Is it Really “Joe Biden’s Inflation?”

Is it really?  Sure, we all know it’s a clever catch phrase designed to inflict damage on the democratic party during an election year, but like most epitaphs it was born to create a perception not to define a reality.

The cause of our current inflation is widely understood to be the perfect storm of supply chain breaks brought about by the covid pandemic, the rise in the price of oil due to the war in Ukraine and crop failures due to shifting climate patterns. For the average person who easily perceives these factors, it could not be more obvious.

What is not apparent is the myriad litany of events going back a decade or more, regulatory, legislative and injunctive, that compile an intertwined history, the foundation upon which the current problems are catalyzed, events both obscure, arcane and little understood by any but those schooled in economics (and maybe not even those.)

Recent studies by the Economic Policy Institute show that 50% of inflation is the result of corporate greed.  Think about it.  Was that Joe Biden’s doing?

In 2013 American corporations, the home of millionaires and billionaires, were recording record profits while middle class Americans suffered. While productivity 1973-2013 was up 74.4% to a total of 243% and compensation for the top 1% grew 138% in that same time period.  CEOs made 296 times what an average worker made and to further sweeten their profits, employers cut health-care benefits by 20%. A more specific breakdown saw middle wages rise only 6% while lower wages dropped by 5%.  So much for trickle-down theory.

Mind you, this was all before Joe Biden.  But wait…. there was still Donald Trump to be unleashed on the American economy.

“Like his boasts about the economy, the former president deftly left out his Administration’s role in the drastic rise in prices that Americans are currently suffering from.

The increase in consumer and producer prices is due to the dramatic explosion of money and credit which took place during the Trump Administration not only in response to the scamdemic, but in the years leading up to it.  In fact, the pandemic was a convenient excuse to inject massive liquidity into a system that began to hemorrhage in September 2019.

In the early months of 2020, the markets began to implode before the unnecessary lockdowns as the air came out of the financial bubble.  This has been ignored by the financial press and Trump himself.

Before the covid hysteria, Trump had repeatedly lobbied for “cheap” money, calling for a renewal of “Quantitative Easing” (QE), reduction in interest rates, and he even spoke about “negative” rates.  The former president threatened to fire Jerome Powell, whom he had picked to head the Federal Reserve, for not reducing interest rates far enough.  Trump complained that President Obama benefitted from the Fed’s accommodative monetary policy and wanted similar treatment to keep the financial bubble going.

Trump’s fiscal policy was also highly inflationary as he ran record deficits long before covid.  His tax cuts and failure to cut government spending led to greater government borrowing, which the Fed was forced to monetize.  Trump was on pace, well before the 2020 lockdowns, to spend more money in four years than Obama spent in his two terms.  By 2019, the deficit had grown to $1 trillion dollars, up $205 billion, 26 percent from 2018.”  (The Royal Examiner)

Wall Street created a loophole almost a decade ago, to escape U.S. regulation of complex financial trades related to commodities like oil and wheat. Then the Trump administration fortified the loophole.

On Tuesday, gas prices hit a record high. Today, the March Consumer Price Index is expected to show overall inflation still running above eight percent.

Republicans are blaming inflation on Pres. Joe Biden and rising wages. Democrats blame corporate price-gougers and Russian Pres. Vladimir Putin. There’s some truth in there: the war in Ukraine and pandemic-related supply-chain issues obviously caused price fluctuations.

But the massive, wholesale run-up of global commodity prices is out of step with the fundamentals of supply and demand, a growing number of analysts say. And functioning futures markets would be buffering against the volatility we’re seeing , and the inflation resulting from it.

In other words, if Putin throws a stone into the oil markets, well-regulated futures markets should smooth it out to a ripple. In a dysfunctional market, Wall Street blows it up into a tsunami. That’s why consumers are now underwater from rising prices on everything from gas to food to the rare minerals in their electronics.

On March 24, Public Citizen Energy Program Director Tyson Slocum wrote that, “The past two years have seen an extraordinary surge in commodities market volatility.” He cites “evidence of excessive [Wall Street] speculation.”

As Antonia Juhasz reported for The Guardian, oil supplies are actually at record highs, and so is trading. And, as Juhasz notes, industry analyst Phil Verleger has said shifts in fundamentals that once might have accounted for changes of a dollar or less per barrel are now leading to spikes of as much as $10 per barrel.

What isn’t widely understood is that this Wall Street speculation didn’t just happen. As regulators began crafting new rules based on the 2010 Dodd-Frank Wall Street Reform Act, Wall Street swung into action, sleuthing out loopholes they could use to smuggle their swaps and derivatives business out of regulatory jurisdictions. They succeeded.

Their solution was so obscure, however, that even Slocum hadn’t heard of it. When I explain how it worked, he says, “Well, that’s interesting…what you’ve just described to me, that seems to be a serious problem.”

That’s what regulators under Pres. Barack Obama thought, too, when they found out about it. But one month after they proposed a rule to fix it, Trump won the presidency. His appointees blocked the fix, and there’s no indication that the Biden White House is even aware of the problem (even though the Obama administration was).”

(The Whistleblower)