In a presidential election year, we think, as always, about the issues. What should we do, what should we fix, how should things be? The big questions occupy our minds, and rightly so.
Hopefully, we also think about which fixes will be temporary, and which ones will be permanent.
A President can issue an executive order with the stroke of a pen; good or bad, it lasts through his term; his successor can wipe out that E.O with one of his own, just as easily. If it does good, it may only do good for four or eight years. If it does ill, it has the same potentially limited lifespan.
By contrast, if the House and Senate pass a bill, and the President signs it, then the change is locked in for a while. It’s much harder to repeal a law, though it can be done; but then again, it was hard to pass it in the first place.
So it is that we don’t think only of electing Presidents; we should try our best to elect state legislators and county board members, and federal congressmen and senators as well, to stop the other side from passing bad bills, and better yet, to pass good bills ourselves that lock in the right policies for a while longer.
Of course, it should never have been this important. The Framers, working in that hot Philadelphia summer of 1787, designed a federal government for us that would be severely limited in size and scope. We shouldn’t need to worry so much about what goes on in Washington, because Washington wasn’t ever supposed to have the power to do very much. Tragically, however, the horse left that stable a century ago.
We all think of these issues at election time, in terms of who should hold political offices, but we sometimes forget that the same differences – between a short term fix and a long term fix – apply to other ways that society chooses to address our problems. Everything isn’t about politics.
Let us turn to inflation.
Throughout the Biden-Harris regime’s four-year parade of errors, we have watched ill-conceived federal actions – their war on energy, their assumption of student loans, their attacks on household appliances and automobiles, the Federal Reserve’s record printing of money – have caused massive inflation, not only here in America but around the world. The American economy has a great reach; American government mismanagement hurts more than just Americans.
But we often forget that there are choices made in the private sector that can be just as destructive in the long term as government choices. A few examples:
During the period of upheaval known as the Covid years, most trucking and warehousing companies couldn’t hire enough truck drivers and dockworkers for their demand; drivers with a CDL and a good record could practically name their own salary. Some companies wisely offered one-time bonuses to gain and keep good employees, and were able to stop when the recession kicked in and the work available no longer supported such high salary levels.
Other companies, particularly those unionized companies unlucky enough to have a contract negotiation during the busy period, were talked into locking in huge permanent salary increases, as if that clearly temporary boom would last forever. When the bottom fell out in 2022, these companies were contractually stuck with an inflated cost structure despite the business drying up.
Many American consumers, whether convinced of the outrageous hoax known as “manmade climate change” or merely with eyes clouded by state and federal subsidies, bought electric vehicles before all the news was out about them. They catch fire without warning, the slightest crash requires that they be totaled because they’re irreparable, their full-charge range is invariably far less than advertised, making them utterly impractical for most of us, and when their batteries fail, it’s a ten to twenty thousand dollar expense.
Oh yes, and they have practically no retail market, since nobody dares purchase a used one. But once bought, that auto loan payment is as good as permanent, even if the recession causes the purchaser to lose his job or take a pay cut to keep it. You’re stuck making these payments long after the bloom is off the rose.
The Biden-Harris years have been known for crippling mortgage interest rates, running between two and three times the mortgage rates of the Trump years. Coming at a time when the mass importation of millions of illegal aliens per year is clogging up all the affordable housing stock, countless homebuyers have purchased houses and condos at unsustainable prices, instead of just staying in expensive rentals and waiting out the housing price bubble.
This combination of overpriced houses and record-high interest rates have locked millions into the status of the permanently broke, pouring far greater percentages of their income than they should into their housing. By purchasing at these inflated prices, they incentivize other homesellers to continue to overcharge. The first rule of sales is that you charge what the market will bear, after all, and this too increases the average pricing of housing stock for everybody.
There are thousands of such examples, all across the economy. High temporary costs cause people to choose either a one-time hit or a long-term inflated price. Those who choose the long-term inflated price are helping to lock in the inflation of the Biden-Harris years. Long after that malevolent regime is consigned to the ash-bin of history, their legacy of permanently inflated prices – of the destruction of the dollar as the globe’s reserve currency, in fact – will remain, and many of these concurrent private sector choices will share the blame.
