{"id":102153,"date":"2022-05-22T16:16:07","date_gmt":"2022-05-22T20:16:07","guid":{"rendered":"http:\/\/www.thedailygouge.com\/?p=102153"},"modified":"2022-05-22T16:16:14","modified_gmt":"2022-05-22T20:16:14","slug":"the-daily-gouge-archive-friday-march-20th-2022","status":"publish","type":"post","link":"https:\/\/www.thedailygouge.com\/?p=102153","title":{"rendered":"The Daily Gouge Archive, Friday, March 20th, 2022"},"content":{"rendered":"

It’s Friday, May 20th, 2022…but before we begin, Jim Geraghty recently offered a little lesson in ECON 101 which is apparently lost on every Progressive in a position of power:<\/strong><\/p>\n

Fighting Inflation: An Explainer<\/span><\/a><\/span><\/h1>\n

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“What causes inflation? Too much money chasing too few goods<\/span>.\u00a0Think back to the old\u00a0Duck Tales\u00a0episode<\/a><\/span><\/em><\/span>. If you had a form of currency that magically replicated itself every few minutes, then not only would you quickly become a millionaire, but everyone else would quickly become a millionaire.<\/span> And when everyone is a millionaire, the value of a particular dollar or currency declines rapidly. Suddenly, the cost of everything would go up, because the amount of goods \u2014 cups of coffee, sandwiches, or gallons of gas \u2014 hasn\u2019t increased at the same rate that the amount of money increased.<\/span> A vendor who kept goods at the pre-inflation price would quickly sell out \u2014 and then face trouble when they tried to restock supplies and faced the increased costs of the store\u2019s suppliers, to say nothing of the difficulty to motivating employees to work who suddenly found themselves millionaires, too.<\/strong><\/span><\/p>\n

If everyone in town suddenly became a millionaire overnight, it would likely set off a race to see who could purchase the most from the same limited supply of highly desired goods.<\/span> If you\u2019re a millionaire, you can head over to the nearest Lamborghini dealership and plunk down the $200,000 or so to purchase a new sports car.\u00a0Lamborghini only makes about 8,400 cars per year<\/a><\/em><\/span>.<\/span> By comparison,\u00a0Toyota makes more than 9 million cars per year<\/a><\/em><\/span>. If everyone in a town became a millionaire, the nearest Lamborghini dealership would sell out quickly \u2014 and those last few models would rapidly increase in price, because demand had exploded (from the town\u2019s previously wealthy to now everyone) while the supply had remained the same.<\/span><\/strong><\/span><\/p>\n

The Biden administration and its\u00a0like-minded allies<\/a><\/span><\/em><\/span>\u00a0are fond of inane arguments that inflation is high because corporations aren\u2019t taxed enough or are greedy. But the thing is, every person and institution who sells you something first has to buy that something from someone else.<\/span> Let\u2019s say you go to the grocery store to buy orange juice, and it\u2019s more expensive than it was a few months ago. It\u2019s not because the grocery store suddenly became greedy.<\/span> The grocery store bought it from, say, Tropicana Brands Group. The Tropicana Brands Group buys oranges from\u00a0roughly 400 Florida orange groves<\/a><\/em><\/span>.<\/span> To grow the oranges, the grove owner and operator\u00a0purchases fertilizers<\/a><\/em><\/span>, as well as water if it isn\u2019t raining enough. The fertilizer company\u00a0buys phosphates from . . . er, Russian<\/a><\/em><\/span>\u00a0suppliers, and well, that sort of thing got a lot more complicated recently.<\/span><\/strong><\/span><\/p>\n

Once a particular commonly used good gets more expensive \u2014 say,\u00a0refined fuels, because six oil refineries shut down in 2019 and 2020, as discussed yesterday<\/a><\/em><\/span>\u00a0\u2014 then those costs keep getting passed from institution to institution. Your grocer is likely paying more to get the orange juice shipped from Tropicana.<\/span> Tropicana is paying more to get the oranges transported from the groves to the processing plant. The orange-grove owner is paying more to get his fertilizer brought to his groves.<\/span> And so on. No one in this process rubbed their hands together, twirled their mustache like\u00a0Snidely Whiplash<\/a><\/em><\/span>, and cackled with glee at the thought of raising prices.<\/span> In fact, everyone in this process probably worried that their consumers would buy fewer of their products because prices were higher.<\/strong><\/span><\/p>\n

