Inflation; Many Causes, But Few Solutions
Right now, the rate if inflation in the United States is the highest in forty years. Already a host of candidates seeking the Senate seat being vacated by retiring Senator Rob Portman are campaigning heavily on “Biden’s inflation” as if his policies are the cause of the inflation in the country right now. However simple solutions to complex problems very often create another set of problems without really solving the initial problem.
Here is a history question for you. In what year did the United States have the highest rate of inflation in the pass one hundred years? I’ll give a clue; it wasn’t during the 1970s or 1980s.
That year was in 1947 when the annual rate of inflation was more than 14% for the entire year. It never got that high during the inflation of the 1970s or 1980s. In addition the years 1946 and 1948 were also years of high inflation. Now, if you remember your history, what was going on after 1945? FYI, the Second World War had ended, and an entire generation of young men were suddenly discharged from the armed forces and needed housing as well as other consumer goods.
For almost four years, the United States was engaged in fighting a major world war. There were wartime wage and price controls in place to prevent war profiteering and prevent runaway inflation. Also, during that same four year period few new consumer goods were manufactured. The auto industry converted all of its plants to the production of war material and no civilian passenger cars were made for four years.
However as soon as our industry began caching up with the demand, more autos and consumer goods were manufactured. Developers began building new housing for the returning veterans and their families. Fueled by the G. I. Bill, returning veterans of the war were able to get low or no down payment low interest mortgages for houses. That is what built Parma. My parents moved into a new development in the fast growing city of Parma in a new development called Tuxedo Heights near Pearl and Ridge in December 1949. I was a little more than a year old and my mother was pregnant with my brother. Not long after he was born a sister joined the family.
But by 1950 the rate of inflation was back to a normal stable rate that persisted until the late 1960s. But the postwar inflation was a major campaign issue in the presidential election of 1948 as Republicans were blaming it on incumbent President Harry Truman. Not many gave Truman a chance in the election of 1948. He had to deal with a revolt in his own party as southern Democrats, upset with Truman desegregating the military, ran a man on the Dixiecrat party and actually carried five states in the deep south. At the same time, a more progressive wing of the Democratic party broke with Truman on his stand against communism.
I won’t belabor anyone with a history lecture. But right now in 2022, the United States is recovering from the equivalent of a major war. The war was not against any hostile foreign power but with an unseen virus that killed far more Americans than anu war in our country’s history. For more than a year, the nation’s economy was on full or partial shutdown. Because of stimulus payments and generous unemployment benefits that allowed people to maintain their life, people all of a sudden have money to spend and they are spending it, just as if there was a full scale war.
Remember two years ago when no one was traveling and airports were empty and no one was renting cars either and not many people were buying cars as well? Now, to exacerbate this situation comes a war in Europe between Russia and Ukraine and as a result of that war, exports of Russian oil have been suspended.
Simply stated, the major cause of the current inflation is a free market economy. When the demand for goods and services exceeds the supply, prices increase. This inflation too will eventually end as soon as supply catches up with demand. Short of imposing wage and price controls, there is very little any President, regardless of their political party can do.
For politicians, it is always easier to blame others for the problems and make promises to fix those problems. But governing and actually solving the problems is much more difficult than campaigning. If the Republican party has a better idea, I would like to hear it. My answer to all those candidates running and railing about “Biden’s inflation”; let’s hear some bona fide solutions.
Lee has been working with Medicare, Medicaid and private health insurance since he began working at the Erie County Welfare Department in January 1973 where a major part of his job was determining eligibility for Medicaid. He went into the private insurance business in 1977 with Prudential Insurance Company and within a short time had become one of the company’s top sales agents. In 1982, he was promoted into management where he managed two field offices and as many as thirteen sales agents. After leaving Prudential in 1986, Lee decided to become more focused on health insurance and employee benefits. He has advised many local employers on how to have a more cost effective employee benefit program as well as conducted employee benefit meetings and enrollments for many area employers. The companies Lee has worked with ranged from small “mom and pop” businesses to local operations of large national companies. Lee received his B.S. degree from Kent State University where he has been active in the local alumni association. He has completed seven of the ten courses toward the Certified Employee Benefit Specialist designation. He has taught courses in employee benefits and insurance at Cleveland State University and local community colleges. In addition, Lee is an experienced and accomplished public speaker. He has been a member of Toastmasters International where he achieved the designation of “Able Toastmaster – Silver” in 1994. He has also served as a club president, Area Governor and District Public Relations Officer in Toastmasters as well as winning local speech contests. Lee has also been a member of the Greater Cleveland Growth Association’s Speaker’s Bureau where he was designated as one of the “official spokespeople for the Rock and Roll Hall of Fame” prior to the hall’s opening in 1995. He has given talks and presentations before many audiences including civic organizations, AARP chapters and many other community groups. With the implementation of the Medicare Modernization Act (Medicare drug bill) in 2006, Lee has shifted his focus to Medicare and helping Medicare beneficiaries navigate the often confusing array of choices and plans available. As an independent representative, Lee is not bound to any one specific company or plan, but he can offer a plan that suits an individual person’s needs and budget. In addition, Lee is well versed in the requirements and availability of various programs for assistance with Medicare part D as well as Medicaid. While he cannot make one eligible, he can assist in the process and steer one to where they may be able to receive assistance.