by Mitch Kokai
Senior Political Analyst, John Locke Foundation
David Goldman writes for the Asia Times about the political impact of rising prices.
Republicans and independents together comprise more than 70% of the American voting public, and their view of US economic conditions plunged to new record lows in August as inflation ground higher. That’s already provoked a revolt in the Democratic Party against White House spending plans, and sets the stage for a Republican landslide in the 2022 Congressional elections.
The University of Michigan breaks down its widely-followed survey of consumer sentiment by political affiliation, and the August reading for Republicans – at just 50% – is the lowest since the survey began half a century ago. The sentiment of independents came in at 66, the lowest since the Great Recession. Notably, Democrats showed more optimism, but their gauge fell from 107 in April to just 92 in August.
For the overall consumer sentiment index, a reading close to 60 corresponds to the depths of previous recessions in 1980 and 2008.
For big-ticket consumer items like shelter and cars, price hikes are the worst on record. The average rent on a new apartment jumped 10.3% year-on-year according to Real Page Inc, a multi-family property manager, and renters signing a new lease paid an average of 17% more than the previous tenant. With occupancy at a record 96.9%, the rental market has no capacity to spare.
The US government’s Consumer Price Index reports a year-on-year increase of just 2% for rent of primary residence as of July, compared with more than 12%, according to apartmentlist.com, a leading rental website. …
… Inflation is the reason for West Virginia Democrat Joe Manchin’s defection from the Democrats’ paper-thin majority on the Senate. “An overheating economy has imposed a costly ‘inflation tax’ on every middle- and working-class American,” Manchin wrote in a Sept. 3 opinion piece for the Wall Street Journal, explaining his grounds for opposing Biden’s proposed $3.5 trillion stimulus.
“I, for one, won’t support a $3.5 trillion bill, or anywhere near that level of additional spending, without greater clarity about why Congress chooses to ignore the serious effects inflation and debt have on existing government programs,” Manchin added.