How many union employers have locked in permanent, guaranteed wage increases based on a momentary good year that ended as soon as they signed their union contract?
How many young people, overconfident in their earning power on the heels of a good raise or a good bonus, paid too much for a house or car, doomed to find it unaffordable a year or two later when their struggling employers had to freeze raises or terminate annual bonus programs?
How many companies built expensive headquarters, or factories, or office buildings, confident that the boom of the Trump years would carry them forward forever, only to hit a wall when the states started shutting down their power grid, when they could no longer get good employees because the government paid them more to stay home than they earned when working, or when their customer base dwindled as overtaxed citizens moved out of their doomed blue states to live in more rational red ones?
Yes, government causes much of our inflation problem. Government taxes and regulations drive up companies’ costs, so the businesses have to pass on these costs in their products’ pricing. The easy money of Quantitative Easing is the most direct cause of inflation, but these indirect government causes – the taxes and red tape, the subsidies that make poor choices almost irresistible, the unsustainable government employee pensions that require ever higher property tax and income tax levels – these have an even more inflationary effect over the long term, because they are harder to reverse.
If the central bank sets a 1% interest rate today, it can double or triple that rate tomorrow. But if government promises a 90%-of-salary pension to already-overpaid school district or state department administrators, that’s a guaranteed expense that can never be clawed back by a future, more fiscally-responsible administration.
And when a state government closes down a productive coal or nuclear power plant because some gullible legislators are afraid of the carbon dioxide they themselves safely exhale 24/7, breaking the bank by building countless windmills and solar farms that will never produce as much energy as went into building and installing them, then too the government has caused a permanent cost increase that must be matched in the private sector by permanently higher prices to cover these utility bills (or for everyone to buy their own generators to insulate themselves from the risk).
When people have higher costs, they have to charge more. And when people charge more – whether for goods or services – that’s inflation.
We have a choice in November:
Do we elect the people who promise a short term fix – the ones who offer to issue a stimulus check or a temporary pause in a student loan, further contributing to the inflation problem anyway so it’s no real net benefit in the end…
Or do we elect the people who promise a long term fix – a return to America’s one-time status as a low-tax, low-regulation manufacturing juggernaut, self-sufficient in energy, where the invisible hand of the free market protects the people from the sinkhole of crippling debt and a shrinking standard of living?
But it’s not just about November, either. We have a choice as businessmen and as individuals, to make the wise choices for our families and our businesses. We can think ahead to the future, and resist the temptation to take on more debt when interest rates are high. We can win employees in competitive times with temporary bonuses, so that we can return to a more affordable pay scale if the economy gets rougher. And we can always remember that corrupt, tax-and-spend Democrats can always take over again and wreck the economy, so we should always prepare for a rainy day.
In a free market, as in a republic, we are indeed “all in this together.” The times cry out for fiscal sanity and long-term thinking; both talents are unfortunately in short supply nowadays.
Copyright 2024 John F. Di Leo
John F. Di Leo is a Chicagoland-based international transportation and trade compliance professional and consultant. A onetime Milwaukee County Republican Party chairman, he has been writing a regular column for Illinois Review since 2009. His book on vote fraud (The Tales of Little Pavel) and his political satires on the current administration (Evening Soup with Basement Joe, Volumes I, II, and III), are available in either eBook or paperback, only on Amazon.
His newest nonfiction book, “Current Events and the Issues of Our Age,” was just released on July 1, and is also available, in both paperback and Kindle eBook, exclusively on Amazon.
If you enjoyed this article, then please REPOST or SHARE with others; encourage them to follow AFNN. If you’d like to become a citizen contributor for AFNN, contact us at managingeditor@afnn.us Help keep us ad-free by donating here.
Substack: American Free News Network Substack
Truth Social: @AFNN_USA
Facebook: https://m.facebook.com/afnnusa
Telegram: https://t.me/joinchat/2_-GAzcXmIRjODNh
Twitter: https://twitter.com/AfnnUsa
GETTR: https://gettr.com/user/AFNN_USA
CloutHub: @AFNN_USA
Remember, John, the people financing the puppets doing this have openly declared their vision of the future is ‘you will own NOTHING’. (Klaus Schwab, WEF)