August 11: Inflation’s wrath abates… or waits?

In which, Inflation goes into hiding, Modi suddenly looks vulnerable in India, and there’s more shady business in California.

Inflation’s wrath abates… or waits?

Ding dong, inflations dead! Not quite, but almost. Still, the continuing downward trend of inflation has got lots of early reports claiming the battle is won and the economy has stuck the soft landing. Vox presents an interesting question, though: If the economy is so great, why is everyone unhappy? Why, indeed?

It could be because the “healthy” economy is not just running on massive government debt, but ballooning consumer debt as well, and that’s because wages still aren’t catching up to the losses from the last couple years worth of inflation (except for UPS drivers apparently). It could be because some major urban centers are struggling to recover from the pandemic-era economic losses and migration away from coastal blue states have drained income/tax dollars from those urban centers, which negatively impacts infrastructure and services. It could be that the large middle class is still feeling the pinch while most of the economic gains accrue to large investors, and that decline in upward economic mobility has had global implications for poverty. With downward pressure on middle class incomes and the fading possibility of a return to low interest rates, many (including my wife and I) are wondering if purchasing a home is moving beyond their reach.

These are all valid reasons for why the average person is not getting a case of the “feels” for an apparently great economy. They feel the displacement and instability in a way the more affluent do not, and it’s that affluence gap that could be a real headache for Biden and the Democrats in the coming election. The working class voters are already moving away from Biden.