Prices have had a hefty runup, but Biden/Harris critics seem never to mention that wages have also increased

I appreciated Rick Kahler’s thoughts on inflation a few days ago in The Standard. I’ve known Rick a long time. You won’t find a more focused and levelheaded analyst when it comes to dealing with economic issues. His comments about the inflation rhetoric we hear these days being way overblown are spot on

Rick’s piece is a reminder that a contextual analysis of inflation is what we need to hear more of these days. Yes, prices have gone up significantly since the pandemic, but wages have made some substantial gains along the way. Fact is, for the last two years, wage growth has outpaced rising prices. A report last winter from the U.S. Treasury concludes that since the pandemic the purchasing power of Americans has increased significantly.

NBC, citing data from the Bureau of Labor Statistics, reports that “since February 2020, the Consumer Price Index has climbed a cumulative 20.8%, according to Bureau of Labor Statistics data. Over that same period, average hourly earnings rose 22.3%.”

Most of the price inflation occurred from 2020 to 2022, with wages playing a bit of catch up, finally dovetailing by the beginning of last year, when both wage and price increases leveled off to a relatively tame sub-3% rate. The Federal Reserve Board is confident that the situation has stabilized, so much so that the Fed yesterday dropped interest rates by half a percent.

On the political front, recent positive news on inflation and interest rates takes much of the starch out of the Republican argument that they can handle the economy better than their Democratic counterparts.

Biden/Harris economic policies, particularly showcased by the Inflation Reduction Act of 2022, have made a positive difference.

Naturally, economists and politicians will continue to argue about how much the Inflation Reduction Act had to do with the lowered inflation and strong economic numbers of the last few quarters, but the one thing nobody can argue about is how strong and resilient the U.S. economy has been since we saw the worst of the post-pandemic crisis a couple of years ago.  

The stock market, which Donald Trump once warned would “crash like you’ve never seen before” during the Biden administration, has been strong and resilient enough to shake off the steep downturn that scared so many investors in 2022. In something of an “in your face” move, the stock market has been trashing Trump’s prediction, steadily reaching new heights throughout the past couple of years.

Trump’s assertion proving to be the hot air that it was, I see that Kamala Harris (seen above in a public domain image posted on wikimedia ) is now gaining some ground in polls focused on who can best handle the economy.

With yesterday’s interest rate cut, the Federal Reserve Board has probably added some juice to an already vigorous economic climate, leaving Republicans to argue about the economy of the post-pandemic past, as opposed to Harris’s turf, which is the present and future.

If the Republicans keeps depending on an inflationary environment that is quickly passing into memory as the central theme of the party’s economic pitch, I think they’ll fall short.  The economy has plenty of momentum and should provide the Harris campaign with some strong support as the election draws near.

John Tsitrian is a businessman and writer from the Black Hills. He was a weekly columnist for the Rapid City Journal for 20 years. His articles and commentary have also appeared in The Los Angeles Times, The Denver Post and The Omaha World-Herald. Tsitrian served in the Marines for three years (1966-69), including a 13-month tour of duty as a radioman in Vietnam. Republish with permission.