At Bloomberg, Mike Dorning explains why “Democrats’ Muscle-Flexing on Inflation Meets Reality and There’s No Easy Fix“: “Democrats have been searching for tools to ease inflation as price increases continued and worsened, with a January inflation report showing consumer prices rose 7.5% from a year earlier, the steepest climb in almost four decades….A Quinnipiac University poll released Wednesday shows inflation as the most urgent issue for 36% of Republicans, 32% of independents and 13% of Democrats….Congressional Democrats’ strategy to address rising costs through a gas-tax holiday and other legislation are shaping up as more of a political crutch than an inflation cure ahead of the midterm elections….Several of the Senate’s most vulnerable Democrats are spearheading a proposal to suspend the federal 18-cents-a-gallon gasoline tax until next year and others are drafting a bill to lower insulin prices….Though the federal government could act quickly to lower gasoline taxes, the savings at the pump would likely be disappointing, said Gilbert Metcalf, a Tufts University economics professor who specializes in energy tax policy. What’s more, suspending the federal gas tax would siphon off a source of funding from badly needed highway construction and maintenance that Congress only months ago sought to address with a historic bipartisan infrastructure bill….Several studies have shown savings from a gasoline tax reduction, especially a temporary one, are usually split between consumers and sellers. When Illinois and Indiana suspended a 5% gasoline tax in 2000, retail prices only dropped 3%, according to an analysis by MIT economist Joseph Doyle and Krislert Samphantharak of the University of California San Diego….The Federal Reserve holds the most powerful tool to bring down inflation, by raising interest rates, as the central bank is expected to do when it meets in mid-March. And rate increases typically take six to 18 months to deliver their full effect on the economy….Democrats are also considering pulling out popular pieces of President Joe Biden’s stalled economic agenda addressing prescription drug and child care costs..” In November, Biden released 50 million barrels of oil from the nation’s Strategic Petroleum Reserve. There are still over 500 million barrels left in the S.P.R. If Biden plans another release, it should be perfectly-timed.
For now, however, the Biden Administration is focused on executive action to help unclog bottlenecks in supply chains to ease inflation. Congressional action on inflation is mostly a non-starter because of Republican roadblocks. The Republican midterm strategy is anchored in the assumption that voters will blame the party in the White House for inflation, regardless of what the other party does or does not do. Pundits, and to some extent history, say they are likely correct in that assumption. Unclogging bottlenecks may not help in time to make much of an impression in the midterm elections, but Biden has to try. There is also increasing talk of “strategic price controls” to quell inflation, and President Biden seems open to using the tool for prescription drugs. You may have seen ads attesting to how much the pharmaceutical industry, and really industry in general, hates that idea. It’s hard to assess how much it would help Democrats in the midterm elections, but it’s certainly a good idea that would help Americans who are struggling with prescription drug price-gouging. Inflation in gas and meat prices the two expenses that likely have the most immediate political consequences, since consumers confront them on a regular basis. Biden is expected to take more executive action to alleviate bottlenecks leading to rising meat and gas prices, along with jawboning about excess profits paired with price gouging. Unfortunately, big media is distracted by culture war side-shows, which makes it hard to get voters to see how much the Biden Administration is doing to stem inflation, while Republicans do nothing. regarding the application of price controls more broadly, Economist Isabella Weber has written, “Today, there is once more a choice between tolerating the ongoing explosion of profits that drives up prices or tailored controls on carefully selected prices. Price controls would buy time to deal with bottlenecks that will continue as long as the pandemic prevails. Strategic price controls could also contribute to the monetary stability needed to mobilize public investments towards economic resilience, climate change mitigation and carbon-neutrality. The cost of waiting for inflation to go away is high. Senator Manchin’s withdrawal from the Build Back Better Act demonstrates the threat of a shrinking policy space at a time when large scale government action is in order. Austerity would be even worse: it risks manufacturing stagflation.”
Michael Sokolove’s New Republic article, “The Losing Democrats Who Gobbled Up Money” is generating buzz in Democratic campaign circles. Sokolove provides some instructive examples of bad campaign finance management, which merit consideration as cautionary tales. You can read his article for the dish about specific Democratic candidates, and I’ll just share a couple of his general observations: “Even in the digital age, local broadcast TV still accounts for the biggest share of campaign advertising, as high as 60 percent. It’s the most expensive use of funds, and, after a certain point, the least effective. But campaigns fat with cash have only so many ways to spend it. Especially in the final stretch, all they can do is throw it at more TV….David Hopkins is an associate professor of political science at Boston College who has written extensively about the American electoral system. “What we know from the academic study of campaign finances is that money is subject to a threshold effect,” he said. The threshold, he explained, is the point at which the money allows a candidate to run a “visible” campaign that establishes close to 100 percent name recognition, broadcasts a message, answers the other side’s attack ads, and deploys an effective field operation….“Once you are past that point,” Hopkins explained, “the marginal return on additional dollars becomes very small. It may be helpful for a voter to see an ad three times rather than once. Or even 10 times. Once you are seeing it 25 times instead of 20, it probably won’t make a difference.”….Late money—meaning dollars that gush in during the final weeks of a campaign—is particularly hard to make good use of, because it usually just buys more ads after all but a tiny number of voters have tuned out.” Absent a crystal ball, it’s not clear what can be done to prevent placing big, wasteful bets on doomed candidates, but maybe, by some kind of party-wide agreement, a small percentage of all large campaign contributions could be set aside for underfunded Democratic Senate and House candidates.
Jon Steinman of Project Democracy shares some insights at Talking Points memo regarding “The RNC’s Complicity In Trump’s Attacks On Democracy,” which merit repeating by Democratic midterm campaigns: “Acknowledging the truth of what actually led up to and occurred on Jan. 6, 2021, after all, might expose the RNC to genuine civil penalties….Indictments from the U.S. Department of Justice and evidence from the House Select Committee investigating Jan. 6 are painting a fuller picture of the attempted heist of our democracy….Whether the RNC will be named in any future civil suits is an open question. Less of an open question is the notion that the party’s behavior demands some kind of accountability — from its voters, donors, and electeds who still believe in democracy. The RNC was instrumental in helping some of the worst promoters of the Big Lie flood the zone with falsehoods, distract voters from reality, and secure a nation’s angry attention. Our democracy is built on the rule of law, and one can’t simultaneously demand “law and order” while seeking to overturn the will of the voters….As with a bank, there is money in the Big Lie and, like any self-respecting get-away driver, the RNC got a cut of the take. Let us not forget that vast sums were raised by amplifying and recirculating the claims of election fraud. Tucked within the attack on our democracy was a cynical money-making machine, as misled supporters continue donating to fund this destructive lost cause. By driving anger in their base against our democracy and the valid winner of the presidential election, Big Lie flamethrowers like Powell raised millions of donor dollars for themselves as well as Trump and the RNC, as the RNC received 25% of the post-election WinRed donations to Trump….The RNC helped create this monster, raised money off of it, and shares responsibility for the damage done. The question is whether the party will face any true accountability for its actions.”