Colin Powell used to counsel preparation, foresight, and realism. A catchphrase was “look around corners.” We are awash in foreign policy, screeching around corners – but need to watch the home front, too. Beyond creeping socialism, we have a haywire economy, COVID, but also wild inflation.
You may have heard that we hit a 40-year high last month for inflation, now clocking it at 7.5 percent annually. In other words, last year’s hard-earned dollar only buys 92.5 cents’ worth of goods now. Give it another three years, and it will buy just three-quarters of what a “Trump dollar” bought.
The biggest surprise, however, maybe what comes around unexpected corners. In general, we know government overspending and an official, deliberate end to American energy independence has triggered a general rise in inflation, likely to trigger higher interest rates and higher fuel costs.
But there is more unseen inflation than commonly understood. Take a basic product – one tied to elevated oil and gas costs, driven by Biden’s renewable energy preoccupation – and look what you get.
American farmers grow the food we eat, American truckers bring it to market, and both are suffering higher fuel costs, as well as likely higher borrowing costs from interest rates raised to battle inflation.
But this is not the primary driver of higher food costs – which we have all seen and will see more of in coming months and years. What is the prime driver? Biden’s higher energy costs affect virtually every input an American farmer uses – and thus almost every agricultural product that comes to market – and thus, your food bill.
Example: Fertilizers – the primary commercial forms that make farming efficient – are up to six times as expensive as a year ago. Why? COVID? Labor shortages? Supply chain slowdowns? Perhaps marginally, but the real cost driver is Biden’s energy policy, rocketing price pressure on fossil fuels. Many preferred fertilizers are made, in part, from fossil fuels. See, e.g., HIGH COST, SHORT SUPPLY OF FERTILIZER TO ALTER 2022 PLANTING; Fertilizer Price Index Jumps Most Since September.
Biden’s answer? Silence. If a farmer must farm less efficiently, or necessarily reliant on higher fertilizer costs, several things happen. First, fewer agricultural goods come to market. Second, less fertilizer is available. Third, the farmer must pass higher costs to consumers. Fourth, farmers – who cannot afford to buy or borrow at higher prices and rates – go out of business. See, e.g., Rising price of fertilizer is forcing NC farmers out of the business.
Other inputs are of concern. Fossil fuel-dependent herbicides and pesticides are exploding in cost, creating added pressure on American farmers, in turn affecting American consumers. See, e.g., U.S. farm income expected to fall as costs for fertilizer, other production expenses climb sharply.
All this affects you and me, common consumers – on everything from vegetable to poultry and meat costs, corn syrup and sugar to wheat, milk, and eggs. Now, add to that other elevated cost inputs. Farmers pay more for equipment, as farm vehicles become more costly – and unavailable. Labor costs climb as American labor participation falls with mass government giveaways, benefits, higher taxes.
Regulatory costs keep climbing, as government leans on farmers with restrictions Penalties tied to COVID – although declared invalid by the Supreme Court – did not initially help. See, e.g., Agriculture and Regulatory Reform; Supreme Court halts COVID-19 vaccine rule for businesses.
So, what does all this mean? Several things clearly. First, when the federal government first errs in a major policy – whether overspending, creating a dependent class, or summarily ending US energy independence – effects are predictably direct and indirect.
Near term, fresh federal money makes people feel better, but at what cost? Their earning power, value of wages, savings, and future earnings fall. Inflation rises, interests follow, standards of living decline.
Talking up solar, wind, and renewables are politically comforting for some, but that policy should never have supplanted – sought to replace overnight – a major part of the US economy, our energy sector.
Our lives depend on fossil fuels, at the pump, in-home heating, even food production. Ending energy independence threw us all to foreign energy wolves. The inflation that comes now – blame for it – is at Biden’s door, and those who supported him in this folly.
Unfortunately, until we can get leaders back who respect the common consumer, basic economics, and the life and times of American farmers, we are stuck with what we have. That said, as we all “look around corners,” the scatter-effect of Biden’s bad economics and planning is already triggering a national rethink about policy – and who we want making it.
Sometimes, one issue can indicate many. In this case, what is happening to American farmers, and the basic price of food, comes from short-term, ill-advised, dependence-creating, often partisan policymaking. Americans are learning the future is long – best navigated by “looking around corners.” We will have a few of those corners in 2022, more after that. If we dare to learn, life will get better.