Posts

How Biden Raised Gas Prices Without Anyone Noticing

  • U.S. pump prices have surged throughout President Joe Biden’s tenure in office, even as Democrats continue to blame the spike on Russia’s invasion of Ukraine and Big Oil companies.
  • The average price of gasoline nationwide increased a whopping 48.4% between Biden’s January 2021 inauguration and Feb. 21, three days before Russian President Vladimir Putin invaded Ukraine.
  • “We haven’t had a federal lease sale in North Dakota in over a year,” Republican North Dakota Rep. Kelly Armstrong, a member of the House Energy and Commerce Energy Subcommittee, told the Daily Caller News Foundation in an interview. “These are real things — that you are sending signals, not just to energy companies, but also to Wall Street.”

President Joe Biden and Democrats have blamed the continued gasoline price surge on Big Oil and Russia’s invasion, but pump prices have climbed throughout his tenure.

While Russia’s invasion of Ukraine has destabilized global energy markets, causing an historic supply crunch, high gasoline prices have been the norm throughout Biden’s first 14 months, federal data showed. Experts have blamed the high prices on the administration’s energy and climate policies disincentivizing domestic fossil fuel production.

Since Russia’s invasion, gasoline prices have increased more than 20%, from $3.53 per gallon to $4.24 per gallon, according to the Energy Information Administration. However, pump prices increased a whopping 48.4% between Biden’s January 2021 inauguration and Feb. 21, three days before Russian President Vladimir Putin ordered troops into Ukraine.

Democrats and the White House initially blamed Russia for the entirety of the price increases, calling it “Putin’s gas price hike,” before also accusing oil companies of profiteering off the crisis.

“While there is no denying that Putin’s war has led to instability on global energy markets, I remain concerned that the oil industry is not doing enough to protect American consumers from rising gas prices,” House Natural Resources Committee Chairman Raúl Grijalva wrote to Big Oil executives on March 18.

However, fossil fuel industry groups and Republicans have slammed the Biden administration for its long string of policies dating back to the president’s first day in office. They accused Biden of waging a war on fossil fuels, causing decreased capital flows to domestic projects.

“The United States has shown its global energy dominance over the past decade,” Independent Petroleum Association of America COO Jeff Eshelman told the Daily Caller News Foundation in February. “Unfortunately, this has been threatened by the current Administration’s policies against domestic natural gas and oil production.”

“Make no mistake, natural gas and oil production here at home benefits not only our nation, but also our worldwide allies,” he added. “For America, it means less reliance on oil imports from unfriendly countries.”

Among Biden’s first actions as president was to revoke the Keystone XL pipeline’s federal permit, which would have transported more crude oil into the U.S. from Canada. The administration also abandoned the Willow Project, a significant oil and gas project in Alaska approved by the Trump administration that would have produced 100,000 barrels of oil per day.

After a federal judge ordered the Biden administration to halt its attempted ban on new federal land drilling leases, the Department of the Interior has dragged its feet and defied multiple court-ordered deadlines to restart the program. The Interior Department also chose not to appeal a recent ruling that prohibited an offshore drilling lease in the Gulf of Mexico the agency facilitated in the fall.

Further, the administration hasn’t developed a new five-year federal leasing program — which is needed to plan future lease sales — to replace the current one which expires in late June 2022according to a Congressional Research Service report from December. The most recent offshore lease sale occurred in 2020 during the Trump administration.

Overall, there are just 601 oil and gas drilling rigs active in the U.S., the latest government data showed. The number of rigs peaked under the Trump administration in 2018 when there were 1,032 active.

The U.S. is also on track to again become a net importer of oil in 2022 after briefly reaching net exporter status in 2020. The U.S. became a net exporter of total energy in 2019, factoring in oil, coal and natural gas trade, for the first time in 75 years.

“We haven’t had a federal lease sale in North Dakota in over a year,” Republican North Dakota Rep. Kelly Armstrong, a member of the House Energy and Commerce Energy Subcommittee, told the DCNF in an interview. “These are real things — that you are sending signals, not just to energy companies, but also to Wall Street.”

“(Drilling projects) take several years to do and a ton of capital the raise,” he continued. “How are you going to do that when you have an administration basically signaling that they want nothing to do with oil and gas?”

North Dakota produced 1.1 million barrels of oil per day in 2021, the third-largest statewide output, according to federal data.

AUTHOR

THOMAS CATENACCI

Energy and environment reporter.

RELATED TWEET:

RELATED ARTICLES:

‘Slap In The Face’: Dems’ Solution To High Gas Prices Is More Stimulus Checks

Biden Administration Backtracks On Media Reports Signaling Oil, Gas Leasing Resumption

Biden Administration’s Offshore Oil Leasing Policy Will Crush American Energy Security, Experts Say

Police Advise People In Texas Town To Lock Gas Caps

‘Shortfall’: Trump Energy Secretary Casts Doubt On Biden Gas Deal With EU

EDITORS NOTE: This Daily Caller column is republished with permission. ©All rights reserved. Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.

Americans Can’t Afford Gas, Congress Just Gave Itself a 21% Raise

The $1.5 trillion omnibus bill has plenty of inflationary spending, and the honorable members of the legislature didn’t leave themselves out.

As part of the $1.5 trillion omnibus spending bill released Wednesday, the $5.9 billion fiscal 2022 Legislative Branch funding portion would substantially boost the office budgets of House members to pay staff more…

This legislation would provide $774.4 million for the Members Representational Allowance, known as the MRA, which funds the House office budgets for lawmakers, including staffer salaries. This $134.4 million, or 21 percent, boost over the previous fiscal year marks the largest increase in the MRA appropriation since it was authorized in 1996, according to a bill summary by the House Appropriations Committee. For paid interns in member and leadership offices, the House would get $18.2 million.

It’s not technically a pay hike for congressmembers, but, in particular House members, are notorious for putting family members on the payroll. And for using staffers to run their errands and handle assorted personal projects for them.

In August, Speaker Nancy Pelosi announced staffers’ salaries could exceed those of lawmakers. Members in both the House and Senate, with the exception of leadership, make an annual salary of $174,000. Staffers can make up to $199,300.

That’s convenient since it can act as a pay hike without the negative press.

MRAs tend to be between $1.2 and $1.4 million. A massive MRA increase has all sorts of political and potentially personal benefits. It’s also completely indefensible during an economic crisis.

House Dem leaders are cheering the disgusting pork sandwich as a victory for diversity.

House Majority Leader Steny H. Hoyer (MD-05) and House Democratic Caucus Chair Hakeem Jeffries (NY-08), released the following statement this morning on the inclusion of a 21% increase in Member Representational Allowance (MRA) funding in the Fiscal Year 2022 Omnibus legislation.

Leader Hoyer and Chair Jeffries have long advocated for this increase to the MRA in order to ensure that Members, leaders, and committees can attract and retain the best and brightest to help them serve the American people while promoting a more diverse workforce.

Is there any obscenity that can’t be justified in the name of diversity?

“We join in thanking Chairwoman DeLauro and Ranking Member Granger as well as the Members on the Appropriation Committee for producing a bipartisan omnibus package that includes this increase in office budgets so that Congressional staff pay can be a priority and enhance this institution’s ability to deliver For the People.”

For the People.

Ask not what Congress can do for you, ask what you can do for Congress.

COLUMN BY

RELATED VIDEO: Nancy Pelosi Comforts Zelensky With an Offer of Help From … Billie Jean King

RELATED ARTICLES:

Biden: ‘Putin just decides he’s gonna invade Russia’

Capitol Police Funding Went From $375,000,000 to $602,000,000

Canada: Trudeau rejects Zelensky’s request for no-fly zone over fears of Russian escalation, says he’s heartbroken

Saudis, Emiratis Alarmed by U.S. Capitulation to Iran

EDITORS NOTE: This Jihad Watch column is republished with permission. ©All rights reserved.

Inflation Soars To Another Four-Decade High

The Consumer Price Index (CPI) increased 0.8% in February, bringing the key inflation indicator’s year-over-year increase to 7.9%, the U.S. Bureau of Labor Statistics (BLS) reported.

The CPI reached another four-decade high throughout February, with prices increasing nearly 8% on a year-over-year basis, the BLS reported Thursday. Economists surveyed by The Wall Street Journal projected the index to have grown just 7.8%.

