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The Loudest Opponents of “Inflation” Are Some of Its Biggest Aiders and Abettors

Prescription drugs, hospital visits, housing, higher education, and more have all become frighteningly more expensive, far outpacing Americans’ wages. But those kinds of price increases are ignored by the politicians who are now stridently decrying inflation.

When adjusted for today’s dollars, average home values soared by 118 percent between 1965 and 2021, while incomes only went up 15 percent. (Marcus Lenk / Unsplash)

Inflation talk is everywhere these days, viewed by the professional right as the linchpin of a political comeback in 2022. Right-wing politicians have used Thanksgiving to highlight the bite of cost rises. Tucker Carlson is on Fox News every day using the rise in gas prices and other goods to posture as a champion of the working man. And Republican National Committee chairwoman Ronna McDaniel has attacked Joe Biden for neglecting the “record-setting costs for everyday goods” Americans are facing, urging him to cut spending and leave in place Donald Trump’s massive tax cuts for the rich and corporations.

Biden and the Democrats, meanwhile, until recently have either ignored the issue entirely or issued boilerplate remarks of regret and sympathy.

It’s hard to find a better example of how the narrow, tedious partisan “debate” of Washington serves mostly to cloud the real causes of the country’s ills, as well as their perpetrators. Because inflation is a very real problem for ordinary Americans — and it was long before Republicans started freaking out about Biden’s presidency. But the worst of it has nothing to do with turkey legs and milk.

Take the prescription drugs that nearly half of Americans use at least one of. Between 2007 and 2018, the prices of 602 brand-name drugs went up three and a half times the general rate of inflation, and the forty-nine most popular of those alone saw their price shoot up by a median of 76 percent from 2012 to 2017. This is, unfortunately, not slowing down. The Kaiser Family Foundation found that over 2018 and 2019, the hundreds of drugs covered by Medicare Part D continued to see their prices jump at three and a half the rate of inflation, while the AARP similarly found that the retail price of the 260 most widely used brand-name drugs had jumped at more than twice the rate — and that was over 2019–20, the pandemic era.

A dollar or two or even a few dozen cents more for gas and consumer goods is nothing to scoff at and will eat away a good chunk of an ordinary person’s paycheck over time. But this is nothing compared to the extortionate prices Americans, and only Americans, are charged for life-preserving medication. According to the AARP, if those brand-name drug prices had gone up in line with inflation from 2006 to 2020, Americans would be paying on average nearly $3,700 less for drugs they used on a chronic basis — or more than $17,000 less total, if we’re talking about the average elderly person who’s on a regimen of more than four drugs a month. And while health insurance and Medicare might mean that many are shielded from the full brunt of these costs, they’ll still be feeling the sting in the form of higher premiums and other charges that pass these price increases on to them.

The solution here would be to, at minimum, allow Medicare to use its buying power to negotiate for lower drug prices, if not outright put production and sale of pharmaceuticals into public ownership entirely. But as we’ve seen in Congress, where the provision allowing Medicare to negotiate lower prices was recently stripped from the legislative agenda thanks to vehement opposition from both parties, few in Washington have the appetite to talk about that aspect of inflation.

Or look at health care more generally, for which the average person in the United States spends nearly twice as much as someone living in countries like Canada, France, and the UK. Since at least 1980, US health care spending per person has consistently grown at a faster rate than inflation, except for two brief blips in 2008 and 2011, when they nearly converged.

As of 2019, that translates into a yearly spend of $11,582, roughly six times higher than what Americans were spending in 1970 when adjusted to 2019 dollars. This inflation isn’t just eating into people’s paychecks; it’s the country’s leading cause of bankruptcies. And it’s projected to rise by 5.5 percent per year over the next decade. To put that in perspective, the three-decade-high annual inflation recorded this October was 6.2 percent.

There is, again, a clear solution to this. No less than twenty-two studies, including one by a libertarian think tank, have found that a Medicare for All, single-payer health care system would save trillions of dollars worth of overall health care spending in the United States, largely by streamlining the current bewildering “system” that’s spread over a dizzying array of profit-seeking private insurers and slashing administrative costs. It would also save money for individual consumers, who would no longer be gouged by these predatory insurers.

At the very least, Congress could create a government health insurance scheme, the fabled “public option,” to inject some competition into this market and give people a more affordable choice. This is exactly what Biden and the Democrats claimed they were going to do during the election campaign. But of course, both parties vehemently oppose Medicare for All, and the Democrats simply stopped talking about the public option after they won, opting instead to shovel subsidies at the problem to keep insurers fat and happy. It’s simply a form of inflation the whole of Washington doesn’t care to touch.

Zoned Out

Let’s take another life necessity: housing, the largest single expense any normal human being will take in their lifetime. Adjusted for inflation, the median home value more than tripled between 1940 and 2000, leaving the general inflation rate in the dust. When adjusted for today’s dollars, average home values soared by 118 percent between 1965 and 2021, while incomes only went up 15 percent.

The house-price-to-income ratio of 2.6 that experts say separates affordable housing from not has been obliterated in many of the country’s most populated metro areas, like Los Angeles, where that figure is 9.6. Over the last two years alone, the ratio nationally shot up nearly 15 percent to 5.4, more than double the ideal ratio for an affordable home. This has, in turn, pushed rents higher too, which are becoming increasingly likely to swallow up more than a third of people’s income.

This has done more than just lighten the average person’s wallets. It’s meant a steadily growing homelessness crisis and high rates of poverty, and it contributes to a variety of other knock-on effects, including lower fertility rates and suppressed consumer spending. But again, while Congress seems willing to throw money into band-aids for the problem, there’s little talk of imposing the kind of national rent control that Bernie Sanders proposed in 2020 or of wresting rental units from corporate mega-landlords, as Berlin just did.

Or look at the cost of higher education: According to one survey, young Americans can look forward to spending an average of twenty-one years trying to pay off an average loan of nearly $30,000. Between 1985 and 2017, the average cost of going to a four-year college rose just under 500 percent, more than double the rate of inflation in that period. From just 2008 to 2018, the cost went up 25 percent for private schools and a little under 30 percent for private ones and wages haven’t nearly kept up. The debt people have been left servicing is the largest share of the country’s nonhousing debt.

This inflation crisis could be solved through an infusion of investment into public colleges — which have been raising their tuition fees to make up for state government cuts to their funding — as well as wholesale student debt forgiveness and free higher education going forward. But these ideas are unpalatable to much of the political establishment. The Republicans who bleat about the price of burritos going up a few cents are in lockstep opposition to saving people tens of thousands of dollars with these proposals. Meanwhile, Biden and the Democrats have cut college affordability from their legislative plans and have simply stopped talking about even the miserly debt forgiveness plan the president reluctantly adopted during the election campaign, with Biden having so far only canceled a puny $11 billion of the nearly $1.8 trillion worth of federal student loan debt.

One could go on and on. If you live in the United States, inflationary pressures are all around you and have been getting worse for decades — they just happen to be most virulent in the parts of the economy that almost no politician wants to touch.

Republicans obsess over inflation because it presents a fresh strategy for strangling government investment in people and keeping taxes low for the wealthy. Democrats will only discuss inflation as far as it relates to the current supply chain crisis. And through this unspoken agreement, both parties get to avoid talking about the country’s worst inflation crises and about ending the free ride for the private interests that profit massively by causing them. Everybody wins — except you.