America's Talking - Episode 37: Inflation expected to get worse this year

Episode Date: March 11, 2022

Inflation expected to get worse this year. Consumer prices rise nearly 8% causing major inflation fears. Small businesses concerned as job openings hit record high. As gas prices reach record highs Biden to band Russian oil imports. Support this podcast: https://podcasters.spotify.com/pod/show/america-in-focus/support Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

I was actually a ballboy. Good for you because even being a ballboy takes a slim iota of athletic ability. Yeah. Okay. Thanks. Welcome to American Focus. I'm Cole McNeely, General Manager of America's Talking Network. American Focus is a production of America's Talking Network.

You can listen to American Focus and all of our podcast at AmericasTalking.com. That's America's Talking.com. Now here's your host, Dan McAulip. Thank you, cool, and welcome to American Focus, the podcast where we talk about the news from our nation's capital and the issues that matter to you. I'm Dan McAulb, executive editor of the Center Square Newswire Service. American Focus is brought to you by America's Talking Network, the podcast hub where you can find news, civil conversations, and all of the Center Square's great podcasts. Go to America's Talking.com to check out all over the available podcast. Once again, that's America's Talking.com. joining me today as he does every week is Casey Harper, Washington D.C.'s bureau chief for the center square.

Casey, what is up? Dan, I just heard that we're supposed to be having civil conversation, so that's going to require some changes to the podcast on our part. But I wanted to hear about this, you know, I know you're a big Cleveland Guardians fan. The lockout is over. Lockout is over. What does that mean for you? Major League Base. Well, Major League Base.

Baseball's lockout is over. I wouldn't say I lost some sleep over it, but I am excited that baseball will be back in just a few weeks. I was sweating that out after the NFL season ended. A huge baseball fan. Like to get to some games, although with inflation where it's at, I don't know if I can afford a ticket or a beer or a hot dog at the stadium.

You excited for the nationals, the Washington Nationals, Casey? I am. You know, they're finally lifting some of the COVID mandates around here. so we can go back outside again without, you know, fear of being tackled by law enforcement. But, you know, I was actually heavily recruited by the MLB, Dan. I don't know if you knew that. There was a really, were you one of those guys that was, like, going to wear one of those

progressive signs except MLB signs in front of the stadium? You know, I was actually a ballboy, you know, Cincinnati and the Yankees were really fighting over me. Ultimately, I just felt a higher calling in journalism, though, and here we are. Good for you because even being a ballboy takes at least a slim iota of athletic ability. Yeah. Okay. Thanks for the heavy emphasis on slim, you know.

Thanks for that. All right. We actually do have some news, non-sports-related news, to talk about this week, Casey. And, you know, it sort of kind of seems to begin and end with this unstoppable record-breaking inflation. You've written a couple stories, a few stories this week about inflation, including one that looks like, you know, it's not going anywhere anytime soon. We can expect to see continued price hikes over the course of the year.

Tell us about that. Yeah, you're absolutely right. I mean, and you're kind of joking about the MLB game and the prices, but, and, you know, as if a major league baseball hot dog could get any more expensive. live it or not it can you're going to be topping like $12 hot dogs at this rate but that's good for my health though that's good for my health yeah yeah I mean there's a slim chance that you'll be able to resist but we'll see so yeah I think you know we got to joke about it good good back thanks I appreciate that it's but you know for a lot of families that is a real consideration I mean summer's coming up are you

going to go on vacation um you know I remember family vacations where we packed sandwiches um to to eat in the car on the way to driving to the beach. You know, the low budget family vacation is a very real thing. And if gas prices are up as much as they are, we're going to dig in some of the data and what some of the economic experts are saying about that. But I think, you know, it's important that we keep the emphasis in this inflation story where it belongs, which is the average American family is the one getting hit hard. And the budgets are being readjusted.

we've written at the cerniceware.com about the majority of Americans living paycheck to paycheck. You know, most Americans don't have cushion. They're going to have to give up something. Food prices are up significantly. Gas prices are up. And so these are the staples, you know, housing prices are up or rent as well. And so these are the staples that everyone lives off. So people are going to make tough decisions.