The core price index, which measures inflation of goods less food and energy, increased 0.5% in February, the BLS reported. Food prices reportedly grew 7.9% on a year-over-year basis as of February, the BLS reported, and energy prices soared 25.6%.

Economists projected inflation would ease in the spring, when the Federal Reserve begins its interest rate hikes, but Russia’s invasion of Ukraine has threatened higher prices, especially in energy, wheat and precious metals, the WSJ reported.

“We thought that inflation would come down, especially due to the untangling of the global supply chain, but we don’t know how what’s happening in Ukraine will re-tangle that,” Joel Naroff, chief economist at Naroff Economics LLC, told the WSJ.

Federal Reserve Chairman Jerome Powell expects the central bank to raise rates by one-quarter of a percentage point after its March 15-16 meeting, according to the WSJ.

“I do think it’s going to be appropriate for us to proceed along the lines we had in mind before the Ukraine invasion happened,” Powell said, the WSJ reported. “In this very sensitive time at the moment, it’s important for us to be careful in the way we conduct policy simply because things are so uncertain and we don’t want to add to that uncertainty.”

COLUMN BY

HARRY WILMERDING

Contributor.

RELATED ARTICLE: Toilet Paper Prices Soar As Companies Shrink The Item Itself

EDITORS NOTE: This Daily Caller column is republished with permission. ©All rights reserved. Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.

Inflation Is Costing Households $250/Month, Moody’s Analysis Finds

As economist Ludwig von Mises colorfully put it, inflation is when ‘money, like chocolate on a hot oven, [is] melting in the pockets of the people.’


Inflation is making headlines again this week. The federal government’s latest data show that consumer price rose 7.5 percent from January 2021 to 2022. That’s the highest rate of price inflation we’ve seen in nearly 40 years!

What does this mean for everyday American families?

new analysis from Moody’s Analytics reports that the average US household is paying an additional $250 a month thanks to this inflation.

“A lot of people are hurting because of high inflation,” Moody’s senior economist Ryan Sweet told the Wall Street Journal. “$250 a month—that’s a big burden. It really hammers home the point of ‘what is the cost of inflation?’”

This disturbing revelation brings into focus something we already knew about inflation: it hurts the working class the most. While $250 a month is hardly a noticeable increase for millionaires, that could easily strain a working-class or even middle-class family’s budget past its breaking point.

Price inflation also erodes Americans’ hard-earned savings in a way that’s just as painful as the government directly hiking their taxes. As economist Ludwig von Mises colorfully put it, inflation is when “money, like chocolate on a hot oven, [is] melting in the pockets of the people.”

That’s exactly what we’re living through. But this leaves us with a more important question: Why are we seeing this surge in consumer prices? Is it some abstract economic phenomenon beyond our control? Is it due to “corporate greed?”

On the contrary, inflation directly traces back to decisions made by our elected (and unelected) government officials.

“The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague,” Mises famously explained. “Inflation is a policy.”

The primary cause of today’s inflation is the decision by the Federal Reserve, America’s central bank which controls the US dollar, to create trillions of new dollars out of thin air to ostensibly “stimulate” the economy during the pandemic.

Federal Reserve Chairman Jerome Powell openly admitted as much in an interview with CBS.

“[Is it] fair to say you simply flooded the system with money?” a reporter asked.

“Yes,” he responded. “We did. That’s another way to think about it. We did.”

“Where does it come from? Do you just print it?” the journalist followed up.

“We print it digitally,” Powell replied. “So as a central bank, we have the ability to create money digitally… that actually increases the money supply. We also print actual currency and we distribute that through the Federal Reserve banks.”

To understand what “flooding the system with money” looked like, just consider the following graph of the money supply—and how dramatically it soared at the start of 2020.

CLICK HERE TO VIEW MONEY SUPPLY GRAPH

How does increasing the amount of money out there lead to higher prices?

As FEE economist Peter Jacobsen has explained, “If more dollars chase the exact same goods, prices will rise.”

We’re watching this Econ 101 lesson play out before our eyes. And it’s a painful lesson indeed for the millions of American families that have hundreds more out of their monthly budgets just to tread water. Here’s hoping our policymakers learn from their mistakes before it even gets worse.

WATCHBrad Debunks the WORST Inflation TikToks

COLUMN BY

Brad Polumbo

Brad Polumbo (@Brad_Polumbo) is a libertarian-conservative journalist and Policy Correspondent at the Foundation for Economic Education.

RELATED ARTICLES:

Analyst Warns Warmer Weather will Send Gas Prices Soaring ‘A Lot Higher’

New Hampshire Is the Freest State in America. Here’s Why

EDITORS NOTE: This FEE column is republished with permission. ©All rights reserved.

Biden Celebrates Thanksgiving At Billionaire’s Compound As Normal Americans Struggle Through Inflation

President Joe Biden will spend his Thanksgiving holiday at a private billionaire’s compound as inflated costs continue to surge for lower and middle class Americans.

The president landed in Nantucket, Massachusetts, on Tuesday where he is expected to celebrate Thanksgiving with Carlyle Group co-founder David Rubenstein, according to Fox News. The Biden family has spent the holiday on the island for several decades, but canceled their plans in 2020 due to the COVID-19 pandemic.

Meanwhile, the price of the average Thanksgiving dinner has risen more than 14% from the previous year, according to the American Farm Bureau Federation’s annual Thanksgiving dinner cost survey. The report further shows that the average Thanksgiving dinner for six people will cost an approximate $53.31, with the cost of turkey alone skyrocketing by 24% in comparison to the previous year.

A recent Trafalgar poll revealed that 52% of Americans say inflation forced them to change their holiday plans in accordance to the rise in food prices and shortages.

House Minority Leader Kevin McCarthy criticized the president’s Nantucket holiday Wednesday by pointing to the average American’s struggle with inflation during the Thanksgiving holiday.

“Dear President Biden, while you are in Nantucket, enjoying your meals at a billionaire’s compound, here are the prices that Americans are paying for their Thanksgiving dinner-the most expensive one in history,” he wrote.

The country has witnessed its highest inflation levels in the past three decades, with the Consumer Price Index reaching 6.2% on a year-over-year measure. Food companies’ quarterly profits have fallen significantly as a result of inflation, labor shortages and supply chain issues, forcing them to increase the price of their meat, grain and steel can products.

The U.S. has suffered a shortage of oil production that caused gas prices to stand at an average of $3.40 per gallon, hitting its highest Thanksgiving week level since 2012, according to new data from the Energy Information Administration (EIA).

To resolve the current rise of inflated gas prices, Biden ordered the Department of Energy Tuesday to release 50 millions barrels of oil from the U.S. Strategic Petroleum Reserve, which will reportedly provide 2-3 days worth of U.S. oil supply.

White House press secretary Jen Psaki told White House Fox News correspondent Peter Doocy that a “20 pound turkey” is not significantly pricier than in the past during Tuesday press conference.

“There are an abundance of turkeys available, they’re about $1 more for a 20 lb. bird, which is a huge bird if you’re feeding a very big family,” Paski said. “And that’s something that again, we’ve been working to make sure people have more money in their pockets to address it as the economy is turning back on.”

COLUMN BY

NICOLE SILVERIO

Contributor.

RELATED VIDEO: Rep. Crenshaw: This Administration Has Become a Joke and Inflation Isn’t Going Away Anytime Soon

RELATED ARTICLES:

Forgo The Turkey’: NBC Host Suggests Not Buying Thanksgiving Bird This Year As Prices Rise

Thanksgiving Gas Prices Hit Highest Level Since 2012

Over 75% Of Americans Say Inflation Is Affecting Them Personally, Poll Shows. Nearly 60% Blame Biden

EDITORS NOTE: This Daily Caller column is republished with permission. ©All rights reserved.

DeSantis blasts Biden, calls inflation a ‘huge problem,’ pledges gas tax relief

Nobody is fighting harder for the American people than Governor Ron DeSantis. DeSantis is taking on the Biden Administration at every turn, as he prepares for a possible run at the presidency in 2024. If President Trump can’t run for POTUS in 2024, than Governor DeSantis is unquestionably our candidate. And the Democrats should be very concerned about Joe Biden sharing a debate stage with the great governor. #DeSantis2024!

DeSantis calls inflation a ‘huge problem,’ pledges gas tax relief

By Local10.com, November 22, 2021

Gov. Ron DeSantis said Monday that the state legislature will pursue gas tax relief for Florida residents, calling inflation a “huge problem.”

