Last week, UK Prime Minister Boris Johnson barely escaped a no-confidence vote within the House of Commons MP’s of his own Conservative Party. PM Johnson’s struggles might be tied to the “partygate” scandal (opposition Labour has its own “beergate” scandal to deal with)but Johnson’s standing is undermined by the high-inflationary spiral the UK finds itself in, a spiral which at the moment is worse than in the USA.
Johnson’s predicament as well as the reduced margin of Emmanuel Marcon Presidential reelection (and his center struggles in this week’s parliamentary elections where the far left and far right have gained) and many other indicators remind us inflation is global. But so much of the communications from people associated with the Democratic Party views inflation and the US economy in a vacuum, just like the January 6 hearings last week didn’t discuss Trumpism as part of a larger, dangerous global drift toward illiberal fascism and projected a view that somehow the insurrection was an unprecedented event that had roots in this country alone. We know that is absolutely not the case.
So let’s look at inflation.
- Inflation is elevated around the world, particularly in light of Putin’s invasion into Ukraine, which has driven global food and energy prices higher. Inflation is at its highest level on record in the Euro Area and in Germany, the highest level in 40 years in the U.K., and the highest level in more than 30 years in Canada. Consumer prices have risen by 8.2% in the United States in the last year, 8.1% in the Euro Area, and 9% in the United Kingdom.
- Russian Dictator Vladimir Putin’s aggression in Ukraine have driven inflation higher in recent months, with gas prices up $1.51 since Putin began amassing troops on the border of Ukraine. It is of course not plausible that disruptions in global energy and food markets are the result of the American Rescue Plan as alleged by many GOPers. In fact, a recent heat wave in South Asia has led India, who would have offset a lot of grain and wheat lost to global market due to Putin’s invasion of Ukraine, to hoard supplies for its own populations. This is DIRECTLY related to Climate Change.
- Even before disruptions to global energy and food markets have driven inflation higher, many other factors boosted demand, shifted its composition, and constrained supply, which led to higher prices. The pandemic meant that American consumers shifted their consumption from services to durable goods. Businesses were unprepared for demand returning quickly, and we saw an inward shift in supply capacity – from auto production to domestic energy production to rental cars. And supply chain pressures meant bottlenecks and thinner inventories that also drove up prices.