Do you go on that vacation? Can you go to the baseball game this year? Maybe you, I mean, let alone season tickets, but maybe this, you just sit this year out. And of course, that has ripple effects throughout your economy. Major League Baseball does not want to hear that, Casey. You should have whispered that one. Sure. I hope that didn't endanger our sponsorship.

They need butts in the seats at the stadiums across the country. But no, seriously, we've been joking a little bit. Yeah, while wages have increased year over year, they haven't increased anywhere near what inflation has done to prices at the gas pump, at the grocery store, at your home goods, If you have some summer projects coming up where you want to do whatever, do some work on the outside of your home, prices across the board are up significantly. Why don't we start with gas prices? I've got AAA's website up. And as I also should mention, we are recording this on Friday, the afternoon of Friday, March 11th.

And AAA's latest gas price tracker has the national average for a cost of a regular gallon of gasoline at $4.3 and $33.1 per gallon. That's up from about $2.60 just a little bit over a year ago. So more than a buck and a half a gallon. That's up from $4.17 earlier this week when I left. Right. Yes, right. And there's no, so almost 20 cents a gallon in a week. And there is no indication that this is not just going to start coming down, it's that it's going to flatline. There are some indications that the national average could peak above $5 a gallon before Memorial Day, the ceremonial kickoff of summer vacation season. But then if you look at it, to some of these states. California, $5.72 a gallon on average. Some other bigger states. The state of Washington, $4.73 a gallon. So, I mean,

Oregon, the same thing, 474 a gallon. Nevada, 492 a gallon. What's, I mean, what are you hearing about it? Yeah, I mean, you're absolutely right. This is a huge problem. And I think this is a great example of kind of the class distinction that we see in some of the policies. So, you know, I live in Washington, D.C. It's a very, it's a pretty young city. It's a very walkable city.

Everything is very congested. It's very close together. You know, New York City is the same way. And I lived in Washington, D.C. for a couple years without owning a car because of the train, because I could walk. It just, it's very doable. And even if you are driving in Washington, D.C., you don't have to drive that much. Everything's pretty close. You can opt not to drive pretty easily.

And that's actually true in a few of the big decision-making urban centers. And so I think, you know, this is like kind of a nuanced view, but there's a little bit of this whole meme of the ruling elites, right? Being out of touch with the needs of what people have. Why don't they just buy electric cars, you know, let the meat cake, you know, that kind of whole argument. Well, a lot of the people in D.C. who are making these decisions, and for our listeners, you don't know, the country is mostly run by, you know, people in their 20s and 30s who report to, you know, people who are older. But it's a very young city. It's very walkable. And so I really do think that because the locus of power has been so focused in big cities, like D.C. in New York City especially, where so many

people don't own cars, people don't walk. There are a lot of Tesla's around here. You know, I see them all the time. people really are out of touch with this idea that, you know, there's a lot of people in the rest of the country who might drive 20 or 30 minutes to work every day. And that's, you know, if you have a commute that long here, you might just take the train or something or walk. And so there really is a disconnect between decision makers in D.C. and what regular people are experiencing. That's what we try to cover at the cuntersquare.com. How is, how are these policies actually impacting regular taxpayers, regular people? Right. And so I, the, uh, The gas numbers I was read now is a price of regular gasoline, the cheapest gasoline.

Diesel is even worse, $6.30 a gallon in California. Of course, diesel used by, in particular, semi-truck drivers who transport goods and services, including food and groceries across the country. And that, of course, so the price of gasoline, when that is up significantly, that's going to drive price increases on a whole wide. range of goods and services. From your story this week, the All-Items Food and Energy Index, up almost six and a half percent. The food index increased by almost 8 percent. So it's not just impacting consumers at the gas pump, it is at the grocery store and everywhere else.

And it doesn't look like that's going to be coming down anytime soon either. That's right. Yeah. And I'll just read through some of this data that you reference. The Bureau Labor Statistics released the Consumer Price Index, which is this monthly, it's becoming this monthly economic doomsday report of just how much worse inflation has gotten. So they keep track of how it changes over the month and over the previous 12 months. And they take a lot of different goods and services and average out the prices.

way and against one another and find the index. And, you know, they found it their marker rose 7.9% in the previous 12 months, which is the highest in basically 40 years. If you look at, you reference the energy index, energy index and the food index are among the highest to go up. Gasoline index rose 6.6% in February alone. In February. Yeah, 6.6% just in February.

