Friday, December 31, 2021

"The U.S. Is a Powder Keg"

"The U.S. Is a Powder Keg"
by Brian Maher

"Inflation is soaring, economic growth is slowing, and the nation is bitterly divided politically between Red and Blue. It is further divided over vaccine mandates. Blue State America favors mandates, Red State America opposes them. There appears to be little middle ground of national consensus, for good or ill. And Americans are rapidly losing faith in the institutions that have held this diverse country together. Add it all up and the U.S. is a “powder keg,” argues Jeffrey Tucker today. Read on."
The U.S. Is A Powder Keg
By Jeffrey Tucker

"I don’t shop at high-end stores with philosophies. I go for el cheapo places that don’t have olive bars and don’t play Schubert on the intercom. I just want the stuff I need at the lowest possible prices. So, I was stunned at the 40% increase in my usual bill I recently received at the cheap place. I thought I was buying in a minimalist way.

Later I looked more carefully at what went wrong. I bought beef and bacon. Beef price increases are now at double-digit rates, and bacon is even higher. You are paying much more per pound than one year ago. Pork and chicken are less, but that could change. Turkeys were in short supply for Thanksgiving. It was the most expensive Thanksgiving meal in our lifetimes. Christmas dinner was no better for most Americans.

Stores don’t tag groceries based on the percentage increases in prices. Those you have to remember from last week and last month. Indeed, stores have every reason to disguise this. Manufacturers too, which is why packaging these days is holding ever less product. This is called “shrinkflation.” It is an epidemic right now, as manufacturers are struggling to survive huge increases in their own costs.

Biggest Inflation Spike in Over 30 Years: We’re currently seeing the biggest inflation spike in over 30 years. Even the Fed has dropped the term “transitory.” And inflation is probably even worse than the official figures show. Meanwhile, the Producer Price Index reveals that the year-over-year change in the index for construction materials has been up almost 20%. And have you looked at gasoline prices? Hopefully not.

Most important here are the monetary effects. All the money that the Fed sloshed up in the last 20 months reduces the value of money or what it can buy. This inflation will never hit all products and all sectors evenly. It moves from sector to sector. But these days the toxin is moving so fast and in so many directions it makes one’s head spin.

Not So Thrifty: We keep hoping each month to get good news. Perhaps the Fed will prove correct that inflation is only transitory. Sadly, that is not likely. They have been way off in their predictions. The Producer Price Index is the one to watch because these price increases get passed on to consumer prices as inventory is depleted.

Clothing is a case in point. We’ve already been facing high prices and shortages on the shelves. This is driving people to the thrift stores. The major headlines are starting to show this. Thrift store prices too are on the increase, as I predicted two months ago. The percent change in the producer prices that go into making polyester clothing is now up something like 25%.

Even if monetary policy is fixed, even if supply chains are repaired, even if the clogs at the dock are unclogged, it will be months before this figures into consumer prices. Sadly, there is almost no chance that any of these good changes happen, meaning that these higher and higher prices are here to stay.

A Broken State: As I’ve mentioned before, there is something about American political culture that is especially averse to inflation. People frankly hate it, especially since we’ve lived 40-plus years without consumer inflation being a particularly pressing problem. Now looking at price trends creates shock and even hatred. It is hitting the Biden administration particularly hard. Biden’s approval rating is absolutely tanking. His approval ratings are historically bad. We can speculate why. Inflation plays a role. But also the vaccine mandate seems to have hit the Biden approval rating very hard. His Tuesday speech did nothing to change perceptions.

In the coming month, millions of jobs could be affected by this. The protests are growing in every city, and the people protesting are union members, city employees and even tech workers. They are furious that the government would presume the right to tell people what medicines they must inject into their bodies, especially when triple-vaxxed people are coming down with the omicron variant.

Think of what they’re saying: The government wants to punish the unvaccinated, even though the triple-vaxxed are still catching the virus. They say the vaccinated are less likely to be hospitalized or die, but data from around the world indicates that the omicron variant is pretty much benign, even for the unvaxxed. For most, it amounts to a mild cold.

But politicians are once again looking to lock down society, based on a minimal threat. You have to wonder why. The good news is that we still have a vestige of federalism in this country, unlike most European nations. The courts have ruled that many of these vaccine mandates are unconstitutional. The administration continues to fight back, of course. But individual state governments are a bulwark against federal overreach.

Yet the Biden administration has gone completely lawless, not just ignoring the U.S. Constitution but also advocating that businesses ignore the courts. That’s dangerously close to announcing that we now live with dictatorship. It’s no wonder that even Sen. Ted Cruz of Texas is talking about secession from the union. If he is saying this, I truly cannot imagine the kind of anger there is among the citizens.

If you wanted to live in exciting times, you chose a great time to be alive. The conditions are ripe not only for continuing electoral bloodbaths but more street protests, explosive town halls, hate-filled school board meetings and much worse. A more divisive and destructive policy is hard to imagine.

Sadly, these policies are dividing friends and family. Some people with vaccinations don’t see the big deal here. Just get the jab, they say, and then you can be free. Others find this idea to be outrageous, an immoral acquiescence to power that can only lead to even worse outcomes.

Powder Keg: Yet many politicians and their bureaucratic lackeys continue to push the vaccines that most everyone knows by now have failed to live up to their promise. Indeed, if the vaccines were as good and safe as they say, the government wouldn't need to mandate them. The mandates, ironically, undermine public confidence. It’s hard to imagine that public confidence in everything could fall further, but it will. To top it off, making all the above much worse, they’re mandating vaccines for the kids. You want revolution in this country? This is a good way to foment one.

The U.S. has become a powder keg. Only time will tell if it blows."

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