I confess — I’m not a fan of incorrect claims about important matters of policy and politics, and even more so when those claims go viral and take on a meme-like quality. It seems like everywhere you go, people chat about “Bidenflation” and “Joe Biden’s inflation.” I find it quite annoying, especially since it’s extremely idiotic.
The fact is: inflation is slamming most of the world, and many notable countries have it much worse than we do here in the United States. (See video below.) An inquiring persons who actually wants to get to the bottom of things might ask, “hey, why is the world in an inflation crisis?” Well, some news you might have missed: a massive global pandemic hit the world a few years ago; countries almost entirely shut down, which meant their economies shut down; and governments dealt with the economic disruption by giving out a lot of money to keep people and businesses alive and well.
Let’s get a little more nuanced, though, since that doesn’t cover the full story at all. With the COVID-19 shutdowns, supply chains shut down and then got totally out of whack. As economies started opening up, it was like trying to restart a giant machine — and a machine that had a bunch of rust in some areas, bolts stuck in other areas, broken connections and hoses, etc. In other words, everything didn’t just switch back on all at once at the snap of a finger. This led some prices to rise — quite a lot in some cases. Those higher prices led some companies to say, “hey, we’ve got to raise prices to cover our costs and still make money.” Rinse and repeat, rinse and repeat — more prices go up, more companies have to raise prices, etc.
Unfortunately, with word going around that prices were going up, some companies (or a lot of companies) used the opportunity to jack up prices even more than needed while blaming it on the matters above*. For example: say there’s an 8% increase in your company’s costs, but your company goes on and increases the price of its product to 20% more, and simply blames it all on inflation, supply chain woes, etc. This is a key problem we’ve been having, and it goes far beyond what happens in the United States of America.
We’re rolling into the midterms here in the USA. Much power is on the line and much is being decided because of inflation. One should, in theory, recognize that US inflation is better than UK inflation, European inflation, Mexican inflation, German inflation, Turkish inflation, Brazilian inflation, etc.
What does this have to do with cleantech? Well, Democrats — with the slim majority they’ve had in the past couple of years — have passed massive cleantech packages, the Inflation Reduction Act of 2022 and the Bipartisan Infrastructure Law. Elections have consequences. The Republican Party is heavily supported by fossil fuel companies, because the GOP time and again does the bidding of fossil fuel companies and fights cleantech progress. Democrats have brought historic cleantech progress policy wise, and removing them with Republicans will no doubt halt such progress and perhaps even try to reverse it. Vote wisely.
As an addendum, here’s a comment from a professional economist highlighting some points I unfortunately didn’t highlight:
This argument is good to see, but it leaves out two huge factors that have driven higher prices that are not due to economic policy or practice.
First is the Ukraine war and its complete re-altering of all buyer-seller relationships in energy, especially natural gas, plus grains. Most of Eastern Europe, especially Germany and Poland relied greatly on Russia for natural gas, and now they are all trying to untie themselves from using Russian supplies at all. This greatly increases all energy prices in Europe, and then worldwide. The US, for example, sells natural gas and oil worldwide and these prices sky rocketed, which led to prices on our shore doing the same.
Similarly, worldwide markets for wheat, barley, corn, and some oils have been crippled as Ukraine is a huge supplier usually but its supplies have been cut or shipments have been delayed because ships cannot get easily out of the Black Sea. These markets greatly affect all markets for what we eat, including meat, as these grains are also used to feed animals.
Second, the zero-covid policies in China have hurt prices for all products that we purchase from China. This new feature creates supply-chain problems on steroids. Every country that buys products from China is affected by this.
Neither of these two factors has anything to do with Biden and his performance handling inflation through the Fed. As a professional economist, I’d guess that something like 2/3 of our inflation is due to these two causes.
*And here is another comment highlighting a key fact on this matter:
Katie Porter pointed out in hearing the other day that 54% of all price increases has gone directly into the record profit margins. That means 54% of all inflation is caused by the CEOs choosing to maximize this opportunity to return profits to the share holders in our capitalist society. As Warren Buffett said this is class warfare and his class is winning.
Don’t blame politicians for capitalist greed. Blame them for not taxing those profits out of existence if you like but the GOP will only lower taxes on the wealthiest and corporations. So they are not the solution to greed driven inflation.
I do blame the media for not presenting other alternatives to addressing the problem of inflation. The mindset that the federal reserve has the only tool to handle inflation and it happens to put 100% of the burden onto those who lack liquidity and need to borrow money to buy stuff in our society is fundamentally flawed logic. Raising interest rates on the working class in the hope that the wealthy will lower their profit margins is insane. It is putting the burden onto the powerless people not the leaders of corporations that are literally responsible for 54% of the problem with their record profits.
Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.
CleanTechnica Holiday Wish Book
Our Latest EVObsession Video
CleanTechnica uses affiliate links. See our policy here.