanctioned by 37 nations, under US leadership. Meanwhile, also under US sanction, Iran possesses 13% of global oil reserves and produces over four million barrels per day, accounting for 4% of total global output. It is capable of producing much more. Iran has signaled a willingness to re-engage in talks aimed at limiting its military ability to generate nuclear weapons in exchange for reduced sanctions. Trade, Joe, trade!

Labor Shortages and HB Visa Relief (H-1B, etc.): Donald Trump slammed the tech industry as well healthcare, construction, and agriculture industries by severely cutting back on the necessary visas for workers that could not be sufficiently recruited within the United States, either because of educational shortages or work Americans just won’t do. Our supply chain suffers from rising labor costs or complete shortages of workers needed to restart a more normalized production/ delivery flow. Get pragmatic about the workers we need. Now!

While there might be lots of immediate negative statements about reversing any of the above sanctions, tariffs and visa limitations, guess how Americans would react to falling prices at the pump, restored supply chain flow and a more sustainable inflation rate. Exactly!

I’m Peter Dekom, and dogmatic policies, particularly those based on xenophobic “go it alone” assumptions (the MAGA world), just will not solve our serious inflation concerns.