Photo source: William Hancock blog at Substack.com
A major theme in the United States, that of “affordability,” the chances of the average American coping with rising prices, is being overwhelmed by the attention to the misbegotten Iran War. (We call it “Donald, Pete and Juan’s War” after the impulsive but confused president who started it, the loud-mouthed but ineffective Secretary of Defense who tries to fight it, and our Sixth District congressman, elected to represent all of us, but constantly bowing and scraping to the Trump administration’s whims.)
It’s a new week, though, so maybe things are different? No, you still must pay attention to the War, in this case its continuing cost.
Official Consumer Price Index figures for April came out May12. This is how some major media outlets described the numbers:
- The Wall Street Journal: “Inflation Soared to 3.8% in April”
- The New York Times: “Inflation Accelerates”
- Bloomberg News: “Inflation Resurgence Squeezes US Voters”
Bad news all around, in other words. And that was for the current effect on prices paid for stuff off the shelf, and at the gas pump too, of course (how can you forget that?). But the next day the Producer Price Index (what manufacturers, farmers, etc., are paying to make what we buy) came out. Did you think that 3.8 percent increase was bad? Try 6 percent, the largest annual jump since 2022. That will feed into the Consumer Price Index soon.
The number everyone focuses on is the price of gasoline, which has skyrocketed more than 50 percent because of the war that did not have to be fought. But that’s the price of regular gas. The potentially bigger problem is the cost of diesel fuel, up 63 percent in Arizona and 67 percent in Pima County. Per the government’s own Energy Department website, “Most of the products we use are transported by trucks and trains with diesel engines, and most construction, farming, and military vehicles and equipment also have diesel engines.” The high cost of diesel fuel will continue to drive US inflation as it gets translated into consumer prices.
What else has gone up in price? Economist Justin Wolfers dug down into the fine print of the CPI data and found many annual increases. Some examples not directly related to the skyrocketing cost of oil:
- Tomatoes, 39.7 percent
- Instant coffee, 22.8 percent
- Beef and veal, 14.8 percent
- Frozen fish, 12.0 percent
- Fresh vegetables, 11.5 percent
You get the idea. A lot of you get the idea, in fact. The University of Michigan has conducted regular consumer sentiment surveys for several decades. The May survey found that “consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump. Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall.”
So, it’s noticeably more expensive to buy food and gasoline. It’s also more expensive to buy a house, and not just because the cost of diesel for construction equipment costs more (that comes later). Per economist Jared Bernstein, “consider the median home, which today runs for about $400K. The difference in the monthly payment from the pre-war 30-yr FRM [fixed rate mortgage] rate of 5.99% and today’s rate of 6.65% is $195/month or $2,300 per year. Add that to the cost of war.”
People living in America may also be sensing yet another negative. The annual growth in inflation is now greater than the growth in wages over the past year.
US wage earners are being overwhelmed by inflation, in other words.
Where is this taking Donald Trump and Juan Ciscomani, who long ago tethered himself to Trump’s MAGA agenda while pretending to be a likeable bipartisan congressman: “A new CNN poll conducted by SSRS finds that 77% – including a majority of Republicans – say that Trump’s policies have increased the cost of living in their own community. Roughly two-thirds of Americans say that Trump’s policies have worsened economic conditions in the country. And Trump’s approval rating stands at 30% on the economy, a career low.”
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“Affordability” is a nonsense word in this context.
When I was 18 years old and flipping burgers at McD’s I made $2.65 an hour.
A gallon of gas cost .10. Ten cents.
So I could fill up my ten gallon tank for about half an hour’s work and still buy a burger. Or two.
Minimum wage is 7.25 today, and a gallon of gas costs nearly 5 bucks.
Younger American’s are getting boned and they know it.
CEO’s made 40 times the average wage of thier employees, now they make 400 times more, they’ll lay you off during a recession they caused but still somehow get multi-million dollar bonuses for themselves and come out of that recession even richer.
And young American’s know it.
Inflation is half the economic problem and not even the important half.
The problem for Dems is they can’t seem to pry their lips off the rancid teats of the Epstein class and admit that American workers are being ripped off by corporations and Wall Street, aka their donors.
Income inequality is the problem and corporate Dems are not taking the hint.
“Younger Americans are why movie theaters are dying! They’re not having babies! It’s all their fault!”
Younger Americans can’t afford a movie let alone a baby.
Bringing inflation down doesn’t roll back prices and it doesn’t raise wages.
Dems will win seats in November but will NOT have a massive tsumani as predicted because A, polls are stupid, B, Dems won’t do what’s needed, and C, Dems are standing by watching as a PDFile rigs everything he can and is clearly planning another insurection.
And in 2028 we’ll be right back here again, listening as history goes rhyming along.