- 87% of respondents in the latest TIPP Poll are deeply concerned about inflation
- Bidenflation has driven up prices significantly, with food, energy, gasoline, and used car prices all surging
- More than half (52%) feel their wages haven’t kept up with rising costs
- Wage increases historically worsen inflation, posing a challenge in controlling overall price rises
- Strongly unionized sectors have successfully secured wage hikes through strikes, contributing to ongoing inflation
The latest TIPP Poll, completed earlier this month, shows that nine in ten (87%) survey respondents are concerned about inflation. Since January 2022, inflation concerns have stayed above 85% without any signs of softening. The “very concerned” share has been over 50% for twenty-one months.
Bidenflation, as measured by the TIPP CPI, which catalogs price increases since President Biden’s first full month in office (February 2021), has reached 17.0%. Food prices increased by 20.0%, energy prices went up 34.5%, gasoline by 44.8%, and used car prices by 23.1% since President Biden took office.
When people can’t cope with such astronomical rises in the cost of living, they insist on wage increases. But in our poll, over half (52%) say their wages have not kept up with inflation, with only 24% saying their income has kept pace with inflation. The question is whether wage increases help or hurt tame inflation overall.
As we noted in May, wage increases tend to exacerbate inflation, although they provide welcome relief to families that win those pay raises. Milton Friedman’s warning – “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output,” is as accurate today as it was when he first said it. In a healthy economy, wage increases should be tied to worker productivity when workers produce more widgets/goods for less.
Friedman was referring to government-induced inflation, but the point still holds. The only way to beat back inflation at the national level is to limit the money supply, which the Federal Reserve is trying hard to do by keeping interest rates high and stopping quantitative easing. But things haven’t been working well.
Workers in well-organized sectors, represented by aggressive employee unions in crucial industries such as the public sector, education, media/entertainment, transportation, and manufacturing, have the best luck in winning wage increases from their employers. These represent the 16% of employees in our TIPP poll.
In part because of the West’s foolish obsession with weakening Moscow by strangling Russian energy exports, Europeans first began taking their frustration to the streets, protesting how interest rate increases and war policies were hurting their wallets and lowering their standard of living. Labor strikes followed in Germany and the United Kingdom, with employees demanding and winning wage increases.
Six weeks later, those strikes arrived in America, including at UPS, Hollywood screenwriters, Los Angeles hotel workers, Hollywood actors, and the automotive sector. Inflation remained at the core of worker grievances; in each case, workers demanded higher wages to cope with rising living costs and won significant concessions in their contracts.
When workers get more money for the same work, businesses will try to raise the price of goods and services, knowing that families with the extra cash can afford such an increase. Central banks, attempting to slow down inflation, will tighten the money supply through higher interest rates and stricter lending, resulting in even higher costs for families when borrowing to buy a car or taking out a mortgage. Workers will then strike again, demanding even higher wages. It is nearly impossible to stop this cycle.
Our warning in May is now playing out between the auto companies and the UAW. While workers at Ford and Stellantis are likely to approve new contracts, workers at General Motors may only do so by a squeaker. The New York Times reported last week that GM’s offer to workers is extraordinarily generous. “The tentative contract raises the top wage by 25 percent, from $32 to more than $40 over four and a half years. Workers who were recently hired will see their hourly wage double.”
Yet, traditional workers at GM are unhappy. They are beginning to vote against this contract, although the increase is more than the combined pay increases the union has won over the past 22 years. They are demanding even more concessions to health care contributions and pensions, further increasing their income. GM workers are not making more cars per hour, but their wages are increasing significantly.
Only about 6% of the American workforce is in private unions, but as the Times notes, some non-union plant workers have also won substantial wage increases. “Toyota has told workers that it will raise hourly rates by 9 percent in January. Honda and Hyundai will lift wages by 11 percent and 14 percent next year. Hyundai plans to increase wages by 25 percent by 2028.”
What all of this means is that the prices of most items will continue to stay high, dealing a big blow to the majority of workers who can’t negotiate salary increases. The Biden administration’s reckless borrowing and spending policies have resulted in causing the underlying inflationary disaster.
It is little wonder that 66% of Americans say the country is heading down the wrong track.
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Geopolitics And Geoeconomics
Israel and Hamas have agreed on a deal to release 50 hostages being held in Gaza during a four-day pause in fighting. The start of the pause will be announced in the next 24 hours.
Hamas says the deal will also allow hundreds of lorries of humanitarian aid, medical supplies, and fuel into Gaza. The group adds that 150 Palestinian women and teenagers will be released from Israeli jails under the deal.
The Israel Defense Forces shared a video that showed Israeli soldiers heading into the basement of a partially destroyed mosque and uncovering a base allegedly used by the Hamas operatives.
Different types of mortars, warhead missiles, thermobaric weapons, and explosive materials were found in an underground room. A whiteboard that featured plans to use the rockets and trace the paths of Israeli airstrikes was also found.
South African President Cyril Ramaphosa accused Israel of war crimes and “genocide” in Gaza as he chaired an extraordinary summit of the BRICS group of nations.
The virtual meeting of BRICS – a group of major emerging economies that includes Brazil, Russia, India, China, and South Africa – aims to draw up a common response to the Israel-Hamas conflict.
Saudi Arabia’s Crown Prince Mohammed bin Salman urged all nations during an extraordinary BRICS summit to cease weapon exports to Israel.
