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You’re being misled when talking heads – particularly from the Biden Administration – claim that this alarming spike in inflation is temporary. They’re correct in some respects, but intentionally deceiving us on others. Let’s dig into this a little…

Where are they correct?

Yes, there are some prices that are almost certainly “transitory.” The average cost of rental cars, for example, is up dramatically right now. In large part, this is a supply & demand issue, as rental car companies sold off large swaths of their fleets during the pandemic and now are trying to accommodate the current surge in people ready to travel. Compounding the problem is a spike in new car prices, which leads us to our next example.

Car prices are up for a variety of reasons, not the least of which is a supply chain shortage of semi-conductors, a rise in raw material costs, and a high demand for vehicles right now. But eventually, this too should settle down. (At least a little.)

So where are they misleading us?

The costs for most businesses to operate are up noticeably since Biden took office. As a general statement, they’re paying more for employees, some utilities & energy, raw materials, and equipment. These cost increases are passed along to you and me – the consumers. That’s why we’re paying more for just about everything these days.

To the extent a handful of these costs pressures eventually ease on businesses, it’s not going to be enough for many to significantly lower their prices. Not even close, and certainly not with Democrats in Washington aiming for higher corporate taxes and increased regulations. This is just one of the reasons why the higher prices you see for many goods and services are likely to be around much, much longer. (Even liberal outlets like the New York Times have started to recognize this.)

Oh and don’t forget, if Democrats are successful in their efforts to spend an additional $3.5 trillion – above & beyond what it normally costs to operate the government – that’ll be like adding gasoline to their inflationary fire.