Finally, Kamala has shown her true colors. She is a socialist Marxist and believes that the people actually exist to serve the government and not the other way around. Calling out major food processing and grocery companies for “gouging” consumers is typical of people who don’t understand basic economics.
Yes, consumer and producer prices are up.
Yes, inflation has increased input costs to producers who then pass those costs on to customers. Major grocery companies like Kroeger and Albertsons have seen their operating costs go up faster than the prices they charge customers thus causing their “margins” to go down from less than 5% to less than 2%.
Here is a truth that every economist will agree to. It is inflation that causes increased prices, and not increased prices that cause inflation. Kamala and her advisors don’t understand this basic fact.
The cause of inflation is too much money chasing too few goods and services. The Law of Supply and Demand has never been understood by progressive Marxist, who still believe in The Labor Theory of Value. They can never name a single instance where price controls, rent controls, production quotas have led to anything but chaos in the long run. In both the Soviet Union under Lenin and in China under Mao, the starvation of over 200 million people who were all promised that command and control was the way to utopia seems to have been forgotten by many of their acolytes.
The Inflation Reduction Act cost well over $1.6trillion in tax rebates and tradeoffs to green energy companies that have failed miserably in their promise of decreasing greenhouse gases—too much money chasing too few goods and services. Today they account for less than 20% of all energy produced in our country and that counts hydroelectric power that was well developed 50 years ago.
In a recent August 15th Wall Street journal article by the Editorial Board the true economic conditions that Joe Biden Inc. inherited are not what is being described by Kamala and her mainstream media sycophants:
“President Biden claims that he inherited the worst economy since the Great Depression, but this isn’t close to the truth. The economy in January 2021 was fast recovering from the pandemic as vaccines rolled out and state lockdowns eased. GDP grew 34.8% in the third quarter of 2020, 4.2% in the fourth, and 5.2% in the first quarter of 2021. By the end of that first quarter, real GDP had returned to its pre-pandemic high. All Mr. Biden had to do was let the recovery unfold.”
In March of 2021 Biden Inc. used Covid as an excuse to pass another $1.9billion relief package. State and local government received almost a third of this money. K-12 Education received $122billion, and insolvent union pension funds, mostly government unions, received almost $90billion! I say again—Too much money chasing too few goods and services.
The Federal Deficit for each of the past 2 years has been over a trillion dollars—more than our military spending for those two years. The Federal debt is a burden that our children will begin paying off as soon as they enter the work force with an ever-increasing percentage of Federal Tax Revenues being used to simply pay off the interest on the debt.
So now the same Yahoos who have placed us in this economic “pickle” have a plan to subsidize home buying, cut out “gouging” by producers and processers of food and they have yet to tell us how you can “gouge” a consumer when ones operating margins are less than 2%.
Here is an idea. Instead of a plan to put a cap on what suppliers can charge in the marketplace, how about putting a cap on what the government can spend(?)!
I will state one last time that inflation is caused by too much money chasing too few goods and services. Inflation causes increased prices, not the other way around.
One final point would be to understand that inputs to producers could be cut by a significant amount in our country, estimated to be 30-40% by opening up the energy sector—specifically allowing oil and natural gas markets to compete in under more natural and mature economic conditions.
Progressive-socialist economic theories have never worked in our country or any other country. Why should we trust those theories that have failed so miserably? The Keynesian economic theories that have never ever worked will never work today or tomorrow.
The best way forward is to unleash the private sector. The regulatory and tax burden on businesses places a head wind on capital production. Economic growth can only happen when the private sector is allowed to create and develop goods and services with limited frictions and encumbrances. By confiscating a bigger piece of the private sector pie with increased taxes and regulations that discourage risk and investment in equipment and property, the ability for the government to pay for itself will increasingly become more problematic.
In the end, it is the private sector that funds the government. Government cannot invest in itself—the government never really invests in anything. It transfers and acts as a conduit for the redistribution of capital that it did not create itself. If the private sector doesn’t thrive, then our government won’t be successful.
Kamala Inc. doesn’t get it.
It would be far better if citizens could legally “gouge” our government, than for the government at all levels to keep “gouging” us.
