Prices

During the Biden administration the federal government pumped massive amounts of money into the system

Reality dictates that it’ll take longer for prices to come down than a little less than a year--especially when the Democrats and their allies are doing everything they can to obstruct the President’s policies. Next year, as domestic manufacturing increases, and the foreign investments he has secured go into action, I believe the prices will come down more. But, we have to remember, the primary driver of inflation, besides the cost of doing business, is the amount of fiat money in the system.

During the Biden administration the federal government pumped massive amounts of money into the system. The Democrats adhere to Keynesian economic principles which state that economies are consumer driven and the way to fix poor economic conditions is to “prime the pump” with an influx of government-created money. However, the problem is, when dollars increase without value in the system keeping pace, it creates inflation (the dollar’s value is reduced, and it takes more dollars to purchase items as a result).

It is sort of like what we’ve seen with the bachelor’s degree. With the hard push of everyone going to college, and the government using taxpayer funds to encourage it, more people have bachelor’s degrees, but the need for those degrees has not kept pace. As a result, the value of the degree has decreased, and now if one wishes to land a reasonable position in the professional world, one needs a master’s degree.

Too many bachelor’s degrees being added, outpacing the value in the system (number of jobs available requiring the degree) has caused, in a sense, inflation in the job market and that’s why a kid’s college degree in many cases has not gotten them out of mom and dad’s basement, yet.

The Democrats under Obama and Biden, especially the latter, pumped so much money into the system, they’ve in a sense created a one-way ticket to rising prices for a while. When coupled with the cost of doing business also being on the rise, the inevitability of runaway inflation could not be stopped. President Trump understands this. However, fiat money in the system is not the only factor that drives up prices. Supply and demand, and the cost of doing business are also driving factors. So, he can’t do anything about the fiat money in the system, so he’s trying to get the system to catch up to the money by adding value in the system with increased manufacturing, increased economic productivity, decreasing taxes and regulations, and increasing the supply of goods and services with both domestic production and carefully chosen imports.

As a result, slowly, prices are coming down. Unfortunately, the average person isn’t considering all that I have laid out. The only thing they see is their wallet, and the price tag on the merchandise they purchase. In particular, gasoline and food. I get that. We call those things “kitchen counter issues.” An economics lesson is not what most Americans want to hear. They want dropping prices. And while President Trump is driving down prices the best way he can, due to the influx of fiat dollars into the system it’ll be a slow ride, and some prices will never come down…but their increase may be slowed down.

Yes, people vote with their wallet, but before we start throwing stones, let’s take everything into account. Don’t listen so closely to the media because they want you to believe President Trump is failing and not delivering on his promises. And for those of you in deep blue areas, understand that your prices are probably not leveling off. In fact, in places like California they are probably still on the rise. 

People from California come to my town to shop and get gas because it is so much cheaper

That has nothing to do with Trump, and everything to do with the policies of those areas. Increased taxes, fees, regulations, and a whole host of other idiotic policies have created an interesting dynamic. While in red-states prices are coming under control, it’s not happening in the same way in blue states and very large cities. Gasoline prices and certain grocery items I buy while I travel revealed to me this truth during the year as I found myself traveling the country for speaking engagements. During my travels, I witnessed that while gasoline prices were well over five dollars per gallon in California during much of the year, Arizona once you got east of Phoenix was just a little bit north of three dollars per gallon. 

Once I got east of Arizona, I never saw gas above 2.99 per gallon (and in many places hovering around about a two and a half bucks) until I got to Mobile, Alabama where it was a tad over three. In much of the eastern southern states it remained close to three dollars, as well as through the Midwest. Once I got west of Minnesota, the prices shot well below three dollars per gallon again. Here where I live in a red zone of blue Oregon, we were paying at the time about 3.85. Now, we are hovering around 3.60. California is still around five dollars, though it has dipped to the high-fours of late, and in Northwest Arkansas, according to a friend of mine, prices are 2.18 per gallon.

As for groceries, there is a major grocery store in a California town just south of where I am at, and for a good number of the items on the shelves their prices are four times what they are at the major store in my little Oregon town. People from California come to my town to shop and get gas because it is so much cheaper.

I bring this up because I found myself surrounded by folks in San Diego, California on one particular thread stating that prices have not come down, and when I responded with something to the contrary, I was accused of living in a bubble. As I told the group, “Prices are lower this time of year more than they were last year on most items. The media is focusing on a handful of things to try to prove the prices have not been coming down. Don’t fall for the B.S.”

The response was quick, and filled with California political darkness doom and gloom. “Nobody can afford anything. Food has sky rocketed same as homes. Companies and stores are struggling to slash prices…[cheap alternative meals] are making a massive comeback and this is a huge sign of a recession…until I see it all turning around for every single American that are not billionaires then I will think otherwise. Everyone is hurting. The job market is chaotic. Chat with the younger ones. You’ll see. Home ownership is a distant dream on top of it all…I predicted the crash in 2008. I see the signs of it back.”

Another told me, “EVERYTHING IS MORE EXPENSIVE!!!!!!”

Another commented, “I am not falling for the B.S. Prices are not coming down in any way in any sector in any situation here in California. I travel five states twice a year and nothing is going down in those states whether they are blue or red…I am so sick of being told the economy is great. Drill baby drill. Energy independence. And yet Trump is going to do a coup in Venezuela…Doug, you are living in a bubble.”

Trump has denied he is looking for regime change in Venezuela, domestic drilling will increase the supply (remember that supply and demand economic principle?) which will push down prices further, and I never said the economy is “great,” but that it is improving. And yes, it is improving, thought slowly. But, you see, this is what happens to folks when they are bombarded by leftist policies in a place like California, and leftist information by most of the sources we have buzzing around our heads.

It is easy for us to believe the whole country is like where we live, and the same is true for Californians. They start believing there is no end in sight, then start listening to the media whose desire is to make us feel like there’s no hope, and then we start latching onto things like, as one said, “explain why we gave 4 billion plus to Israel.” I gave a Christian, “we need to support Israel” type of answer; but the real key is that that has nothing to do with our situation. Is the person suggesting the government should have pumped that alleged four billion (and in military aid the amount is actually much much much more) into the American economy? Didn’t I explain that government pumping money into the system is a bad thing?

Unfortunately, we live in a time where we want instant gratification. The Democrats have been working to screw up our economy for a long time. There is no massive quick fix out there where a wand can be waved and suddenly everything is good. It takes time. And some places, like Commiefornia, is not going to feel the improvement instantly. And for them, relief may require a complete change of regime in that State. If anything, I feel like Governor Gavin Newsom is doing all he can to make sure California still gets worse. He fears, I believe, that if things got better for Californians they might think it was Trump’s doing, so for fear of Californians hoping for a liberator, he’d rather keep them in chains. Kind of reminds me of the Democrats using Americans as leverage during the idiotic government shutdown.

Let’s understand that things take time, things are improving despite the massive glut of money in the system thanks to Obama and Biden’s monetary system policies, and that the rest of the country is not California. The way to fix economic issues is not for the government to hand money to Americans. The economic remedy is to put in place policies that reduce the cost of doing business, increases domestic production, reduces imports while increasing exports (those last two something that is being done by Trump’s brilliant tariff policies), and stopping the pumping of fiat money into the system. But, like a tank full of sludge, even though you might be pumping clean water into it to flush out the sludge, it takes a while before the view becomes clear, and the water becomes clean.