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Inflation and Stagnation: A Political Opportunity?

3:20 PM, Aug 28, 2014 • By MICHAEL WARREN
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At the Washington Post, Christopher Ingraham demonstrates through one chart "why it feels like the recession never ended." Here's the chart, with part of Ingraham's explanation below:

From the start of the recession in 2007 to today, the average price of the things you buy - clothes, food, housing - has risen by 15 percent. This, in itself, isn't a problem at all. The problem is that wages haven't kept pace with that increase. In fact, for all but the top wage earners, real (inflation-adjusted) earnings are actually down over the same period.

Let's put it another way. Say that you're a median wage earner, right in the 50th percentile. And let's say that in 2007 you could buy a week's worth of groceries for $100. Fast forward to today: those exact same groceries cost $115, but you only have $112 dollars in your pocket.

Read all of Ingraham's post here, in which he also points out that pessimism about the permanence of the Great Recession is up. 

Not many candidates for office, Republican or Democrat, have made an argument about how to solve the problem of price inflation and stagnant wages. This, despite the political opportunity demonstrated by a recent poll that found 75 percent of Americans are concerned about inflation. But at least one candidate for Senate, Republican Jeff Bell of New Jersey, senses an opening. 

“No one in Washington wants to talk about the cause of this problem -- least of all my opponent, Cory Booker," said Bell in a statement responding to the Post article. "I am running for U.S. Senate because I know the cause of this problem and I have the solution. The reason why goods are more expensive but wages are being crushed is because of the Federal Reserve’s zero interest rate policy. My solution is to restore the value of the dollar by tying the dollar to gold. This will reign in the Fed and curb inflation, while bringing jobs and growth back to the economy."

As Andrew Ferguson writes in the current issue of THE WEEKLY STANDARD, Bell has so far focused his entire campaign against Booker on the Democrat's implicit support for the Federal Reserve's monetary policy. And on Wednesday, the Bell campaign released its first ad, a 30-second radio spot, touting his plan to return to the gold standard. You can listen to the ad here, which is running on two New York radio stations.

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