At a news conference Monday morning in Daytona Beach, accompanied by the state’s Department of Transportation Secretary Kevin J. Thibault, DeSantis placed the blame on “inflationary policies out of Washington.”

“The price of a Thanksgiving dinner is up over 20% just over last year,” DeSantis said. “I think what’s most dramatic, because it affects most people in their daily lives, is gas prices going up.”

The average price for a gallon of regular unleaded gasoline in the state jumped 10 cents in the middle of last week to $3.36, according to the American Automobile Association, the highest price at any point since September 2014. It sat at $3.35 on Monday morning, six cents below the national average of $3.41.

https://twitter.com/GovRonDeSantis/status/1462810131624779776?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1462810131624779776%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fgellerreport.com%2F2021%2F11%2Fdesantis-blasts-biden-calls-inflation-a-huge-problem-pledges-gas-tax-relief.html%2F

RELATED TWEET:

EDITORS NOTE: This Geller Report column is republished with permission. ©All rights reserved.

Quick note: Tech giants are shutting us down. You know this. Twitter, LinkedIn, Google Adsense, Pinterest permanently banned us. Facebook, Google search et al have shadow-banned, suspended and deleted us from your news feeds. They are disappearing us. But we are here. We will not waver. We will not tire. We will not falter, and we will not fail. Freedom will prevail.

Subscribe to Geller Report newsletter here — it’s free and it’s critical NOW when informed decision making and opinion is essential to America’s survival. Share our posts on your social channels and with your email contacts. Fight the great fight.

Follow me on Gettr. I am there. It’s open and free.

Remember, YOU make the work possible. If you can, please contribute to Geller Report.

‘Will Not Fix The Problem’: Biden Releasing Oil Reserves Due To Politics, Critics Say

  • President Joe Biden’s decision to tap the U.S. Strategic Petroleum Reserve (SPR) was derided by top GOP lawmakers and experts who said the move was political and won’t move the needle on gasoline prices.
  • “Even if the economic reality of five or maybe 10 cents a gallon of short term impact isn’t that big of a deal, doing nothing might look like a really big political problem,” Kevin Book, a National Petroleum Council member and managing director of ClearView Energy Partners, told the Daily Caller News Foundation.
  • The federal government will release 32 million barrels of oil from the SPR and accelerate the release of 18 million barrels that had already been congressionally mandated, the White House announced Tuesday.
  • “This very temporary measure is not going to solve the supply issue at the pump nor is it a solution to gas prices that have doubled in the last year,” Rep. Fred Upton, the top Republican on a House energy subcommittee, told the DCNF.

President Joe Biden’s decision to tap the U.S. Strategic Petroleum Reserve (SPR) was derided by top GOP lawmakers and experts who said the move was political and won’t move the needle on gasoline prices.

The federal government will release 32 million barrels of oil from the SPR and accelerate the release of 18 million barrels that had already been congressionally mandated, the White House announced Tuesday. Biden’s move to release crude oil from the nation’s emergency reserves was made alongside China, India, Japan, South Korea and the U.K., marking the first internationally coordinated release of emergency oil reserves.

However, experts suggested that the action was likely a political reaction to ever-rising prices at the pump and said it wouldn’t have a significant long term effect.

“It’s possible to say, ‘okay, this is something that politically, if not economically, requires intervention.’ The problem might be that, actually they started talking about doing something back in August,” Kevin Book, a National Petroleum Council member and managing director of ClearView Energy Partners, told the Daily Caller News Foundation.

“The White House was aware of these rising prices and concerned about them, and started taking steps towards intervention and created an expectation for intervention,” he continued. “So, even if the economic reality of five or maybe 10 cents a gallon of short term impact isn’t that big of a deal, doing nothing might look like a really big political problem.”

Book added that the release would have a minimal effect on oil prices, which had already declined over the last several weeks as reports of such a move became public. The price of oil is expected to decrease in the next couple of months due to normal seasonal market fluctuations, according to Book.

A Goldman Sachs report published last week echoed Book’s comments, arguing that tapping the SPR is a “short-term fix to a structural deficit” and was already priced-in to the market. Oil prices may even increase more than expected due to the move, the report concluded.

Biden even acknowledged that he doesn’t have a near-term fix for higher prices and that tapping reserves would barely have an effect during a CNN town hall in October. His administration has mulled an SPR release for months.

But, like Book, Chamber of Commerce Global Energy Institute Senior Vice President Christopher Guith said Tuesday that the White House should focus on long term policies rather than “ineffectual band aids.”

‘A cynical move’

Biden, meanwhile, has faced heavy criticism for his administration’s anti-fossil fuel actions, which include revoking the Keystone XL pipeline permit and banning new oil and gas leases on federal lands. While the president has set ambitious clean energy goals, gasoline prices have risen to their highest level in nearly a decade, government data showed.

Gas prices are tightly tied to the price of crude oil.

“This very temporary measure is not going to solve the supply issue at the pump nor is it a solution to gas prices that have doubled in the last year,” Michigan Rep. Fred Upton, the top Republican on a House energy subcommittee, told the DCNF.

The SPR was established in the 1970s as a tool to help the U.S. survive future energy crises where the global supply of oil dried up. The total inventory is estimated at around 604 million barrels of oil which is kept in deep underground storage caverns in Texas and Louisiana.

The last time the U.S. tapped the SPR was in 2011 when former President Barack Obama ordered a strategic release amid the Libyan civil war, a move that disrupted the Middle Eastern nation’s oil exports.

“President Biden’s policies are hiking inflation and energy prices for the American people,” Senate Energy and Natural Resources Committee Ranking Member John Barrasso said in a statement. “Tapping the Strategic Petroleum Reserve will not fix the problem.”

“We are experiencing higher prices because the administration and Democrats in Congress are waging a war on American energy,” he continued.

Dan Kish, a senior fellow at the Institute for Energy Research, said the move was like someone eating everything from the pantry then “shooting the farmers.”

“This is a cynical move by a guy who’s done everything in his power to restrict production here at home and in North America,” Kish told the DCNF. “All the while watching Russia become our number two supplier of foreign oil.”

Kish noted that oil prices have increased since Biden announced the release, a sign that it would have little effect on gasoline prices.

Republican Whip Steve Scalise said the SPR is strictly for emergency purposes in response to a question from the DCNF during an October roundtable. If Biden wanted to lower prices, he would make it easier for firms to drill and construct domestic pipelines, the Louisiana Republican added.

“The SPR is not to be used as a piggy bank just to bail you out when your failed policies create higher gas prices,” Scalise said.

“The answer is very straightforward and it’s right under our feet,” he continued. “Instead of trying to drain what’s left of our reserves, we ought to be producing more energy and creating more jobs here in America to take leverage away from OPEC countries and to take leverage away from Russia.”

COLUMN BY

THOMAS CATENACCI

Energy and environment reporter. Follow Thomas on Twitter

RELATED ARTICELS:

Trump Responds After Biden Announces Release Of Oil From Strategic Petroleum Reserves

Oil Prices Rise After Biden Announces Emergency Action

Joe Manchin Again Urges Biden To Reinstate Keystone XL Pipeline

Biden’s Energy Secretary Fails To Answer Question About Oil Industry

Environmentalists Are Making Putin Stronger Than Ever

White House Adviser Says There’s An ‘Energy Crisis,’ Doubles Down On Calls For Boosted Foreign Oil, Gas Production

Oil Prices Surge Again After OPEC Ignores Biden

Is The Shift To Renewable Energy Propelling Us Into An Energy Crisis?

EDITORS NOTE: This Daily Caller column is republished with permission. ©All rights reserved. Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.

Real Wages Declined 0.5% in October Amid Mounting Inflation

Wages rose 0.4 percent in October. That’s good news, right? Not so fast.

New inflation data reveal that despite nominal gains, Americans’ real wages actually declined last month.

The latest Consumer Price Index shows that consumer prices rose 6.2 percent from October 2020 to October 2021—the highest price inflation level in more than 30 years. In particular, necessities such as food, fuel, and used vehicles saw stark price increases. On a one-month basis, from September 2021 to October 2021, prices rose 0.9 percent—significantly more than wages.

So, even though wages nominally increased, real purchasing power has declined. That’s right: Americans may think they’ve gotten a raise, but they actually got a pay cut.

“All told, real average hourly earnings when accounting for inflation, actually decreased 0.5% for the month,” CNBC reports. “So an apparent solid paycheck increase actually turned into a decrease, and another setback for workers still struggling to shake off the effects of the Covid pandemic.”