And so, you know, you referenced that over a dollar increase. in gas prices. A lot of it is coming in gas prices. A lot of it is coming in food prices. And those things make, you know, one, when people are spending more money on food, they're not spending it on more consumer goods. And so it's bad for the economy. But also when truckers are paying more to take goods to market, when it's baked in, it bakes in the cost, higher prices for all kinds of goods. You know, if you want to, you think that gas prices may not affect, if you want to go buy, you know, a bouquet of flowers for Valentine's Day or something, but actually somebody had to drive those on a truck. And it costs more to do that. And so everything is going up marginally.

And it's the steady trend. And you're right. It doesn't look good. I don't, you know, I talked to several economists this week about, you know, how bad is this? What is, you know, what can we expect? Is this going away anytime soon? And pretty much overall, they all said, no, this is going to be around for a while. The Ukraine and Russia is only going to make it worse. Right. Well, we're going to get into that second. One, just one quick note, Casey, I feel bad for your wife.

Valentine's Day was a month ago. Oh, man. I think you probably, you kind of missed out. Right. Yeah. On that. Is this where you're going to plug your marriage podcast? You're developing a second side.

I don't know. I don't, I don't, dating and marriage with Dan McAulb. I don't, I don't forget Valentine's Day. That's my only advice. I don't miss Valentine's Day with my wife. I forget about your TikTok, Dan. I know you're going to take time. Yeah, unfortunately, man, I tell you what.

All right, well, speaking of Russia and Ukraine, okay, let's get back to some serious, seriousness this week. Speaking of Russia and Ukraine, Russia, of course, invaded Ukraine a little over two weeks ago. And just this week, President Biden announced. that the U.S. will no longer allow Russian oil imports into the country. I don't disapprove of the policy. What's Russia is doing in Ukraine has been universally condemned, as it should be. But there will be a price for Americans to pay, probably a price for Americans to further pay,

with the banning of Russian oil imports. Tell us about that and what it could mean for gas prices going up even further. Yeah, I mean, there's kind of a few different levels to the story. The first is just the international level. What does this mean for Russia, for Ukraine, for the war effort? Then there's kind of the domestic impact energy prices here, the economy here. And then there's the political side of it. What is going on?

Politically, what is Biden trying to do? And how will this affect the midterm? I think we can maybe save the political angle for the, the end because I do think that Biden is trying to use a little slight of hand with this Russian oil import and trying to blame it on that when these prices have been going up for a while. But, you know, we get a little less than 10% of our oil from Russia before this ban. And what we've seen in recent months since Biden took office is an increasing reliance on foreign oil sources.

You may remember when Biden called on OPEC to drill more to lower prices. And that really raised a lot of eyebrows because, you know, under former president Donald Trump's administration, American energy independence was heavily prioritized. And so we saw a lot of drilling. We saw gas prices get really low. We saw, you know, pretty favorable regulations for oil and gas companies during his administration. And Biden was pretty quick to reverse some of that when he came into office. And it was really seen as a political move at the time. No one, I don't think, anticipated the, the, the.

the impact of Russia or any kind of ban like that. So they thought we could kind of, you know, eat the cost, I think, in our economy by doing, quote unquote, the right thing for the climate is how they would pitch it. But now we're seeing that, you know, the oil and gas conversation is not just about the climate. It's very much about national security. It's about foreign dependence. And so, you know, every expert I've talked to has basically said what you would expect, which is gas prices have.

I've been getting much more expensive over the last year. And that's going to continue. And in addition to that, this Russian ban on oil imports, this ban on Russian oil imports is going to just exacerbate that problem. And it doesn't seem like it's going to go away in the near term at all. You know, this is a very slow invasion. You know, even if, let's say Ukraine in three months totally falls to Russia, do we just say, okay, well, the war's over.

We're going to buy oil from you guys again. I mean, how long do we remain punitive in this? The one last thing I'll say on the international side is we did this without Europe. You know, we were in discussions with Europe. Biden said that in his speech. The ban you're talking about. The ban, yeah. And so far, you know, most European countries are still, they're so reliant on Russia that they cannot.

