INFLATION IS GOING DOWN - AS IS THE GOP

The current political debate:

Democrats: Did Donald Trump try to overthrow the Constitution in order to illegally remain in office after he lost the election?

Republicans: Hey! Gas is $5 a gallon!

Democrats: Are Republican state legislatures planning to take away women’s bodily autonomy, end access to contraceptives and destroy same-sex marriage?

Republicans: Hey! Gas is $5 a gallon!!

Democrats: Is the modern Republican Party the greatest threat to democracy in the history of the Republic?

Republicans: “Hey!! Gas is $5 a gallon!!”

As it turns out, “Hey! Gas is $5 a gallon!” is not the Yellow Brick Road to Republican Victory, taking back the House and Senate this November.

Just yesterday I noted as I drove past that the most expensive gas station here in Encino, at the White Oak Avenue offramp from the 101 Freeway, has Regular pegged at $5.15/gallon - down $1.55 from the high around the Fourth of July.

That’s in Southern California, the nation’s most expensive gas market.

The majority of gas stations in the United States are already charging less than $4 a gallon, and declining wholesale prices suggest that retail prices still have further to fall.

Food prices are also coming down.

Here’s the futures price for wheat: $12.80/bushel in June 2022, down to $7.65/bushel now, which is less two cents more than the previous lowest close of $7.63/bushel in October 2021.

All of this means that official data on consumer prices will almost certainly show much smaller increases over the next few months than the shocking numbers we’ve become accustomed to lately

After spending many months doing all they can to dumb down the debate, Republicans will have a hard time suddenly pivoting to nuanced arguments about headline numbers versus underlying inflation. So far, their main response seems to be to ignore the inflation slowdown and hope voters don’t notice.

When official data also shows a sharp decline in inflation, it will be unsurprising to see Republicans in full denial supplemented by conspiracy theories: claims that the Biden administration is faking the numbers and/or somehow manipulating the commodity markets.

Should Democrats emphasize the good news on inflation and mock their opponents’ doomsaying? Yes! Any Democratic politician who responds to falling energy and food prices with a discourse about transitory versus underlying inflation should be in a different business.

Why is inflation coming down? The policies the Biden administration has been pushing: releasing oil from the Strategic Petroleum Reserve, urging gas stations to pass on declines in wholesale prices, efforts to unsnarl supply chains, have contributed. But reading over Adam Tooze and Paul Krugman, it really does seem the main story is likely a global economic slowdown: we probably aren’t in a recession, but Europe probably is and China continues to hobble itself by its zero-Covid policy mass lockdowns.

Unfortunately, as both of them point out, these reports cover transitory inflation, not core inflation. To deal with that, both reluctantly say the Fed is doing the right thing by raising interest rates.

However, for the moment, inflation is headed down. This will no doubt dismay Republican politicians who were counting on gas prices to deliver a red wave in November.

Pass the popcorn.

While you’re doing that, observe the recent polls from this week that have the Generic House Ballot at Democrats 44% to GOP 40% for November.

And then plan how to insure that ten people you know get out an vote in November, because that is how we will win.

There is no reason for despair over November, and anyone who tells you all is lost is a fucking moron you don’t need to listen to.

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