This is more than just bad news. The troubling inflation trend also reminds us why we mustn’t fall for what economists call the “money illusion.” As economist Peter Jacobsen has explained for FEE.org, what matters is not the number on your paycheck but what you can buy with it.

“This concept is called your real wage,” Jacobsen writes. “If you offer someone a larger number on their paycheck, but then tell them the larger number comes with the caveat that they’ll be able to buy fewer goods and services in the present and future, they’d be a fool to take the deal.”

Politicians, including President Biden, are quick to point to the fact that nominal wages are rising:

They have every incentive to try to take credit for rising paychecks, after all. But voters shouldn’t fall for this rhetorical sleight-of-hand. As this week’s ugly inflation numbers show, real wages are falling—thanks to the government’s poor policy making.

COLUMN BY

Brad Polumbo

Brad Polumbo (@Brad_Polumbo) is a libertarian-conservative journalist and Policy Correspondent at the Foundation for Economic Education.

EDITORS NOTE: This FEE column is republished with permission. ©All rights reserved.

Inflation Hits 30-Year High According to This Key Metric

It’s the biggest annual surge recorded since January 1991—roughly three decades ago.


Left-leaning media coverage has in recent weeks pushed the narrative that inflation is fading. But shocking new inflation numbers released today blow that media spin to smithereens.

The Labor Department just released the latest Personal Consumption Expenditures index (PCE), which is the Federal Reserve’s preferred metric for monitoring inflation. It shows a 4.3 percent rise in consumer prices from August 2020 to August 2021, with prices rising 0.4 percent last month alone. That’s the biggest annual surge recorded since January 1991—roughly three decades ago.

Even when factoring out volatile food and energy prices, the PCE still shows a 0.3 percent monthly rise in consumer prices and a 3.6 percent year-over-year increase. That’s the highest on that metric since May 1991!

This all may sound like abstract economic data, but it translates to a real erosion of everyday Americans’ living standards and purchasing power. As economist and FEE fellow Peter Jacobsen has previously explained, rising inflation means “the average consumer making the same salary this year has taken a pay cut when you consider what their paycheck can actually buy.”

Even the Federal Reserve is starting to acknowledge, much belatedly, that these persistent levels of inflation are not just a “temporary” problem.

“It’s also frustrating to see the bottlenecks and supply chain problems not getting better — in fact at the margins apparently getting a little bit worse,” Fed Chair Jerome Powell said earlier this week. “We see that continuing into next year probably, and holding up inflation longer than we had thought.”

“It’s very difficult to say how big those effects will be in the meantime or how long they will last,” he added.

Of course, Powell and his colleagues at the Federal Reserve have every incentive to downplay the inflation problem hurting Americans. After all, it is, in part, driven by the Fed’s own policy decisions.

As Jacobsen noted when the concerning inflation metrics first arose in May 2021, the Fed has created trillions of new dollars out of thin air during the pandemic to date. The natural consequence of this money-supply expansion, he explains, is that “If more dollars chase the exact same goods, prices will rise.”

But even the Fed’s preferred inflation metric, the PCE, is now recording the highest levels of consumer price increases measured in 30 years. This problem is becoming impossible for even the most obstinate observers to deny. And until policymakers change course, American families will continue to pay the price.

COLUMN BY

Brad Polumbo

Brad Polumbo (@Brad_Polumbo) is a libertarian-conservative journalist and Policy Correspondent at the Foundation for Economic Education.


Like this story? Click here to sign up for the FEE Daily and get free-market news and analysis like this from Policy Correspondent Brad Polumbo in your inbox every weekday.


EDITORS NOTE: This FEE column is republished with permission. ©All rights reserved.

Trump, Money and the Fed

So who are these guys in this picture?Legendary author of The Creature from Jekyll Island”, researcher and film producer G. Edward Griffin, my good friend and founder of PollMole Dr.Richard Davis, (R.I.P.), Mad Max Mullen and oh a yeah, a much younger me, John Michael Chambers. This post, Trump, Money and the Fed lay the important groundwork and understanding for what President Trump has begun to take on.

Back in 2009 as the founder of the Save  America Foundation a 501(c)(4), we held a large convention in Tampa, Florida sounding the alarm bells in our desperate individual and collective attempts to save America. fast forward. Donald Trump has blasted onto  the scene. Some say he cannot handle the storm when in fact he is the storm. This really is a very important article. Please read on and share this post. People need to know to secure and expand our supportive base for President Trump for what lies ahead by end of Q1 2019, will be challenging.

The following has been excerpted and somewhat revised and edited from a book I wrote in 2014-2015 while in Belize and mostly in Thailand titled, “Misconceptions and Course Corrections”. Since Trump has begun taking on the Fed (Federal Reserve), I thought it would be good to gain a better understanding of what money actually is, who the Fed is, how they came to be and what it is that they have done. This is about to come to be challenged and changed forever beginning after in 2019. I will be writing about this historical event as it unfolds. It has already begun. But for those that need a better understanding of the Fed, I have resurrected this chapter. Here goes…

What is Money?

What is money? Money is an idea backed by confidence,which is used as a means of exchange, rather than say barter. Today we live in a debt based monetary system. Some say that money is the root of all evil; I disagree with this. There was a period of time many a moon ago where money did not exist, yet there was plenty of evil around. My best guess (I could be wrong), is that people who misuse life’s energy are the root of all evil, not money. Money is not evil and abundance is wonderful; there are evil people.

In this world it seems we have assigned power to money. It’s a pretty big agreement since everyone seems to be trying to acquire the stuff. So to that end, money is power in the sense that it is the means by which one can acquire tangible items, own things, have things,influence people and agendas, as well as affording perhaps better healthcare,better food, some things luxury, and all things essential to survival. Money allows one to participate in many things as well as to travel. The person with money can also take advantage of various opportunities to explore many new aspects and experiences in life than a person without money. Having said all that, money is still not the measure of the man (woman).

Money can’t buy contentment or happiness or love, but it can ease the experience of life and living if handled properly.There is nothing wrong with acquiring great wealth. It’s what you do with this great wealth that helps determine the character of the person. Some people, as we know, become very greedy and misuse the power that comes with having lots ofmoney, and this can be seen in many ways. Others put that money to good use,such as a quality home, education for children and young adults, trust accountsfor posterity, and many are philanthropic or charitable.

History, Digging in a Little Deeper

Presently and since 1944, the U.S. dollar is the world’s reserve currency, and this, coupled with a great change that is currently taking place which will affect every person on the planet (which we will discuss a bit further on), is why we must understand more about the U.S.dollar and the debt based monetary system.

Many Americans and people throughout the world believe that the Federal Reserve in the United States is part of the Federal government. Nothing could be further from the truth. The Federal Reserve is no more a government agency than Federal Express! Check this video at marker1:09. Even former Fed chairman AlanGreenspan agrees.Freedom to Fascism, in case you missed all those years ago, can be viewed here. An absolute must see.

It is imperative if you want to understand how the money system works that you procure a copy of “The Creature from Jekyll Island,” a second look at the Federal Reserve by the legendary author, researcher, and film producer, Mr. G.Edward Griffin. This book will outline in great detail the formation of the Federal Reserve System.Below is a summary.

1910

In November of 1910, on Jekyll Island,Georgia, seven men who represented directly or indirectly one fourth of the world’s wealth, met in secrecy for nine days. It is there, at this location,where the Charter of the Federal Reserve was drafted. The Federal Reserve is a privately held for profit corporation,a banking cartel. The main objective for a corporation is to make a profit, and they do indeed make a profit. Let’s take a brief stroll through history as we look into the formation of the Federal Reserve and the results of the Federal Reserve Charter that was enacted into law by the U.S. Congress in1913.

J.P. Morgan, Senator Nelson Aldrich, Piatt Andrews, Frank Vanderlip, Henry P. Davison, Paul Warburg, and Charles D.Norton arranged for hundreds of millions of dollars to be poured into the campaigns of the most powerful members of Congress. In 1912, they backed an obscure Princeton professor for President of the United States, Woodrow Wilson.He later became President.

