Biden has lost on the inflation issue
While six months is admittedly a lifetime in politics, as the head of a Wall Street macroeconomic research firm, I can say with great confidence that, as far as the November election is concerned, the issue of inflation is settled, and President Biden has lost. There is not enough time to change the fact that over the last three years, the average person’s purchasing power has declined meaningfully.
How do I know? Tired of wading through measures of inflation from academics and other expensive “experts” that bear little resemblance to the cost of living for the average person, we created our own measure of the consumer price index that includes only what people must buy regularly. Deeming it our Common Man CPI in a nod to the great American composer Aaron Copland, we include only food, energy, housing, clothing, insurance and utility costs. Everything else — from flat-screen televisions to trips to Fort Lauderdale — is excluded.
What we found would not be surprising to anyone who has bought groceries in the last few years or doesn’t have Mom and Dad pay their bills. While wages have risen 15.1% since Mr. Biden took office, the Common Man CPI is up 21.2%. In other words, the standard of living for the average American has deteriorated by roughly 6 percentage points over the same period.
Even with this month’s as-expected inflation numbers, our Common Man CPI has outpaced the Bureau of Labor Statistics’ headline number for nine consecutive months and 34 of the 40 months since Mr. Biden’s inauguration.
Only in the rarefied world of Ph.D.s in economics would someone have the temerity to exclude the cost of food and energy and then call such as measure “core.” Eating and staying warm or cool enough is pretty “core.” Some economists have even gone so far as to create a “supercore” measure of inflation that excludes food, energy and housing costs. How one might delude oneself into thinking that excluding food, energy and shelter from an inflation measure would make it relevant to anyone is beyond me.
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No one buys another house every week, but they all buy groceries or go out to eat and the cost of that has gone up significantly during the Biden administration. This cost also has a greater impact on retirees and those on Social Security.
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