Inflation 2021

 

The other day my wife came home with some shocking news. She had been to the supermarket where she found that the price of Shredded Wheat,  the cereal that I have every day for breakfast, had risen to $4.00 a box. For as long as she could remember, it had been about $3.20 a box. The eighty-cent increase might not seem like much, but it is actually an increase of 25%.

 

What could have caused such a dramatic increase? The box and its contents have not changed. I don’t think that there has been a substantial increase  in demand that would cause the producer to jack up prices since Shredded Wheat  does not fly off the shelves like Cheerios.

 

Some think that supply issues might be the cause. Shipping and transportation tie-ups are in the headlines. Nevertheless, the increase in price of my favorite cereal would seem to be due to inflation. My wife tells me that everything has gone up in price in the supermarket.

 

Recent news items confirm my wife’s observations and indicate that inflation is indeed with us. Gasoline prices have risen sharply at the pump, and there is even talk that Social Security benefits will increase next year by about 6%. These increases are signs of inflation, but they are not the cause of inflation.

 

Another way to look at price inflation is to realize that it is not the value of particular products or services that has gone up, but that the value of the dollars we use to buy them has gone down. In the case of Shredded Wheat, it now takes four pieces of paper rather than three to buy a box.

 

Fifty-five years ago, we bought our first home in Fairfield for $20000. It was a modest home in a nice neighborhood. Eleven years later, the increasing size of our family led us to sell it for over  $60000, more than triple what we paid for it. Today, it is worth about $600000. The neighborhood is about the same, and even though succeeding owners have made some improvements; it is basically the same house.  The value of a dollar has so shrunk in the past 65 years that it now takes 600000 of them  rather than 20000 to own that home.

 

Economists disagree over the causes of inflation, but there is obviously a monetary component. A substantial increase in the supply of any commodity, whether it is coffee or oil, will inevitably cause its price to drop. Why shouldn’t the value of our currency decline, if the government substantially increases the printing of money, especially if it is deeply in debt to begin with?

 

The stimulus checks we received during the pandemic put dollars in our pockets, but the dollars we received were obviously a factor in the inflation we are now experiencing. After all, the Federal government did not have the stimulus money in some kind of rainy-day account. It had to print and borrow. In a way, it is like those people who max out their credit card, and then use another one to pay it off.  Instead of looking to the Federal government to deal with inflation, we should realize that our government  is largely the cause of rising prices.

 

The new multi-Trillion spending package that Democratic and Progressive politicians are trying to push through Congress will inevitably lead not only to higher taxes, but also to more inflation. Whatever the size of the final package, only a small percentage will go to real infrastructure improvements.

 

 A greater amount will certainly go to shoring up the almost bankrupt pension funds of Blue states whose Democratic politicians have based their careers on pandering to the demands of public service unions, their main source of political contributions. Injecting billions of dollars in these pension funds may avoid bankruptcy but the resulting inflation will eventually erode the spending power of the actual pensions these retirees receive. 

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Note: Here is assessment of inflation by Henry Hazlitt whose 1946 book, Economics in One Lesson, is a revered classic. It was revised and updated in 1979.

 

Inflation itself is a form or taxation, which usually bears hardest on those least able to pay. On the assumption that inflation affected everyone and everything evenly (which, we have seen, is never true), it would be tantamount to a flat sales tax of the same percentage on all commodities, with the rate as high on bread and milk as on diamonds and furs. Or it might be thought of as equivalent to a flat tax of the same percentage, without exemptions, on everyone’s income. It is a tax not only on every individuals expenditures, but on his savings account and life insurance. It is, in fact, a flat capital levy, without exemptions, in which the poor man pays as high a percentage as the rich man. (p. 176)

Columbus Day and Indigenous Peoples Day

As Columbus Day morphs into Indigenous Peoples Day in parts of the USA, it is ironic that many of the people calling for the removal of statues of Columbus, or for his elimination from our school history books are people that now call themselves Hispanics.*

 

Who do these people think were on the Nina, the Pinta and the Santa Maria back in 1492? Other than Columbus, they were all from what is now called Spain. Columbus, the leader of the expedition, came from Genoa which is now part of Italy. The Spanish crew, especially the Pinzon brothers who captained the Nina and the Pinta, disliked and distrusted Columbus despite his obvious seamanship and great experience on the high seas. 

