If It Was 1968 – I could get a New Car for $2400….

 

Odd statement for a psychiatric blog?  I decided to address my favorite economic fallacy of election season and that is the effect of the President.  It came up as recently as four days ago in the Presidential debate.  During that debate – Trump claimed that he created the “greatest economy” and made the following statement:

“When I had it, I had tariffs and yet I had no inflation. Look, we've had a terrible economy because inflation has --which is really known as a country buster. It breaks up countries. We have inflation like very few people have ever seen before. Probably the worst in our nation's history. We were at 21%. But that's being generous because many things are 50, 60, 70, and 80% higher than they were just a few years ago.”

It was not clear to me if his statement abut 21% was supposed to be under his administration or Biden-Harris, especially when he makes the claim that “I had no inflation.”  That brings me to economic fallacy #1 in the Presidential race:

1:  Inflation is a fact of life in the American economy and there has never been a recent President with “no inflation”:

You don’t have to believe me. The evidence is abundant staring with retirement savings.  All the retirement advice you get gives you strategies on how to keep pace with inflation over the next 30 years.  There will be additional advice on how to keep up with inflation during your retirement years.  There is no advice that you can forget about inflation because it does not exist at times.  The title of this post refers to an ad for the Ford Mustang in 1964 that ran constantly on television with the title “$2368 F.O.B Detroit.”  The starting price for a Ford Mustang today is $30,920. 

You don’t have to rely on those kinds of memories.  There is actual economic data tabulated.  The only problem is that it is not typically tabulated by Presidential term.  You must add that yourself.  I used the Bureau of Labor Statistics purchasing power calculator that uses a broad index of consumer goods to look at the last 7 administrations:

President	Years	Inflation
Biden	2021-2024	20%
Trump	2017-2021	12%
Obama	2009-2017	15%
Bush	2001-2009	22%
Clinton	1993-2001	24%
Bush	1989-1993	12%
Reagan	1981-1989	42%

 Inspecting those numbers – most people can come up with explanations for the variability.  Explanations of policies under any President responsible for the numbers is doubtful.  Reagan and his “trickle down” economic policies were a mainstay of Republican rhetoric for decades and he has the worst inflation rate.  The most likely difference between the Trump and the Biden figures was decreased demand and unemployment under Trump creating less demand and pricing pressure and then increased employment, financial incentives, and pent-up demand as the pandemic improved under Biden.

The rhetoric of the economy often leads people to come up with lists of commonly purchased items and how those prices have been affected.  First off – price inflation is expected irrespective of who is in the White House, but encourage anyone to not take these lists at face value and do an easy recheck.  Here is one I did not too long ago after somebody posted their list of inflated items on Facebook.

Note that the GOP version in the first two columns does not match the prices I got off a Walmart web site on May 7, 2024.  The GOP version shows uniform increases in all prices between 2020 and 2024 and that is not the case.  Half of the items are less than they were in 2020 (see sparklines in last column).  Anyone can do this exercise when they see these postings about price increases of common items over time.

Do these lists really prove anything in terms of the candidates?  Not really because once again inflation is expected.  The political rhetoric is such that the GOP is portraying the current inflation as catastrophic.  Certainly, the higher end of the range that Trump describes has not happened.  A much more reliable index of inflation is available from the Federal Reserve.

The only relatively flat spot on that curve was at the peak of the COVID pandemic with decreased demand for goods and services. As demand increased the CPI increases and the Biden administration took over at that point.  The commonly quoted inflation numbers are consumer prices defined as: “Inflation as measured by the consumer price index reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly. The Laspeyres formula is generally used “

2:  The most direct and sustained effects on inflation are initiated by the non-partisan Federal Reserve Bank:

The Federal Reserve Bank has been independent of political influence since 1951.   Between 1935 and 1951  “monetary policy would basically be dictated by Congress and the White House…”.  Even after that period, the Fed has come under pressure from the executive branch.  The Fed actions are a potent driver of the economy and check on inflation as evidenced by the following graphic on interest rate adjustments.  These interest rate adjustments are done based on macroeconomic rather than political considerations and many administrations have disagreed with them because they did not seem politically expedient.  Note the differences in interest rates over the past 2 administrations.  It is also generally agreed that the US economy has recovered post pandemic better than other high-income countries. Should an administration take credit for that or the Fed?

