Democratic economist Gary Cohn refuses to let President Joe Biden ignore the American people.
To help Mr. Biden’s re-election bid, the Biden administration is pushing a tone that is more bark than bite on the economy. For example, in last week’s State of the Union address, Biden claimed to have minimized inflation and created “15 million new jobs” and blamed corporations for high prices. is called “shrinkflation.”
But the truth is not the rosy picture Biden painted, Cohn said Sunday on CBS News’ “Face the Nation,” especially when it comes to inflation.
“Inflation has a compounding effect, which means that when you look at inflation from year to year, the numbers add up. They don’t start at zero each year,” Cohn explained. “If last year’s inflation rate was 6% and the current inflation rate is 4%, the inflation rate is 10%.”
“Inflation has a huge cumulative effect,” Cohn said, so in a 10% inflation scenario, a basket of groceries that once cost just $100 would now cost more than $125 due to the “buildup” of inflation. He said it means to become.
“So when people are being told, ‘Consumer, you’re wrong, inflation is rising.’ [down]”No, they’re right. Is it actually more expensive?” host Margaret Brennan followed.
“They’re absolutely right. They’re absolutely right,” Cohn responded.
Not only is inflation cumulative, but what Biden doesn’t teach us is that lower inflation doesn’t mean lower prices. Instead, prices continue to rise, but at a smaller rate. This is an important distinction, and it is here that Biden’s positive message on inflation is lost in reality.price it’s not The dollar’s purchasing power has declined.
All about Biden’s talk about lowering inflation and food. Americans spend 25% more today From January 2020.
This is why poll after poll shows Americans are dissatisfied with Biden’s economic performance. Combining inflation with the high interest rates that the Federal Reserve justifies for suppressing inflation is bad for re-election.
“People are losing purchasing power, and that’s why people are angry,” Cohn said of the inflation crisis. “Add to that the high interest rate environment, and you end up taking out a 7% or 8% mortgage, thinking you might have been in a position to buy a house because you saved money, and you can’t afford to buy a house.
“People were very frustrated because the cost of daily living had become so high that the cost of buying a home and investing in the future was almost impossible,” he explained.
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