 

Once they landed on an island off what Columbus  thought was Asia, he had an extremely difficult time controlling the cruelty and rapacity of his crew in their dealing with the natives they found there. 

 

 

The indigenous islanders themselves were not much better. Modern feminists might be surprised to discover that native men freely shared their women with the new arrivals. After all, what was a woman for, except work, sex, and childbearing? Indeed, indigenous people from other islands often took women captive to breed them so they could feed on their infants.

 

Anyway, in subsequent voyages thousands of Hispanics, the ancestors of today’s protestors, came to the New World and increased the level of cruelty and brutality. It is true that Columbus, participated in this ill-treatment, especially after he found that the settlers he had left behind on his first voyage had all died in suspicious circumstances. Eventually, Columbus lost control over the situation and on one trip was even arrested by the Spanish governor and sent back to Spain in chains.

 

Despite the efforts of Queen Isabella who insisted that the natives of the islands were her subjects, and therefore could not be slaves, the practice of slavery and colonial brutality grew worse. The story was told long ago  by Bartolomeo del las Casas, an early settler who became a priest, gave up his own slaves, and worked for the rest of his life to protect the natives from the ravages of the colonizers. 

 

The efforts of Las Casas were mirrored a couple of centuries later when Junipero Serra, another Franciscan friar, built a mission system in California in the eighteenth century to protect the  natives from the brutality and rapacity of Hispanic colonizers. Only after the Mexican government shut down the missions in the nineteenth century were the natives thrown to the wolves. For his efforts, the Catholic church has canonized Fr. Serra, but protestors now vandalize and tear down commemorative memorials. 

 

The ancestors of these Hispanic colonizers can still be seen today as they brandish AK 47s, and brutally herd thousands of immigrants from Central American through Mexico to the American border. 

 

Although I am dismayed by the hypocrisy of modern Hispanic protestors, I do not want to single Hispanics out as particularly evil. Slavery has been practiced all over the world by all kinds of people. Before African slaves could be sent to the New World, they had to be captured and chained by black tribal leaders and Moslem slave traders. Only then could European slave traders transport them to the Americas. Even indigenous American Indian tribes owned black slaves. 

 

Where did this evil come from? In the Declaration of Independence, the Founding Fathers wrote that all men were created equal, but they did not believe that all men wound up equal. They meant that all humans had the same nature. We are all human despite our gender, or the color of our skin. 

 

In the eighteenth century there was a great debate about human nature among intellectuals. A few novel thinkers rejected the time-honored idea that all humans are imperfect; that we could be capable of great things but that there was a flaw in our nature that could lead us to do wrong or evil. Christian theologians called it original sin and believed we had all inherited it from our first parents.

 

The new thinking of the so-called Enlightenment rejected the notion of original sin and claimed that we are all created perfect or good. The evil in the world could then be traced somehow to corrupt social norms or traditions. The cure for evils like slavery would then lie not in perfecting human weakness, but in reforming society and ridding it of its various ills. 

 

Along with this new theory came a new myth, the myth of the “Noble Savage,” that believed that the indigenous peoples of the New World lived in a state of nature where all was happiness, peace, and serenity. Only when Europeans brought their civilization to America with all its social ills, including religion, was the paradise of the noble savage corrupted and destroyed in the same way that the serpent corrupted Adam and Eve in the biblical story.

 

The myth of the noble savage was not based on any real historical evidence. The proponents of the idea despised and ridiculed the primitive peasants of their own countries but praised the primitive indigenous people of the New World whom they had never seen.