The Coup’ of 1913

Late on Tuesday December 23, 1913, just days after the Christmas recess had commenced, a secret Senate vote was“arranged” with only a few Senators remaining in Washington D.C.The act passed with 43 voting “yea” and 25 voting “nay.” 27 did not vote since they had not been notified and had already left town to go home for the Holidays. All had previously expressed their opposition to the act. So on Dec 23, 1913, their plan worked by one of the most cunning manipulations in parliamentary history;Congress passed the Federal Reserve Act of 1913.In its charter, the act clearly states as its main objective: “To provide the action with a safer,more flexible, and more stable monetary and financial system.”

This means of a fractional reserve debt system controlled by a private for Profit Corporation has not worked out too well for the American people and thus the world to a greater or lesser extent.I mean we do not have a more stable monetary financial system at all.What we have is a debt based monetary system no longer backed by gold or silver. We have a currency that will soon be replaced as the world’s reserve currency. The Federal debt alone is $19 trillion dollars. It is mathematically impossible topay off this debt which will in a couple of short years will soon reach $22trillion and will make the U.S. situation look like Greece on steroids! Therefore “a safer, more flexible and more stable monetary and financial system” as set forth in this charter clearly has not worked out so well. And so by this means of fractional reserve banking,governments may secretly and unobserved, confiscate the wealth of the people and not one man in a million will detect the theft. This system of fractional reserve banking and the printing of all this fiat (now digital fiat) currency,is purely inflationary and the U.S. dollar has lost over 95% of its purchasing power since its inception.

1944 The Bretton Wooods Agreement

Another critical factor, which contributed to the rise of power in America, was the Bretton Woods agreement of1944. The Bretton Woods system of monetary management established the rules for commercial and financial relations among the world’s major industrial states in the mid-20th century. The BrettonWoods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states. It is through the Breton Woods agreement that the U.S. dollar became the world’s “reserve currency. 

Preparing to rebuild the international economic system as World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods,New Hampshire, United States, for the United Nations Monetary and Financial Conference. 

The delegates deliberated upon and signed the Bretton Woods Agreements during the first three weeks of July 1944. Setting up a system of rules, institutions, and procedures to regulate the international monetary system, the planners at the Bretton Woods Agreements during the first three weeks of July 1944. Setting up a system of rules, institutions, and procedures to regulate the international monetary system, the planners at Bretton Woods established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD),which today is part of the World BankGroup. These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement.

The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar and the ability of the IMF to bridge temporary payments. Simply stated, the power centers of the world met in Bretton Woods, New Hampshire and it was decided that international trade and settlements such as the purchase of oil for example, must be exchanged with the U.S. dollars. This meant that the central banks of these nations were required to have sufficient U.S. dollars.

As a result, the increasing global demand for the U.S. dollar continued and based on supply and demand this kept the dollar strong. Another reason for this decision in 1944 is due to the fact that up until that point in history, America’s currency was kept under control without runaway inflation as the U.S. dollar was backed by gold and silver and  the trust and confidence in the US.Dollar was strong. Confidence is the critical underlying factor that keeps the financial structures and systems in place.Including confidence in the currency itself. In fact it can be stated that money is nothing more than an idea backed by confidence and a means to easily facilitate trade and keep order. What happens when this confidence is shattered?

1971 – The Nixon Shock

On August 15, 1971, the United States unilaterally terminated convertibility of the dollar to gold. As a result, the Bretton Woods system officially ended and the dollar became fully ‘fiat currency,’backed by nothing but the promise of the federal government. This action, referred to as the Nixon shock, created the situation in which the United States dollar became a reserve currency used by many states. From the1970’s and forward, Americans enjoyed what is considered to be a lavish lifestyle in comparison to most countries around the world.

Lesson from the Dustbin of History

 “Give me control of a nation’s money supply, and I care not who makes its laws.”– Amschel Rothschild, Mayer and German banker. He was the founder of the Rothschild family international banking dynasty.

The best way to destroy the capitalist system is to debauch its currency.” “The best way to crush the bourgeoisie (middle class), Is to grind between the millstones of taxation and inflation.” – Vladimir Lenin, Chairman of Russia’s Council of peoples Commissars 1917-1924

“By a continuing process of inflation,government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” –John MaynardKeynes, Fabian Socialist and father of Keynesian Economics

“The dirty little secret is that both houses of Congress are irrelevant. Both   congress is now being run by Alan Greenspan (Ben Bernanke today) and the Federal Reserve and America’s foreign policy is now being run by the IMF. When the President decides to go to war he no longer needs a declaration of war  Money in our current system is nothing more than debt, and we have lots of it!.“ – Robert Reich 22nd U.S.labor Secretary

“The government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of the consumers. The privilege of creating and issuing money is not only   prerogative of government, but it is the government’s greatest  .” –President Abraham Lincoln

“If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.” President Thomas Jefferson

“Inflation has now been institutionalized at a fairly constant 5% per year. This has been determined to be the optimum level for generating the most   causing public alarm. A 5% devaluation applies, not only to the money earned this year, but to all that is left over from previous years. At the end of the first year, a dollar is worth 95 cents.At the end of the second year, the 95cents is reduced again by 5%, leaving its worth at 90 cents, and so on. By the time a person has worked 20 years, the government will have confiscated 64%of every dollar he saved over those years. By the time he has worked 45 years,the hidden tax will be 90%. The government will take virtually everything a person saves over a lifetime.” – American Author, Researcher and Filmmaker, G. Edward Griffin

“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are   hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.” – President Woodrow Wilson, aftersigning the Federal Reserve into existence

Money in our current system is nothing more than debt, and we have lots of it! Weeks away from http://usadebtclock.com/$22Trillion and that’s just the Federal debt alone!

Concluding Remarks

So the Federal Reserve, a private for profit baking cartel,comes to the table with no “skin in the game.” They unleash what is now digital fiat currency with no tangible backing or accountability into the banking system and this is then leveraged by Fractional Reserve Banking. The banks then can loan out these dollars (with a multiplier of 10 or 100 or more times the amount than they received from the Fed.), to other banks, to governments, corporations, and individuals and charge an interest rate. They typically own title for example, as in a mortgage or car loan. And when they decide to“reap the harvest,” they seize the assets when the consumer is unable to survive in a jobless inflationary climate (which they helped to create). They also fund both sides of all wars for huge profits as the innocent little children are laid in shallow graves and billed as nothing more than collateraldamage”.

This subject of Fractional Reserve Banking is also defined in great detail in a simple to understand format in the DVD titled“ Money as Debt”

This Federal Reserve Act of 1913,although passed by congress, was in contradiction to the United States Constitution which in Article 1, Section 8, Phrase5. It clearly states the following regarding money that “  have power to coin money, regulate the Value thereof, and of foreign Coin, and fix the standard of weights and measures.“ This power was given to a private bank called the Federal Reserve in 1913. Congressman Charles A. Lindbergh Sr. back then said – “This Federal Reserve Act establishes the most gigantic trust on earth. When President Wilson signs this bill, the invisible government of the monetary power will be legalized. This is the worst legislative crime of the ages that has been perpetuated by this banking and currency bill. From now on, all depressions will be scientifically created.”

And since the inception of the Federal Reserve, the U.S. Dollar has lost over 97% of its purchasing power. I believe the U.S. Dollar may experience a false sense of stability for the short to near term as the Euro and other currencies falter and fail, but once the U.S. dollar loses its world reserve currency status (at least as we know it) as the global financial reset is now upon us just a few short months from now (It is December23, 2018 as I write today), Trump will make his move against the Fed. Watch for my article on this in the coming days.

2019 and Beyond

It is because of this power and control which money affords that you will come to realize why governments and banks around the world are moving towards a cashless society. That’s right, a cashless society. If governments can control your money they can control your life. There are more and more laws, rules, and regulations in the U.S., Europe,and many places around the world restricting the amount of cash you can withdraw from your own accounts. Banks are now beginning to charge negative interest to hold your money.

Pulling cash from your bank or excessive international bank wires in any amount over a few thousand dollars, the banks can report you to the government as a “suspicious person,” potential money launderer, or terrorist, and a series of such withdrawals can put you in violation of criminal structuring/money laundering regulations, with huge fines and jail sentences. The ultimate goal of the global socialists is to eliminate all cash on a global basis and force everyone on the planet into the computerized electronic banking/credit card system. Cryptocurrencies have gained much momentum (albeit very volatile).

This will eventually lead to the National ID card, then the Global ID card, and then the chip through injection. This is the ultimate control and this is the direction the world is presently heading.I recommend getting a copy of the McAlvany Intelligence Advisor report May 2015 titled “War on Cash”, orread more about this in my archived articles section under “financial”.