3:  Academic comparisons of the impact of Presidents on the economy show little effect.

The best-known study of the issue was done by Blinder and Watson (3).  They conclude that by all measures the economy does much better under Democrats in Congress and the White House.  It is not even close.  But they did not leave it there and went on to see if there was any clear explanation for this phenomenon at the policy level or based on the make-up of administrations and there was not.  They take it a step further and look at whether the economy was just poised for rapid growth at the time Democrats were elected and that was also not an explanation.  They consider various luck factors that are shocks to consumer expectations and find that makes up part of the difference.  In the end they find no complete explanations but suggest more favorable international conditions and consumer optimism may have something to do with it.  In short, the economy does better under Democrats but there is no clear explanation why that is.  Why then is is a top priority for the election?

Conclusion:

If you are really basing your vote for the President on the economy – find a different issue.  There is very little to no evidence that the President has much of an effect.  If you do your own research - there is a ton of information on this that is as accessible as doing a simple Google search on: “Does the President have any effect on the economy?”   There are papers, podcasts, blogs, interviews, radio programs, and more academic papers that say the same thing – probably not much if any of an effect. When I hear that polls suggest that most Americans think one party or another can manage the economy better – what is that based on?  A candidate saying that during his term he had the “best economy ever.”?  There is absolutely no evidence for a statement like that.

So “its not the economy stupid.”  Move on to another issue.  If you vote based on that issue – you are voting on unsubstantiated rhetoric,

 

George Dawson, MD, DFAPA

 

References:

1:  Overview: The History of the Federal Reserve.  September 13,2021:  https://www.federalreservehistory.org/essays/federal-reserve-history

2:  de Soyres, Francois, Joaquin Garcia-Cabo Herrero, Nils Goernemann, Sharon Jeon, Grace Lofstrom, and Dylan Moore (2024). "Why is the US GDP recovering faster than other advanced economies?," FEDS Notes. Washington: Board of Governors of the Federal Reserve System, May 17, 2024, https://doi.org/10.17016/2380-7172.3495

3:  Blinder AS, Watson AW.  Presidents and the US Economy: An econometric exploration.  National Bureau of Economic Research. Working Paper 20324, July 2014.  http://www.nber.org/papers/w20324

 

We Live in Different Realities….

 

 

“We don’t have to like the reality that we live in, but it is the reality we live in.”  JD Vance comment on Apalachee High School shooting in Georgia that left 4 dead and 9 injured.

 

The school year began with a school shooting and all the associated irrationality of mass shooting in the US.  One of the most irrational comments is posted above and was made by the MAGA party vice presidential candidate.  When I say irrational – I mean that what Vance refers to as “the reality we live in” was in fact created by his party, its judges, gun extremists (who are undoubtedly all from his party), and the gun lobby in Congress.  They have created a parallel universe where there are minimal to no gun regulations, people can openly carry weapons, people are encouraged to use firearms, the country is saturated with guns, and the expectation that there will be no problems.  If there are problems it is always due to somebody else – as further elaborated by Vance:

“I don’t like that this is a fact of life.  But if you’re—if you are a psycho, you want to make headlines, you realize that our schools are soft targets. And we have got to bolster security at our schools… We’ve got to bolster security so if a psycho wants to walk through the front door and kill a bunch of children, they’re not able to.”

As far as I can tell nobody has confronted his statement about bolstering security in schools.  We just witnessed former President Trump’s near miss as he was protected by a full contingent of secret Service Agents and snipers. Even that impractical level of protection at every school in the country is no assurance that children will be safe.  In the case of this incident, an armed security officer at the school engaged the shooter in about 120 seconds and forced him to surrender. By that time, he had already shot 7 people.  His other theory is that the increasing numbers of mass shootings are due to increasing numbers of "psychos".  That term really has no meaning other than a pejorative one.  If he is referring to mental illnesses there is no evidence that mental illnesses are causal in mass shootings.  He leaves out the most likely causes of gun extremism and a mass shooter culture as well as easy availability of guns.