Saudi Arabia demands the start of a serious and comprehensive peace process to establish a Palestinian state along the borders of 1967, the Saudi Crown Prince said. Riyadh was invited to join the BRICS bloc earlier this year.
The White House said Russia’s Wagner mercenary group plans to provide an air defense system to Lebanon’s Hezbollah militants or Tehran as part of an “unprecedented defense cooperation” between the two U.S. adversaries.
The Kremlin dismissed the allegations earlier this month, saying such talk was unfounded.
The United Nations reported that more than 10,000 civilians have died in Ukraine since Russia invaded in early 2022.
The United Nations Human Rights Mission Monitoring Ukraine (HRMMU) found that many of the casualties took place outside of the areas where most of the fighting was taking place, as Russia has deployed long-range missiles toward targets in populated areas.
Russian media quoted the defense ministry as saying that Russia has deployed a new Yars intercontinental ballistic missile. The missile is capable of carrying multiple thermonuclear warheads.
As per Russia’s claims, the new missile is capable of striking through the defense shields of the U.S. and its allies. The move came hours after Russian Defense Minister Sergey Shoygu said his nation was paying “special attention to the buildup of naval strategic nuclear forces.”
Nearly 100 civilians died in clashes with security forces when Ukrainians took to the streets of the capital in 2013, demanding to move Ukraine out of the orbit of Vladimir Putin’s Russia and “join” the family of European democracies to which it “historically belongs.”
The “Revolution of Dignity” protests in 2013 ultimately led to the ouster of Kremlin-backed President Victor Yanukovych. They gave space to the rise of a new generation of anticorruption, pro-democracy movement leaders.
President Volodymyr Zelenskyy said the protests marked Ukraine’s ‘first victory’ in its war with Russia.
The Chinese government has urged banks and financial institutions to back a sputtering real estate sector where the biggest developers have buckled under tremendous debt and don’t have the capital to complete pre-sold homes to hundreds of thousands of homebuyers.
The move underscores Beijing’s dilemma of defusing local government debt risks while pumping capital into the real economy to prop up growth.
The Chinese government under President Xi Jinping is demolishing, closing, and altering hundreds of mosques in the northern regions of Ningxia and Gansu, a new Human Rights Watch (HRW) report said.
After Xinjiang, where the Uyghur Muslims are being persecuted, the north-central regions have the highest Muslim population in China. The government is cracking down on religious institutions to keep minorities in check.
Beijing denied its warship emitted sonar pulses, causing injuries to Australian Navy divers in waters near Japan.
The denial came after Australia’s Defense Minister Richard Marles said in a statement at the weekend that the “unsafe and unprofessional interaction” with a People’s Liberation Army Navy (PLAN) destroyer occurred in international waters, inside Japan’s exclusive economic zone (EEZ).
Chinese tech giant Baidu remains resistant to U.S. chip export restrictions, revealing a substantial stockpile of artificial intelligence chips that will shield its business from immediate impacts.
“The restrictions on chip exports to China have limited impact on Baidu in the near term,” Reuters quoted Baidu’s CEO Robin Li.
Baidu’s third-quarter results showcased strong performance, with revenue reaching 34.45 billion yuan ($4.7 billion), surpassing analyst estimates and marking a 6 percent year-on-year increase.
Eurostat, the EU’s statistical agency, said the pandemic played a role in the decline, with the EU reporting more deaths than births between Jan. 1, 2021 and Jan. 1, 2022.
Migration was positive during the time, with more people entering the EU than leaving it. The European Union reported the COVID-19 pandemic led to 872,000 excess deaths between March 2020 and July 2021, a 13% increase over the average number of deaths during the five previous years.
National Security Council spokesman John Kirby said “in light of … the piracy of a ship in international waters, we have begun a review of potential terrorist designations, and we’ll be considering other options together with our allies and partners as well.”
Kirby said the Houthis’ seizure of the British-owned and Japanese-operated cargo ship in the southern Red Sea was a flagrant violation of international law and said Iran was complicit.
North Korea said that it launched a military reconnaissance satellite Tuesday that entered orbit as planned, prompting Japan and the U.S. to condemn Pyongyang for violating U.N. resolutions.
Japan said it had not confirmed whether the payload had entered space. North Korea had notified Japan of its plan to launch a satellite during a nine-day window commencing Wednesday before it fired the projectile before the start of the period.
According to the Telegraph, Arturo Bejar, who left Meta in late 2021, went public with his concern in testimony to U.S. senators earlier this month.
He stated that Instagram is “categorically not” appropriate for children as young as 13 and claimed that the company had failed to act on his concern. With his testimony, Mr Bejar added pressure on the tech giant over its effect on teenagers.
Peaches, nectarines, and plums tainted with listeria have caused one death and put ten people in the hospital with food poisoning across seven states. The death from listeria infection occurred in California.
The CDC says the outbreak has been traced back to whole peaches, plums, and nectarines produced by HMC Farms and sold in 2022 and 2023 between May 1 and Nov. 15 of those years. The CDC urges consumers to check their freezers for the recalled fruit and throw it out.
For some, drinking red wine, even in small amounts, causes a headache, typically within 30 minutes to three hours after imbibing just a small glass.
Researchers now think they’ve cracked the mystery of why some people get “red wine headaches,” even if no other alcoholic drinks do the same. Quercetin, a flavanol found in fruits and vegetables, appears to be the culprit, according to findings published in the journal Scientific Reports.
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Republished with permission from TIPP Insights