So What to Do About All This?

There will be quite the bloodbath in the stock, bond and real estate markets. In fact, this has just begun. Support President Trump. Stay the course. Awaken others. Turn off the fake news. It is poisoning your mind, thoughts and feeling world and making you miserable. Follow Q-There is a plan.Stay informed. Sign up to receive my weekly articles to your in box via this FREE RSS Feed.

Surveys indicate that people no longer trust the media for news, politicians for the truth, or that Wall Street has Main Street’s best interest in mind. The John Michael Chambers Report informs and empowers individuals in a changing world. Sign up. Be informed and empowered. Stay connected.

As to your personal finances? The time for action is now. While so many others will continue to operate in the deceitful and flawed modalities being advised by an industry they no longer trust, critical thinkers see the dangers and opportunities. But you must act. A great change is on the near term horizon. The time for action is now. You can survive and thrive through the battle that has just begun for global currency supremacy. Got questions? I can help. Contact me.

Video Commentary

Beginning 2019, I will be providing a short weekly commentary video reflecting on the state of affairs as they unfold weekly. There will be unprecedented events occurring in 2019 and 2020. We will make sense of the madness as Trump takes on the Fed and the Deep State. The first video will be launched here on January 6, 2019 and each Sunday thereafter. Until then, have a Merry Christmas!
See you soon!

Grade Inflation Eats Away at the Meaning of College by George C. Leef

The Year Was 2081 and Everyone Was Finally Above Average.

Every so often, the issue of grade inflation makes the headlines, and we are reminded that grades are being debased continuously.

That happened in late March when the two academics who have most assiduously studied grade inflation — Stuart Rojstaczer and Christopher Healy — provided fresh evidence on their site GradeInflation.com that grade inflation continues.

The authors state, “After 30 years of making incremental changes (in grading), the amount of rise has become so large that what’s happening becomes clear: mediocre students are getting higher and higher grades.”

In their database of over 400 colleges and universities covering the whole range of our higher education system, from large and prestigious universities to small, non-selective colleges, the researchers found not one where grades had remained level over the last 50 years. The overall rise in grades nationally has brought about a tripling of the percentage of A grades, although some schools have been much more “generous” than others.

Or, to look at it the other way, some schools have been much better than others in maintaining academic standards. For instance, Miami of Ohio, the University of Missouri, and Brigham Young have had low grade inflation. Why that has been the case would be worth investigating.

In North Carolina, Duke leads in grade inflation, followed closely by UNC. Wake Forest is in the middle of the pack, while UNC-Asheville has had comparatively little.

But why have American colleges and universities allowed, or perhaps even encouraged grade inflation? Why, as professor Clarence Deitsch and Norman Van Cott put it in this Pope Center piece five years ago, do we have “too many rhinestones masquerading as diamonds?”

Part of the answer, wrote Deitsch and Van Cott, is the fact that money is at stake.  “Professors don’t have to be rocket scientists to figure out that low grades can delay student graduation, thereby undermining state funding and faculty salaries,” they observed.

It might surprise Americans who believe that non-profit entities like colleges are not motivated by money and would allow honest academic assessment to be affected by concerns over revenue maximization, but they do.

But it is not just money that explains grade inflation. At least as important and probably more so is the pressure on faculty members to keep students happy.

History professor Chuck Chalberg put his finger on the problem in this article in the Minneapolis Star-Tribune.

Chalberg writes about a friend of his who had completed her Ph.D. in psychology and was working as a teaching assistant to a professor and graded the papers submitted by the undergraduates “with what she thought was an appropriate level of rigor.” But it was not appropriate, she soon learned. The professor “revised nearly all of the grades upward so that were left no failures, few C’s, and mostly A’s and B’s.”

Had she underappreciated the real quality of the work of the students? No, but, Chalberg continues, “the students thought that they were really, really, smart, and would have been quite angry and thrown some major tantrums if they got what they actually deserved.”

Thus, giving out high but undeserved grades is a way of avoiding trouble. That trouble could come from students who have an elevated and unrealistic view of their abilities and will complain about any low grade to school officials.

It could also come from their parents, who have been known to helicopter in and gripe to the administrators that young Emma or Zachary just can’t have a C and if it isn’t changed immediately, there will be serious repercussions.

Another possibility is that faculty will give out inflated grades to avoid conflict with those school administrators.

Low grades affect student retention and at many colleges the most important thing is to keep students enrolled. Back in 2008, Norfolk State University biology professor Stephen Aird lost his job because the administration was upset with him for having the nerve to grade students according to their actual learning rather than giving out undeserved grades just to keep them content. (I wrote about that pathetic case here.)

Could it be that students are getting better and deserve the higher grades they’re receiving?

You’d get an argument if you ran that explanation by Professor Ron Srigley, who teaches at the University of Prince Edward Island. In this thoroughly iconoclastic essay published in March, he stated, “Over the past fourteen years of teaching, my students’ grade-point averages have steadily gone up while real student achievement has dropped. Papers I would have failed ten years ago on the grounds that they were unintelligible … I now routinely assign grades of C or higher.”

Professor Srigley points to one factor that many other professors have observed — students simply won’t read. They aren’t in the habit of reading (due to falling K-12 standards) and rarely do assigned readings in college. “They will tell you that they don’t read because they don’t have to. They can get an A without ever opening a book,” he writes.

We also have good evidence that on average, today’s college students spend much less time in studying in homework than students used to. In this 2010 study, Professor Philip Babcock and Mindy Marks found that college students today spend only about two thirds as much time as they did some fifty years ago. That’s hardly consistent with the notion that students today are really earning all those A grades.

On the whole, today’s students are receiving substantially higher grades for substantially lower academic gains than in the past.

Grade inflation is consistent with the customer friendly, “college experience” model that has mushroomed alongside the old, “you’ve come here to learn” college model. For students who merely want the degree to which many believe themselves entitled, rigorous grading is as unwelcome as cold showers and spartan meals would be at a luxury resort. Leaders at most colleges know that if they don’t satisfy their student-customers, they will find another school that will.

Exactly what is the problem, though?

Grade inflation could be seen as harmful to the downstream parties, the future employers of students who coast through college with high grades but little intellectual benefit. Doesn’t grade inflation trick them into over-estimating the capabilities of students?

That is a very minor concern. For one thing, it seems to be the case that employers don’t really pay much attention to college transcripts. In this NAS piece, Academically Adrift author Richard Arum writes, “Examining post-college transitions of recent graduates, Josipa Roksa and I have found that course transcripts are seldom considered by employers in the hiring process.”

That’s predictable. People in business have come to expect grade inflation just as they have come to expect monetary inflation. Naturally, they take measures to avoid bad hiring decisions just as they take measures to avoid bad investment decisions. They have better means of evaluating applicants than merely looking at GPAs.

Instead, the real harm of grade inflation is that it is a fraud on students who are misled into thinking that they are more competent than they really are.

It makes students believe they are good writers when in fact they are poor writers. It makes them believe they can comprehend books and documents when they can barely do so. It makes them think they can treat college as a Five Year Party or a Beer and Circus bacchanalia because they seem to be doing fine, when they’re actually wasting a lot of time and money.

Dishonest grading from professors is as bad as dishonest health reports from doctors who just want their patients to feel happy would be. The truth may be unpleasant, but it’s better to know it than to live in blissful ignorance.

This article was originally published by the Pope Center.

George C. LeefGeorge C. Leef

George Leef is the former book review editor of The Freeman. He is director of research at the John W. Pope Center for Higher Education Policy.

Market Corrections Inspire Dangerous Political Panic by Jeffrey A. Tucker

Some kinds of inflation people really hate, like when it affects food and gas. But now, with the whole of the American middle class heavily invested in stocks, there is another kind inflation people love and demand: share prices that increased forever.

Just as with real estate before 2008, people seem addicted to the idea that they should never go anywhere but up.

This is the reason that stock market corrections are so dangerous. The biggest danger is not economic. It is political. Such corrections push politicians and central bankers to undertake ever-more nutty political in do order to fix them.

To make the point, Donald Trump immediately blamed China, which has the temerity to sell Americans excellent products at low prices. Bernie Sanders blamed “free trade,” even though the United States is among the most protectionist in the world.

Nothing in this world is more guaranteed to worsen a correction that a trade war. But so far, that’s what’s been proposed.