 

Nevertheless, the myth of the noble savage has become pervasive in our own time. So, instead of a human being, capable of good and evil like the rest of us, Columbus has become an evil agent of white supremacy, the man who destroyed the pristine paradise of the New World.

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*Note: I do not understand why I, a descendant of immigrants from Italy, am considered "white" and inherently a "white supremacist," while the descendants of immigrants from Spain are not considered "white" and therefore free of any taint of white supremacy. 

COVID deaths: Who's to Blame?

  

     

 

In the Presidential debates last year candidate Joe Biden blamed President Trump for the deaths of 225000 Americans during the Covid pandemic. To my mind it was the lowest point in Biden’s long lackluster career in politics. In fact, his charge, echoed by his running mate, Kamala Harris, and many other prominent Democrats, could easily make the top ten list of dirty, despicable campaign smears in American history.

 

Typically, neither Biden nor Harris blamed Democratic governors like New York’s now disgraced Andrew Cuomo for the high death rates in their states. Even now, they still refuse to blame Cuomo after it was revealed that his administration fudged the death figures to avoid looking bad. Nevertheless, Democratic New York and New Jersey still lead the nation in deaths per million. New Jersey is the leader with 3077 deaths per million, and New York is second with 2863. 

 

During 2020 I kept close count of the coronavirus figures and even ran a spread sheet that compared state by state results, as well as country by country results. I put a couple of posts on this blog to show that it would be hard to blame individual politicians. Other factors were more relevant. After election day, I stopped counting. Perhaps, I sensed that the figures would no longer matter.

 

Last week, the death toll from Covid climbed to over 700000 in this country. When President Biden took office in January 2021, the death toll was 400000. But who blames President Biden? Who blames the President for the recent surge that thankfully seems to be abating? The blame has been shifted to anti-vaxxers. Speaking of vaccines, neither Biden nor Harris has ever given President Trump any credit for the incredible and speedy work on the vaccines that has been labelled one of the marvels of medical history. Kamala Harris was the original anti-vaxxer when she insisted that she would never take a vaccine developed during the Trump administration.

 

Out of curiosity I took a look at the figures at the end of September. In the United States so far there have been about 43.3 Million people who have tested positive for the coronavirus. The death toll of about 711000 is 1.62% of those who have tested positive. The death rate is well below the world average of 2.05%, especially when you consider that the USA results help considerably to bring down the world average.

 

The USA figure also compares very well with countries like the United Kingdom and Italy with national health systems. In the UK there have been 7.8 Million cases and 136741 deaths for a death rate of 1.75%. In Italy there have been 4.9 Million reported cases and 130807 deaths for a death rate of 2.79%.

 

From the beginning scientists have argued that the number of people actually infected must be significantly higher than the reported cases. I have seen all sorts of multipliers but the latest seems to indicate that the number of cases should be multiplied by 2. In other words, at least 80 Million Americans have been infected and over 79 Million have survived. 

 

A columnist in my local newspaper recently reported on his bout with Covid. He had been vaccinated but thought little of it when he developed symptoms of a postnasal drip. However, he decided to get tested after spending time with a granddaughter who subsequently tested positive. Sure enough, he tested positive and even though his symptoms did not get worse, he made a brief trip to the hospital to get antibody treatment because he had certain co-morbidities. That was it. He quickly recovered and went about his business when doctors told him he could not infect anyone after 14 days. He became one of the more than 99% of Americans who survived Covid infection.

 

Of those who have not survived, the great majority were elderly or laden with co-morbidities like diabetes or obesity. Newspapers and other media can always feature exceptional anecdotes, but the data has always suggested that the young and healthy are not at any more risk than during a normal flu season.

 

In the past I have refrained from blaming anyone for what is a world-wide pandemic, but Joe Biden was wrong to blame President Trump back in 2020 and he is equally wrong in not giving him any credit now for initiating Operation Warp Speed that produced the vaccines in record time.   

 

 

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