When Ronald Reagan denied Jimmy Carter a second term by walloping him in a landslide, I was almost halfway done with high school. I had already developed a keen interest in politics, but, due to age and inexperience, was considerably limited in sufficiently assessing the issues. Nonetheless, when pondering the Misery Index – a combination of the inflation and unemployment rates, which in the Carter years had risen high enough to propel his ouster – I concluded that of those two maladies, inflation is worse.
My reasoning was that even if the unemployment rate is, say, a troublingly high 10 percent, that means 90 percent of Americans are still working. Whereas when prices go up, it negatively impacts 100 percent of Americans.
The basis of that oversimplified analysis makes sense, but over the years I discovered there’s more to it than that. For one thing, folks who aren’t working presumably have less money, and so they tend to spend less. That causes the butcher, the baker, and the candlestick maker to lose money too. And when they, in turn, have less money to spend, they don’t go out to eat as often, or to the movies, and they hold off on buying new cars. Those businesses suffer as well, resulting in a recession, and to another word that got a lot of attention under Carter: stagflation – a combination of stagnation and inflation.
Typically, inflation and unemployment do not occur simultaneously. When the economy is red-hot, it’s easy to raise prices, and there’s no faster way to increase profits. For instance, if your restaurant can seat 50 people for dinner but you have 100 people wanting to eat there, raising your prices by 15 percent (inflation) might deter 20 potential patrons, thinking it’s gotten too expensive. That still leaves 80 people wanting to fill 50 seats, meaning you’ll be packed every night. Typically, if business is great, you’ll have money in your pocket to spend at someone else’s business, making that person wealthier too. And the better businesses do, the more workers they need to hire. Usually. Not always. Not now.
On the other hand, if business is bad, you won’t raise your prices, but you may have to lay off a few workers (unemployment). That’s why inflation usually happens when the economy is booming, and unemployment is often the result of a downturn.
That mutual exclusivity theory seemed foolproof until the 1970s, when the Organization of Petroleum Exporting Countries (OPEC) stopped supplying oil to us. Oil prices skyrocketed worldwide, causing related services (car fuel, heating bills, plane ticket prices, etc.) to become prohibitively expensive too. That triggered inflation, while the short supply of oil caused an economic slowdown resulting in unemployment.
(Thankfully, we don’t have that problem anymore. Thanks to President Trump’s jumpstarting the Keystone Pipeline XL Project, we won’t need to worry about OPEC in the future. Oh, wait, President Biden shut that project down. Never mind.)
Today’s inflation is not a result of foreign entities’ economic warfare. Rather, it’s because we’re printing U.S. currency like it’s Monopoly money, in order to fund astronomical government giveaways. The more dollars in circulation, the less they’re worth. Just like if all the rocks on the beach were made of solid gold, jewelers would be out of business. Why pay for gold when you can just run down to the shore and load it by the bagful for free?
As for unemployment, it’s not that people can’t work, they no longer want to. Over the past 20 months, Americans living in states not named Florida, South Dakota, and Texas actually went on lockdown. Many still work from home. They discovered that when factoring in transportation costs, dry cleaning bills, and eating out all the time, not to mention the stress of commuting, working outside the home isn’t all it’s cracked up to be. Why, you can roll out of bed at 8:45, brush your teeth, comb your hair, and be at that morning Zoom meeting at 9AM sharp. Brilliant! Why didn’t we think of this before?
Besides those still living off their absurdly large unemployment benefits and PPP bequests, there are a growing number of able-bodied, twentysomethings and thirtysomethings with enough money to live quite well for the rest of their lives. They’re the trust fund generation. We live in a capitalist society, and so the rich will always get richer faster than everyone else, and the wealth gap will continue to increase. Doing away with capitalism may sound enticing to the novice thinker, except that socialism and communism are way worse, so we’re stuck with it, warts and all. Get used to it.
That wealth gap produced unfathomably wealthy individuals who married and procreated, leading to a swarm of coddled, self-absorbed, narcissistic young adults who simply don’t need or want a career. But they still have brains, and want to use them, so many expend their intellectual energy desecrating the First Amendment by attempting to shun anyone who disagrees with their latest politically overcorrect idiocy.
Their solution? Raise the minimum wage, of course. Something I might’ve said when Carter was in office – you know, before I turned 16. When they think that employers can afford it, they’re envisioning Amazon and Walmart, not realizing that the overwhelming majority of American businesses are either mom-and-pop shops or slightly larger organizations with very little budgetary wiggle room. They’d have to raise their prices to make ends meet. Some will raise them just for the heck of it, and blame it on Biden.
Eventually, consumers will figure it out and stop going out for a cup of coffee when for the same price they can brew coffee at home all month. Hence, the stagnation to accompany the inflation.
I’m generally not a pessimist, so here’s the light at the end of the tunnel. Whenever you find yourself casting a ballot, make sure to vote Republican. They’re not perfect by any means, but they’re the best we’ve got. Nowadays, by far.