Tolerance for Downturns

It was not always so. In the 1982 recession, the Reagan administration argued that it was best to let the market clear and grow calm. Once the recession cleaned up misallocations of resources, the economy would be well prepared for a growth path. Incredibly, the idea was sold to the American people, and it proved wise.

That was the last time in American history we’ve seen anything like a laissez-faire attitude prevail. After the 1990s dot com boom and bust, the Fed intervened in an effort to repeal gravity. After 9/11, the Fed intervened again, using floods of paper money to rebuild national pride. That created a gigantic housing bubble that exploded 7 years later.

By 2008, the idea of allowing markets to clear became intolerable, and so Congress spent hundreds of billions of dollars and the Fed created trillions in phony money, all to forestall what desperately needed to happen.

Now, with dramatic declines in stock markets around the world, we are seeing what happens when governments and central banks attempt to counter market forces.

Markets win. Every time. But somehow it doesn’t matter anymore. There’s no more science, no more rationality, no more concern for the long term, so far as the Fed is concerned. The Fed is maniacally focused on its member banks’ balance sheets. They must live and thrive no matter what. And the Fed is in the perfect position now to use public sentiment to bolster its policies.

The Right and Wrong Question 

In the event of a large crash, the public discussion going forward will be: What can be done to re-boost stock prices? This is the wrong question. The right question should be: What were the conditions that led to the unsustainable boom in the first place? This is the intelligent way to address a global meltdown. Sadly, intelligence is in short supply when people are panicked about losing their retirement funds they believed were secure.

Back when people thought about such things, the great economic Gottfried von Haberler was tapped by the League of Nations to write a book that covered the whole field of business cycle theory as it then existed. Prosperity and Depressioncame out in 1936 and was republished in 1941. It is a beautiful book, rooted in rationality and the desire to know.

The book covers six core theories: purely monetary (now called Chicago), overinvestment (now called Austrian), sudden changes in cost (related to what is now called Real Business Cycle), underconsumption (now called Keynesian), psychological (popular in the financial press), and agricultural theories (very old fashioned).

Each one is described. The author then turns to solutions and their viability, assessing each. The treatise leans toward the view that permitting the recession (or downturn or depression) run its course is a better alternative than any large policy prescription applied with the goal of countering the cycle.

Haberler is careful to say that there is not likely one explanation that applies to all cycles in all times and in all places. There are too many factors at work in the real world to provide such an explanation, and no author has ever attempted to provide one. All we can really do is look for the primary causes and the factors that are mostly likely to induce recurring depressions and recoveries.

He likened the business cycle a rocking chair. It can be still. It can rock slowly. Or an outside force can come along to cause it to rock more violently and at greater speed. Detangling the structural factors from the external factors is a major challenge for any economist. But it must be done lest policy authorities make matters worse rather than better.

The monetary theory posits that the quantity of money is the key factoring in generating booms and busts. The more money that flows into an economy via the credit system, the more production increases alongside consumption. This policy leads to inflation. The pullback of the credit machine induces the recession.

The “overinvestment” theory of the cycle focuses on the misallocation of resources that upsets the careful balance between production and consumer. Within the production structure in normal times, there is a focus on viability in light of consumer decisions. But when more credit is made available, the flow of resources is toward the capital sector, which is characterized by a multiplicity of purposes. The entire production sector mixes various time commitments and purposes. Each of them corresponds with an expectation of consumer behavior.

Haberler calls this an overinvestment theory because the main result is an inflation of capital over consumption. The misallocation is both horizontal and vertical. When the consumer resources are insufficient to realize the plans of the capitalists, the result is a series of bankruptcies and an ensuing recession.

Price Control by Central Banks

A feature of this theory is to distinguish between the real rate of interest and the money rate of interest. When monetary authorities push down rates, they are engaged in a form of price control, inducing a boom in one sector of the production structure. This theory today is most often identified with the Austrian school, but in Haberler’s times, it was probably the dominant theory among serious specialists throughout the world.

In describing the underconsumption theory of the cycle, Haberler can hardly hide his disdain. In this view, all cycles result from too much hoarding and insufficient debt. If consumer were spend to their maximum extent, without regard to issues of viability, producers would feel inspired to produce, and the entire economy could run off a feeling of good will.

Habeler finds this view ridiculous, based in part on the implied policy prescription: endlessly inflate the money supply, keep running up debts, and lower interest rates to zero. The irony is that this is the precisely the prescription of John Maynard Keynes, and his whole theory was rooted in a 200-year old fallacy that economic growth is based on consumption and not production. Little did Haberler know, writing in the early 1930s, that this theory would become the dominant one in the world, and the one most promoted by governments and for obvious reasons.

The psychological theory of the cycle observes the people are overly optimistic in a boom and overly pessimistic in the bust. More than that, the people who push this view regard these states of mind as causative of economic trends. They both begin and end the boom.

Haberler does not deny that such states of mind are important and contributing elements to making the the cycle more exaggerated, but it is foolish to believe that thinking alone can bring about systematic changes in the macroeconomic structure. This school of thought seizes on a grain of truth, and pushes that grain too far to the exclusion of real factory. Interestingly, Haberler identifies Keynes by name in his critique of this view.

Haberler’s treatise is the soul of fairness but the reader is left with no question about where his investigation led him. There are many and varied causes of business cycles, and the best explanations trace the problem to credit interventions and monetary expansions that upset the delicate balance of production and consumption in the international market economy.

Large-scale attempts by government to correct for these cycles can result in making matters worse, because it has no control over the secondary factors that brought about the crisis in the first place. The best possible policy is to eliminate barriers to market clearing — that is to say, let the market work.

The Fed is the Elephant in the Room

And so it should be in our time. For seven years, the Fed, which controls the world reserve currency, has held down interest rates to zero in an effort to forestall a real recession and recreate the boom. The results have been unimpressive. In the midst of the greatest technological revolution in history, economic growth has been pathetic.

There is a reason for this, and it is not only about foolish monetary policy. It is about regulation that inhibits business creation and economic adaptability. It’s about taxation that pillages the rewards of success and pours the bounty into public waste. It is about a huge debt overhang that results from the declaration that all governments are too big to fail.

Whether a correction is needed now or later or never is not for policymakers to decide. The existence of the business cycle is the market’s way of humbling those who claim to have the power and intelligence to outwit its awesome and immutable forces.

Jeffrey A. Tucker
Jeffrey A. Tucker

Jeffrey Tucker is Director of Digital Development at FEE, CLO of the startup Liberty.me, and editor at Laissez Faire Books. Author of five books, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.  Follow on Twitter and Like on Facebook.

Real Hero James U. Blanchard: You Can’t Keep a Good Man Down by Lawrence W. Reed

Great movements are marked by the dedication and accomplishments of steadfast individuals who make the most of every moment, every opportunity, and every available resource. When those great men and women pass from the scene, they leave behind untold numbers of friends and followers who derive comfort from their memory and inspiration from their deeds.

Such a man was James U. Blanchard III, who died on March 20, 1999, at the age of 56.

The causes to which he devoted ceaseless energy and with which his name will always be associated are liberty and sound money. Jim knew that neither is long safe without the other. Few American entrepreneurs in the second half of the 20th century did as much as he did to promote them both. The opening sentence of his family’s formal notice of his passing summed him up well: “James U. Blanchard III was a man who accomplished much against great odds and changed more people’s lives than he ever knew.”

I was privileged to know Jim Blanchard for the last 15 years of his life. For two years, I served as chief economist for his firm. I spoke at many of his conferences. I traveled with him to Brazil, Nicaragua, and Kenya. Though many others knew him better, it didn’t take much acquaintance with him for anyone to marvel at what a man in a wheelchair can get done if he puts his mind to it.

Jim was nearly killed in a tragic automobile accident at the age of 17 and was unable thereafter to walk. But if anything, his handicap only spurred him on.

Not once did I hear Jim bemoan his physical plight. If he talked about it at all, it was to relate how sitting in a wheelchair gave him time to read. In his 20s, he read voraciously. Introduced to the writings of Ayn Rand by a medical student friend, he became an unabashed defender of laissez-faire capitalism. Rand’s influence on Jim is perhaps best exemplified by the name he gave his oldest son: Anthem. Jim also became a devoted reader of the Freeman and of books by FEE’s founder, Leonard Read.

In 1974, Gerald Ford signed a bill that restored the right of Americans to own gold. The real hero of that moment was Jim Blanchard, who had formed the National Committee to Legalize Gold in 1971 and spearheaded a nationwide grassroots campaign. He knew that governments don’t like gold because they can’t print it. He saw gold ownership as a fundamental human right, a hedge against government mismanagement of money, and a first essential step down the long road to monetary integrity.

