There is no doubt that Americans face affordability issues. Capitalizing upon them, especially in blue states, the Democratic Socialists of America (DSA) have been peddling their prescriptions for cure, which are comprehensive socialist “solutions.” These solutions require more government, more taxation, and unprecedented authoritarian force. Thus, more socialism and more autocracy are increasingly popular solutions in populous blue states. But before we consider the cure, we should first consider the disease the DSA seeks to remedy.
What are the main causes of affordability problems in America today? Looking solely at the CPI’s 21% inflation rate, with many wages increasing by about half that, this reduces the purchasing power of a month’s wages by at least 10%. But there was much more.
Much of this rise was caused by a flood of government-printed money for grandiose but unneeded socialistic programs: the 2021 American Recovery Act (unnecessary, belated COVID relief) and the Orwellian-named Inflation Reduction Act (a disguised climate bill, per former President Joe Biden) were as inflationary as they were unnecessary.
Biden’s wild spending programs, along with the bullying of the servile Federal Reserve Chairman Jerome Powell to keep interest rates low, eventually caused interest rates to explode. A starter home loan rose from 2.65% in 2021 to 7.79% in 2023, a 193% increase, while other credit costs also soared. Even as mortgage rates lowered to 6-6.5%, the increase over pre-Biden rates was 100%.
Rising homeownership costs, driven by higher mortgage rates, also mean that those with modest mortgage rates are less inclined to sell their residences. This, in turn, causes upward pressure on rental prices.
Absurd Biden fossil fuel regulations and leasing restrictions did nothing to help the environment, except raise gas pump prices by more than 100%, which Biden blamed on Russia invading Ukraine. The increased cost of fuel also raised airline fares and product shipping costs.
Increased fuel costs raised the costs of food, transportation, and housing, in some cases by more than 100%, a change that the CPI insufficiently captured.
With rampant Biden-encouraged immigration, almost all job creation occurring during Biden’s term went to either government workers or illegal immigrants. Meanwhile, the flood of new immigrants also contributed heavily to the rising cost of housing, education, social welfare programs, and medical care. The numerosity of immigrants denied less fortunate Americans entry-level jobs, while pushing them toward dependency. This issue, plus lax border enforcement, sent fentanyl deaths soaring.
Financially-strained local and state governments increased taxes on property, gas, cigarettes, liquor, and school district residents. These are all regressive taxes hitting the middle and lower classes proportionately the hardest.
All the foregoing increases in the cost of living did not affect the prosperous. Why? First, because they have pricing power, and secondly, inflation can increase the value of their assets and thus their wealth. Did lobbyists influencing Biden suffer a cut in pay? Quite the contrary. So, naturally, socialists blame wealth disparity not on silly socialistic programs, but on the wealthy who avoided their consequences.
At the same time, the rise of overall American wealth has been caused by daring, highly inventive entrepreneurs who make life easier for all. It follows that one of the only bright spots in the economy, innovation, which eventually raises all boats, will be the target of socialists blaming billionaires who have succeeded in improving lives. All socialists will do to “improve” this situation is move us from a society with already too-numerous “soft socialism” programs, then to one with more extreme programs controlled by the socialist “vanguard,” which, as history has shown, always devolves into a privileged autocracy controlling the poverty-stricken.
Winston Churchill said, “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.” We have seen this movie before, in Russia, Cuba, and Venezuela, to name just a few countries “blessed” with socialism.
THESE 120,000 PEOPLE COULD SHATTER DEMOCRATS AND TWO-PARTY SYSTEM
In the iconic comic strip Pogo, its characters tramped through the woods in a destructive foray against an unknown enemy. After a protracted guerrilla war, Pogo finally announced: “We have found the enemy, and he is us.”
If the DSA ever gains power, the citizenry may at some point identify the real enemy, but at that point, it will likely be too late.
John D. O’Connor is a former federal prosecutor and the San Francisco attorney who represented W. Mark Felt during his revelation as Deep Throat in 2005. O’Connor is the author of the books Postgate: How the Washington Post Betrayed Deep Throat, Covered Up Watergate and Began Today’s Partisan Advocacy Journalism and The Mysteries of Watergate: What Really Happened. O’Connor and Mark Felt also collaborated on the 2006 book, A G-Man’s Life.