This weekend,\u00a0our Kevin Williamson had a good column in the\u00a0New York Post<\/a><\/em><\/span>\u00a0laying out that, while Joe Biden didn\u2019t single-handedly create our current high inflation, he significantly exacerbated it by making the wrong decision at just about every step of the way.<\/span> Kevin wrote that our current mess is \u201cwhat you get when you combine the wrong monetary policy with the wrong fiscal policy, the wrong trade policy, the wrong regulatory policy, and the wrong energy policy.\u201d<\/strong><\/span><\/p>\n

We were probably destined to have supply-chain issues and other economic hiccups as the country emerged from the Covid-19 pandemic.<\/span> But our government worsened the problem<\/em><\/span> by throwing gobs and gobs of new money into the economy, much faster than the country could produce goods.<\/strong><\/span><\/p>\n

…This morning brings word<\/a><\/em><\/span>\u00a0that the Democratic Congressional Campaign Committee\u2019s internal polling \u201cfinds that in battleground districts, the generic Republican is beating the generic Democrat, 47 percent to 39 percent, according to lawmakers, multiple party officials and the DCCC.\u201d<\/span> That is a formula for not just getting wiped out<\/span><\/em> in the battleground districts, but probably seeing at least one<\/em><\/span> seemingly safe House Democratic incumbent ousted in some D+5 or D+6 district.<\/strong><\/span>“<\/p>\n

It’s the same with mandating a minimum wage at any level, as the costs will eventually be passed through to consumers in the form of higher prices for goods and services.<\/strong><\/p>\n

And let’s not forget it was\u00a0the government’s<\/em><\/span>\u00a0utterly unnecessary and completely counterproductive lockdown mandates which created the “supply-chain issues and other economic hiccups” in the first place<\/em><\/span>!<\/strong><\/p>\n

It also bears mentioning, as Jim Geraghty and Dominic Pino note respectively at NRO <\/em>with specific regard to gas prices, no amount of crude oil can help ease fuel shortages in you haven’t the refinery capacity to process it<\/em><\/span><\/a>…which, inexcusably<\/span><\/em>,\u00a0we don’t<\/em><\/span><\/a>!<\/strong><\/p>\n

Now, here’s The Gouge<\/em>!<\/strong><\/p>\n

First up, in a related item, NRO<\/em>‘s Dominic Pino observes…<\/strong><\/p>\n

Defending Biden\u2019s Economic Nonsense Is Hard Work<\/span><\/span><\/a><\/h1>\n

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\"\"<\/a><\/p>\n

“On Friday, President Biden\u2019s Twitter account produced this specimen:<\/strong><\/span><\/p>\n

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It\u2019s phrased as a question-and-answer, but the answer is not<\/em><\/span> in any way related to the question.<\/span> Raising the corporate-income tax (presumably the policy on offer) is not<\/span><\/em> a way to bring down inflation.<\/strong><\/span><\/div>\n<\/div>\n

But there it is, on the president\u2019s Twitter account.<\/span> Presumably<\/em><\/span>, it reflects a view that the president holds. Since it is utter nonsense<\/em><\/span>, and the entire world saw it, one would think the White House would be prepared to answer questions about it.<\/span><\/strong><\/span><\/p>\n

One would think<\/em><\/span>.<\/strong><\/span><\/p>\n

Today, in the first press briefing since that tweet went up, Peter Doocy of Fox News read the tweet and asked the most straightforward question possible: \u201cHow does raising taxes on corporations reduce inflation?\u201d\u00a0<\/span>There\u2019s only one<\/span><\/em>\u00a0correct answer to this question: \u201cIt doesn\u2019t<\/em><\/span>.\u201d But the press secretary is not<\/em><\/span> in the business of giving correct<\/em><\/span> answers.<\/span> The press secretary\u2019s job<\/em><\/span> is to give politically advantageous<\/em><\/span> answers, which often bear little resemblance<\/em><\/span> to correct answers.<\/strong><\/span><\/p>\n

Here\u2019s the answer that press secretary Karine Jean-Pierre gave to Doocy\u2019s question:<\/strong><\/span><\/p>\n

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Watch what happens when Peter Doocy asks the new White House press secretary how raising taxes on the rich brings down inflation, as Biden tweeted last week.<\/p>\n

Big yikes. pic.twitter.com\/UIsACtP8Hv<\/a><\/p>\n

\u2014 John Cooper (@thejcoop) May 16, 2022<\/a><\/p><\/blockquote>\n