The Federal Reserve System Jerome Powell spoke recently to the virtual Fed conference traditionally held at Jackson Hole, Wyoming. Powell took the opportunity to give the corporate media plenty of talking points about the inflation attacking the nation’s economy.
Of course, Powell painted the rosiest possible picture of the situation. He said that inflation “will go away soon.” He noted that price pressure would be slowing and even reversing as “supply problems” resolve. He added that it “seems unlikely” that price inflation for durable goods would continue.
As Powell is fighting to retain his job as Fed Chair, David P. Goldman wrote on Friday at PJ Media that Powell’s Fed has become the “monetary equivalent of the Kabul airport.” With more than $5 trillion of new “helicopter money” added to the U.S.money supply and placing immense stress on supply chains in industries throughout the economy, inflation is already hitting levels not seen in decades.
Goldman points out the vague and misleading reporting that has been allowed to circulate. While the official government figure for rent inflation is only 2 percent, Zillow indicates that new leases have shown a 10 percent inflation rate year-on-year this summer.
While rental inflation takes a year or more to become evident as existing leases with previous lower rates expire, Powell did not mention the coming blast of inflation in 2022 from recognized rental income increases.
Goldman also points out that the Fed’s power to control inflation is limited to reducing demand, which means higher interest rates and slowing the economy down. He says that the Fed’s approach is similar to the Pentagon’s approach in Afghanistan. That is, pretend that everything is alright for as long as possible and look for some exit plan when it becomes unavoidable.
Despite the government-approved reporting coming from the corporate financial media, real incomes are falling, and ordinary families are already feeling pain at the gas pump, grocery, and appliance store.
Goldman urges Republicans to capture and maintain control of the message on inflation. Like the disaster in Afghanistan, the problem belongs to the Biden administration. If Republicans can support any level of competence in fighting the media’s complicity, the situation sets up for a significant Republican landslide in the midterm elections next year.