True to his spirit, some of Jim’s efforts were dramatic and unconventional. He arranged for a biplane to tow a “Legalize Gold” banner over President Nixon’s 1973 inauguration. He also held press conferences around the country at which he would brandish illegal bars of gold and publicly challenge federal officials to throw him in jail. These and many other stories about Jim’s colorful career can be found in his 1990 autobiography, Confessions of a Gold Bug.

Once gold became legal, Jim held his first annual investment conference in New Orleans. Expecting 250 attendees, he was stunned to see 750 show up. More than 40 years later, Blanchard’s New Orleans Investment Conference carries on and has drawn tens of thousands of individuals from all 50 states and dozens of nations. Investment advice comprised most of the 25 programs Jim assembled, but he always made sure that attendees were provided a hefty dose of sound-money and free-market ideas. His speakers included Milton Friedman, F.A. Hayek, Robert Bleiberg, Walter Williams, and many other great economists. Ayn Rand’s last public appearance was at a Blanchard conference. (In October 2015, I’ll be speaking again at the conference myself.)

In the meantime, Jim’s original $50 investment to begin a coin business in the 1970s grew into a giant within the industry. When he sold the business 15 years later, it was a $115-million-a-year precious-metals and rare-coin company. He cofounded the Industry Council for Tangible Assets to combat unscrupulous business practices in the coin and bullion industry, and he helped to reverse several burdensome laws and regulations that afflicted American investors.

Jim’s adventurous instincts and love of liberty combined to put him on the front lines of important struggles around the world. On my return in 1986 from visiting with activists in the anti-communist underground in Poland, I went to Jim with a request. I advised him that for $5,000, pro-freedom forces in Warsaw could translate Milton Friedman’s Free to Choose into Polish and then print and distribute hundreds of copies throughout the country. He wrote that check on the spot, and many others for similar causes behind the Iron Curtain. Not content only to fund these worthy endeavors, he often transported illicit, pro-freedom literature himself when he visited communist countries.

One of Jim’s favorite foreign projects was assisting anti-communist rebel forces inside war-torn Mozambique in the 1980s and early 1990s. He once sent a colleague and me on a clandestine journey inside the country to live for two weeks with the rebels in the bush and help to spread a pro-freedom message. Once the war was over and Mozambique adopted policies friendly to private property and free markets, Jim pitched in to assist in reconstruction.

“I remember my father as the bravest and most adventurous person that I have ever known to this day,” Anthem recently told me.

He never let anyone tell him no. He was fearless in his belief in the goodness of the human spirit. He understood that the path to personal betterment is best shepherded by free enterprise, and [he understood] the importance of balance between natural rights and property rights protected by a responsible, accountable, made-as-limited-as-possible government.

If Jim were alive today, he would beam with pride in his son, who carries three famous names: Anthem Hayek Blanchard is founder and president of Anthem Vault, a Nevada-based company pioneering a gold-backed cryptocurrency called HayekGold after Nobel laureate and Austrian economist F.A. Hayek. (Browse through the news items on the company’s web page and you’ll learn more about the currency that wouldn’t even be legal today had it not been for the work of Anthem’s father.)

Anthem says his father taught him “above all else” that true freedom can only be achieved once the world experiences a Hayekian choice in currency that technologies like bitcoin, HayekGold, and other virtual assets are wonderfully making a rapidly growing reality. I know Pop would be the most excited person in the world about all of these new technology developments enabling Austrian economics to flourish in a modern digital society.

Jim Blanchard overcame personal tragedy to become a powerful figure for liberty and sound money. His indomitable spirit lives on in all those who know that the noble causes to which he devoted his life require both hard work and eternal vigilance.

Video from FreedomFest: Remembering James U. Blanchard III with Lawrence Reed

RELATED ARTICLES:

Jim Blanchard’s 1990 autobiography, Confessions of a Gold Bug

Jim Blanchard’s 1984 interview of Austrian economist F.A. Hayek

Steve Mariotti’s 2014 interview with Anthem Hayek Blanchard


Lawrence W. Reed

Lawrence W. (“Larry”) Reed became president of FEE in 2008 after serving as chairman of its board of trustees in the 1990s and both writing and speaking for FEE since the late 1970s.

EDITORS NOTE: Each week, Mr. Reed will relate the stories of people whose choices and actions make them heroes. See the table of contents for previous installments.

Paul Krugman Is Even Wrong about What Paul Krugman Thought by Steve H. Hanke

Paul Krugman, “Killing the European Project”, NY Times, July 12, 2015:

The European project — a project I have always praised and supported — has just been dealt a terrible, perhaps fatal blow. And whatever you think of Syriza, or Greece, it wasn’t the Greeks who did it.

Paul Krugman has always praised and supported the European project? Really? Here’s Prof. Krugman in his own words on the centerpiece of the European project, the euro:

  • Paul Krugman, “The Euro: Beware Of What You Wish For”, Fortune, December 1998: “But EMU wasn’t designed to make everyone happy. It was designed to keep Germany happy — to provide the kind of stern anti-inflationary discipline that everyone knew Germany had always wanted and would always want in future.So what if the Germans have changed their mind, and realized that they — along with all the other major governments — are more worried about deflation than inflation, that they would very much like the central bankers to print some more money? Sorry, too late: the system is already on autopilot, and no course changes are permitted.”
  • Paul Krugman, “Can Europe Be Saved?”, NY Times, January 12, 2011: “The tragedy of the Euromess is that the creation of the euro was supposed to be the finest moment in a grand and noble undertaking: the generations-long effort to bring peace, democracy and shared prosperity to a once and frequently war-torn continent.But the architects of the euro, caught up in their project’s sweep and romance, chose to ignore the mundane difficulties a shared currency would predictably encounter — to ignore warnings, which were issued right from the beginning, that Europe lacked the institutions needed to make a common currency workable. Instead, they engaged in magical thinking, acting as if the nobility of their mission transcended such concerns.”
  •  Paul Krugman, “Greece Over The Brink”, NY Times, June 29, 2015: “It has been obvious for some time that the creation of the euro was a terrible mistake. Europe never had the preconditions for a successful single currency…”
  • Paul Krugman, “Europe’s Many Economic Disasters”, NY Times, July 3, 2015: “What all of these economies have in common, however, is that by joining the eurozone they put themselves into an economic straitjacket.Finland had a very severe economic crisis at the end of the 1980s — much worse, at the beginning, than what it’s going through now. But it was able to engineer a fairly quick recovery in large part by sharply devaluing its currency, making its exports more competitive. This time, unfortunately, it had no currency to devalue. And the same goes for Europe’s other trouble spots. Does this mean that creating the euro was a mistake? Well, yes.”

When reading Prof. Krugman’s works, it’s prudent to fact check. Prof. Krugman has always been in the Eurosceptic camp. Indeed, the essence of many of his pronouncements can be found in declarations from a wide range of Eurosceptic parties.

This post first appeared at Cato.org.


Steve H. Hanke

Steve H. Hanke is a Professor of Applied Economics and Co-Director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at The Johns Hopkins University in Baltimore.

What Greek “Austerity”? by Steve H. Hanke

greek president

Greek Prime Minister Alexis Tsipras

It’s hard to find anything written or spoken about Greece that doesn’t contain a great deal of hand-wringing about the alleged austerity — brutal fiscal austerity — that the Greek government has been forced to endure at the hands of the so-called troika (the European Central Bank, the European Commission, and the International Monetary Fund).

This is Alice in Wonderland economics. It supports my 95% rule: 95% of what you read about economics and finance is either wrong or irrelevant.

The following chart contains the facts courtesy of Eurostat.

Social security spending as a percentage of GDP in Greece is clearly bloated relative to the average European Union country — even more so if you only consider the 16 countries that joined the EU after the Maastricht Treaty was signed in 1993.*

To bring the government in Athens into line with Europe, a serious diet would be necessary — much more serious than anything prescribed by the troika.

* Ed. note: The treaty created the EU and the euro and also obligated EU members to keep “sound fiscal policies, with debt limited to 60% of GDP and annual deficits no greater than 3% of GDP.” Ha!

Steve H. Hanke

Steve H. Hanke is a Professor of Applied Economics and Co-Director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at The Johns Hopkins University in Baltimore.