Almost every poll across the country indicates that the number one issue on Americans’ minds is the economy. Break it down even more and the answer is most often inflation.

Inflation has leveled off at about 3%, but that means prices are 3% higher than this time last year.

Heather Long,Washington Post Editorial Board member, columnist, former U.S. economics correspondent and Deputy Editor at the Patriot-News in Harrisburg writes that consumers don’t seem to think that way. Long wrote in a recent column that Americans tend to look back to before the COVID pandemic in early 2020, when prices on average were 20% lower than they are now.

Appearing on The Spark Wednesday, Long explained the mindset of many consumers,"It's really pretty simple. And that is that even though journalists are saying inflation has cooled, people think about inflation cumulatively. You remember what you paid for meat or for a house or for auto insurance three or four years ago. And you can see that the prices not only are they not coming down, but they're up massively. And in particular that overall, on average, prices are up 20%, since four years ago. Now the White House likes to say, hey, don't worry, don't worry. Your wages are up over 21%. So, you should still feel like you're better off. But the problem is, this is all averages. It's different for every family. And if you look at the basic necessities -- groceries, rent, gas, electricity --  you have to pay your electric bill every month. All of those items are up more than 20%. So those are the ones that are really crushing and that people are seeing week after week, month after month are all up more than 20% in the past four years."

According to Long's research, gas prices have increased 35%, groceries 21%, and electricity 28% since the beginning of 2020. Auto insurance is up a whopping 44%. In what may come as a surprise to many, health insurance premiums have actually gone down 21%, even though Long points out the formulas for determining those prices are convoluted.

Long said that the supply chain disruption for many products during and right after the COVID pandemic helped to fuel higher prices,"We couldn't produce enough for a long time."

She added there were other factors,"We also didn't have enough workers. In the United States, we laid off almost 20 million people. And so there weren't enough people in some cases to make things or to transport, things or cut through trains or trucks or whatnot to get them to the right spots. And so all of these different glitches, couldn't be solved. It took a lot longer to solve, many of these supply chain shocks, than I think anyone anticipated. And so, that turned out to be a major driver. Now, there will be an internal debate for years to come about the role that the stimulus packages played. Obviously, the United States opted to do historically large levels of aid during the pandemic. The federal government spending, the first two packages were bipartisan. The third package was passed by Democrats only and signed by President Biden in March of 2021, shortly after he took office. It's clear that that certainly helped drive some demand and probably put things over the top."

Some voters blame President Biden for inflation. Long was asked if Biden's policies contributed to higher prices,"If I had to put a number on it. And again, this will be debated for years to come. Inflation was probably 70% driven by supply, which really wasn't the Biden administration's fault. And, 30% probably driven by stimulus and government spending. You can debate what those exact percentages are. So, I'd say a little bit of blame. Probably not as much blame as he's getting. I think the hard part for President Biden is they kept saying in summer 2021, and then in 2022, it was going to be temporary, that this was a short term shock."

That also seems to be what many remember.

Almost every poll across the country indicates that the number one issue on Americans’ minds is the economy. Break it down even more and the answer is most often inflation.
Inflation has leveled off at about 3%, but that means prices are 3% higher than this time last year.
<a href="https://www.washingtonpost.com/people/heather-long/">Heather Long,</a> Washington Post Editorial Board member, columnist, former U.S. economics correspondent and Deputy Editor at the Patriot-News in Harrisburg writes that consumers don’t seem to think that way. <a href="https://www.washingtonpost.com/opinions/2024/02/28/inflation-since-pandemic-still-high/">Long wrote in a recent column</a> that Americans tend to look back to before the COVID pandemic in early 2020, when prices on average were 20% lower than they are now.
Appearing on The Spark Wednesday, Long explained the mindset of many consumers,"It's really pretty simple. And that is that even though journalists are saying inflation has cooled, people think about inflation cumulatively. You remember what you paid for meat or for a house or for auto insurance three or four years ago. And you can see that the prices not only are they not coming down, but they're up massively. And in particular that overall, on average, prices are up 20%, since four years ago. Now the White House likes to say, hey, don't worry, don't worry. Your wages are up over 21%. So, you should still feel like you're better off. But the problem is, this is all averages. It's different for every family. And if you look at the basic necessities -- groceries, rent, gas, electricity --  you have to pay your electric bill every month. All of those items are up more than 20%. So those are the ones that are really crushing and that people are seeing week after week, month after month are all up more than 20% in the past four years."
According to Long's research, gas prices have increased 35%, groceries 21%, and electricity 28% since the beginning of 2020. Auto insurance is up a whopping 44%. In what may come as a surprise to many, health insurance premiums have actually gone down 21%, even though Long points out the formulas for determining those prices are convoluted.
Long said that the supply chain disruption for many products during and right after the COVID pandemic helped to fuel higher prices,"We couldn't produce enough for a long time."
She added there were other factors,"We also didn't have enough workers. In the United States, we laid off almost 20 million people. And so there weren't enough people in some cases to make things or to transport, things or cut through trains or trucks or whatnot to get them to the right spots. And so all of these different glitches, couldn't be solved. It took a lot longer to solve, many of these supply chain shocks, than I think anyone anticipated. And so, that turned out to be a major driver. Now, there will be an internal debate for years to come about the role that the stimulus packages played. Obviously, the United States opted to do historically large levels of aid during the pandemic. The federal government spending, the first two packages were bipartisan. The third package was passed by Democrats only and signed by President Biden in March of 2021, shortly after he took office. It's clear that that certainly helped drive some demand and probably put things over the top."
Some voters blame President Biden for inflation. Long was asked if Biden's policies contributed to higher prices,"If I had to put a number on it. And again, this will be debated for years to come. Inflation was probably 70% driven by supply, which really wasn't the Biden administration's fault. And, 30% probably driven by stimulus and government spending. You can debate what those exact percentages are. So, I'd say a little bit of blame. Probably not as much blame as he's getting. I think the hard part for President Biden is they kept saying in summer 2021, and then in 2022, it was going to be temporary, that this was a short term shock."
That also seems to be what many remember.

When people come together and talk about really interesting topics, great questions spark better understanding and opportunities for new ideas to form. On The Spark from WITF, hosts Scott LaMar and Aniya Faulcon start the conversations about what’s happening in the world and at home. Share your ideas at https://witf.org/programs/the-spark.

When people come together and talk about really interesting topics, great questions spark better understanding and opportunities for new ideas to form. On The Spark from <a href="https://www.witf.org">WITF</a>, hosts Scott LaMar and Aniya Faulcon start the conversations about what’s happening in the world and at home. Share your ideas at <a href="https://witf.org/programs/the-spark">https://witf.org/programs/the-spark</a>.

The Spark

When people come together and talk about really interesting topics, great questions spark better understanding and opportunities for new ideas to form. On The Spark from WITF, hosts Scott LaMar and Aniya Faulcon start the conversations about what’s happening in the world and at home. Share your ideas at <a href="https://witf.org/programs/the-spark">https://witf.org/programs/the-spark</a>.

Advertisement