“I almost had a heart attack,”
… lamented an Illinois house cleaner. When she saw the price of a box of cereal at $8.99 for a box of breakfast food, she wondered if the price didn’t include a gallon of milk? Alas, no: Only the cereal, which many of us would argue should be banned due to excess sugar and no nutritional value.
William A. Galston in the WSJ acknowledges that the Illinois house cleaner is probably “speaking for a lot of Americans,” before he admits that she is speaking for him, also.
“I know she’s speaking for me,” he writes.
My sense of what things should cost at the grocery store is anchored at pre-pandemic levels, and I find it hard to accept that so many items have risen in price by 30% or more. My wife and I can afford the higher prices, though we sometimes choose not to pay them and do without items we regard as outrageously expensive. What about families with children who are trying to get by on $75,000 a year? (Getting by?)
Food Only Part of the Picture
Writes Mr. Galston:
The average buyer of a new car in America paid $48,334 in July 2023, up from about $37,000 in 2019. To be sure, the bulk of the increase occurred in 2020 and 2021. Still, new car prices today are 31% higher than they were four years ago. The pace of price increases has slowed, but prices haven’t come down—even though pandemic-related supply-chain problems have abated.
Mr. Galston’s family is among the fortunate; his family can afford the high prices.
… a midrange car for 30% more than it would have cost four years ago, but what about middle-class families who can’t find entry-level cars and must finance purchases of more expensive cars at much higher interest rates?
Then There’s Housing
Another example: housing. Over the past four years, the median price of an existing home rose by 45%, from $271,500 to $394,300. But home builders haven’t been rushing to provide new options for first-time home buyers; the median price of a newly built home rose by 36%, from $315,700 in the fall of 2019 to $430,300 today. Young families trying to buy their first homes have nowhere to turn.
I believe that President Biden’s foreign policy advances the long-term national security interests of the U.S., and retreating from the world into a short-term, inward-looking, transactional approach would be a disaster, for our friends and allies around the world and for us. (Dick and I disagree with Biden’s foreign policy.)
Will President Joe Biden Address High Prices
But Mr. Biden’s ability to conduct his foreign policy rests on domestic support for his administration, which is eroding under pressure from concerns about his handling of other issues, especially the cost of living. The problem exemplified by the cost of a box of cereal could end his presidency unless he addresses high prices head-on.
“What do people think,” asks RCY, “when the Fed is printing money in its basement?”