By: T. Jeffersonian
Last month, the U.S. consumer price index, a survey of a variety of goods, rose 5 percent compared with a year ago. According to the Labor Department, that gain was a bit more than anticipated and the largest increase since the summer of 2008, just prior to the Great Recession when Barack Obama was leading in the polls.
The 5 percent increase has Wall Street buzzing about what inflation means for markets and the economy. This week it meant that the Stock Market fell, quite substantially. The Dow Jones closed today more than 500 points down. This was the worst stock trading week since October 2020, just before the election with Biden ahead in the polls. What all this means for average Hawaiians right now is higher prices while wages stay the same during the midst of pandemic recovery and reopening’s.
Inflation erodes the average person’s purchasing power. Everyone’s true inflation rate is different because we all buy different products and services. In Hawaii, you can expect to pay more for used cars and car rentals, furniture, airline fares, hotels and everyday essentials like groceries and gas. Used car prices rose 29.7 percent compared with last year, for example, while clothing costs 5.6 percent more than in 2019. Housing and remodeling supplies are also sky high. House prices have risen 13.2 percent nationwide and rent is up 5.4 percent from one year ago. The Federal Reserve is openly talking about raising interest rates.
Hawaii already has the lowest true value for one dollar. In Hawaii, a dollar’s purchasing power is only .84 cents. This is .32 cents lower than Mississippi where a dollar can purchase $1.16 of goods and services. Gasoline prices in Hawaii are also the most expensive in the United States. One year ago, the average gasoline price in the United States was $2.11 per gallon. Shortly after the November 2020 election, gasoline prices in American began to rise in anticipation of Biden’s policies. Now, the average price for one gallon of gas is $3.07 per gallon.
In Hawaii, one year ago, the average price per gallon of gasoline was $3.19. Now the average price per gallon in Hawaii is $3.97 cents. This is only .60 cents lower than the state’s highest ever recorded price per gallon.
All of this means your paycheck is not going as far as it once did unless your wages are increasing at the same pace, which has not been the case for most individuals.
Some financial experts say the inflation is temporary and that it is to be expected. I believe however that the quickly rising prices coupled with a less than expected April and May jobs reports paint a different, more ominous picture.
The first thing that it paints is that the Democrats have never known how to recover an economy. Taxing and spending, printing, and spending, and states like Hawaii begging and spending have always been temporary solutions. The great Democrat social program – the New Deals – never recovered the United States from the Great Depression. They were temporary solutions intended to show that there was nothing to fear but fear itself. Mobilization for World War II was the true recovery. That was the unleashing the American captains of industry and the creation of millions of jobs out of sheer necessity for our and our allies’ survival.
Secondly, these rising prices coupled with not meeting Biden’s (and Ige’s) goals for 70 percent vaccinations around July 4th is going to cause an economic stall. The nation is currently just under 50 percent vaccinations with two weeks to go. A stall will put even more pressure on the Biden Administration to pass its Jobs and Families related economic incentives. Passing these incentives will only add to our national debt and our annual deficit. I believe that the Biden Administration already knows it is coming. They are attempting to distract the forthcoming bad news with other headlines, such as Juneteenth. We will see such distractions continue and we will see the Democrats seek to blame Republicans for the problems.