The other argument that seems to be gaining traction is blame the parents. As I predicted this is being sold as a solution to the problem rather than going directly at the culture of gun extremism. I heard several television commentators saying this was a “wake up call” to parents who allow their children to have access to guns.  I really doubt that it is.  The analysis will always be complicated by how the parents are portrayed in the media, but even without the parents in the picture we still have very easy gun access and a cultural basis for mass shootings that nobody ever addresses.  Having been a kid, I can’t think of a teenager who could not defeat their parents access prevention security measures – whether it was reading material, phone access, or weapons.

Many of the same commentators are also blaming smartphones. The context seems to be that parents are not able to deny their children access to smartphones anymore than they can deny their access to guns.  They cite as an example recent legislation that bans smartphones in schools.  Apparently it is much easier for politicians to limit smartphone access than it is to limit gun access.  Smartphones are not nearly as dangerous.

The blame the parent argument may have some application, especially in states where the gun laws specify that parents are responsible for their child’s use of a firearm. In many cases those laws are currently complicated by the fact that a child may possess a gun in certain circumstances – even if they are not eligible to purchase one. The smartphone argument is a weak one.  Banning smartphones in educational venues and where specific decorum is required – but smartphones clearly have nothing to do with mass shooting.  Not being able to say “No” to your kid doesn’t either. Gun extremists and the mass shooter culture has everything to do with it and it requires serious action.  It is time to get back to reality and acknowledge what we already know from American history.   Gun regulations save lives and lots of them.

I will cite what is known by most people in my generation and a frequent reference to the Old West that I have used before.  In the 1960s, 1970s and the years before – there was no mass shooting problem in the US and certainly no problem with children being shot in schools. Many middle school students took the National Rifle association Hunter Safety course.  In that course safe use of firearms was emphasized including treating every gun like it is loaded and never pointing a gun at anyone.  The middle schoolers in these courses were about the same age as the most recent shooter.  They had no access to high-capacity semiautomatic weapons or handguns.  The basic idea was – learn how to safely handle guns and use them for hunting and target shooting. There was no discussion of needing them for personal protection or needing to always carry them. There were no politicians promoting gun extremism.

There is evidence that the period of gun safety extended back to when frontier towns noticed that armed citizens were problematic and law enforcement started to insist on voluntary disarmament when people rode into town.  I have posted the Tombstone Arizona statute from 1881. There is also an article in the Smithsonian (1) that outlines some of the highlights of early gun control law including the association of the Gunfight at the OK Corral with Tombstone’s gun law.  Strict gun control laws existed in several other towns and the 1881 law in Tombstone is much stricter than the laws that exist today.  Today you can carry a gun without a license or permit in Tombstone. There was a contrast between frontier towns that had disarm laws and those that did not – with the latter having a higher gun homicide rate.  

A political gun extremist movement has endangered the lives of every American and made schools an unsafe place. We are well past the time to get rid of these extremists and their gun violence rhetoric.  The reality that most Americans want to get back to is to be able to walk down the street or go to school and not have to worry about getting shot.  That knowledge goes back to the Old West and it kept us in that reality right up until the 1970s.  The only strong message that needs to be sent here is that gun extremist politicians and excuse makers need to be voted out.  Even then there will be a lag time because of the gun extremist judges they have appointed.

Apart from gun extremism as a bizarre populist issue on its own – it also reinforces autocratic ideology.  The autocrat playbook reinforces political violence as a good idea.  That includes all the autocrats of the 20^th and 21^st century who typically target the “elites” in their population and encourage political violence against them.  The practical way it plays out today is self appointed militias showing up to intimidate elected officials,  self appointed law enforcement showing up to intimidate protestors, and verbal threats that the more heavily armed will prevail in any controversial elections.  

Never doubt that there is a gun extremist agenda in the United States.  I have pointed out the features in many posts on this blog. The gun extremist agenda is currently indistinguishable from the MAGA agenda.  It is more than a little ironic that the mass shooters it creates are labelled “monsters” and “psychos” by members of this political movement.  That is the reality that JD Vance is talking about and it will continue as long as these authoritarian politicians are elected and maintain that reality.    

 

George Dawson, MD, DFAPA

References:

 1:  Jancer M.  Gun control is as old as the Old West.  The Smithsonian Magazine.  https://www.smithsonianmag.com/history/gun-control-old-west-180968013/

 

 Graphics Credit:  Click directly on the photo - it is linked to Wikimedia Commons and all of the information about this phot and the CC license.