They just, well, they could. But it would be very, very hard for them to go independent of Russian oil. And it would be, that would be devastating for Russia. as well. I think in some ways you can say it's a cautionary tale. I mean, Europe has gone pretty green. They've become, you know, they're not really producing much domestic oil. Part of that is just because of where the oil is. But now they've become really relying on Russia and that's put them in a tough position. And so I think when you think about the U.S. moving so far away, or many who want to move so far away from domestic oil production and become so reliant on foreign powers,

You know, you see where it's put Europe in a position where they still have to buy oil from a country that's invading. Right. And so let's expound on that just a little bit. This week, 25 governors, Republican governors from 25 states called on the Biden administration to ease up on its regulations on U.S. oil and gas production to prioritize domestic oil and gas production. So we do not have to rely on countries. like Russia and the OPEC nations in the Middle East. Of course, when President Biden took office, among his first acts in office, was putting further restrictions on the U.S. oil and gas industry.

He banned new leases on federal lands for drilling. He ended the permits for the Keystone Pipeline, which was supposed to deliver cheap oil from Canada. into the United States. What's going on here? Yeah, I think you hit on a lot of it. The Keystone was a, was really a, in some ways, Keystone is kind of symbolic of the entire fight. I mean, the fight is more complicated, regulatory-wise and permitting wise than Keystone. But Keystone is a big political symbol for a president's stance on oil and gas. And Biden made it really clear, as you said, by coming against Keystone.

There's also just a lot of kind of regulatory things that happen behind the scenes. that trumpet kind of rolled back that are now slowing things down. And so it's a lot of states, I mean, you know, Alabama, Alaska, Arkansas, Arizona, Florida, Georgia, Idaho, Indiana, Iowa, Maryland, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming all signed up on this. So you'll notice there that it's across the board. it's not just deep red a couple of deep red oil producing states like Texas.

These are states all across geographically. Of course, definitely leaning Republican, but they are upset about this. I mean, it hits people pretty hard. And when you're already paying so much because inflation has risen because of federal spending, you don't want to have oil and gas policies that are just exacerbated that problem. Or that's the argument that they've made. All right. Why don't we move on?

Of course, inflation is at the top of all Americans' minds. Can't spend too much time on it. On the economy, but separate topic, small businesses, new survey came out this week. Small businesses are extremely concerned about jobs and filling jobs and the economy in general. What can you tell us about this report? Yeah, I can tell you that valuable, hardworking employees are more valuable than ever, Dan. So just keep that in mind. But am I supposed to take a hint from that or something?

Yeah, just, you know, you didn't get me anything for Valentine's Day. That's all I said. So, yeah, so, I mean, there's a couple economic markers that came out. We were talking a lot about the economy on this podcast, but it really is just dominated the new cycle in many respects. And so I do want to get into a little bit how this is impacting small businesses. So the National Federation of Independent Businesses released a report this week. that showed essentially the small businesses are much more concerned about the future than they have been in the past. And so they have something called the optimism index, small business optimism index.

And that decreased in February, which is obviously not good. It said 26% of owners reported that inflation was their single most important problem in operating their business, which is a big increase from December. So inflation is more in their minds. We're seeing that it's impacting small businesses. A lot of businesses have had to raise their prices. A lot of small businesses are having to go in and raise their prices. And this is especially important because often small businesses cannot absorb these costs the same way that a large business could.

So if a small business is competing with someone like Walmart and there's a big hit, you know, Walmart might be able to just to take someone. losses because they're such a big company. They can absorb it. They can move some money around. They can get loans much easier. But the small mom and pop place, they can't just, they can't absorb it. So they have to raise prices. So you go into the small business and you say, wow, this is a lot more expensive than Walmart. I'm going to go to Walmart. And so these kind of economic disruptions always hit small businesses harder because they're less able to weather the economic storms. You always see in financially difficult times that the rich get richer. Because, because the richer someone is, the more prepared they are to take advantage of kind of the suffering of the smaller businesses, the smaller firms.

And they often buy things up or they expand because they can afford to buy their time and look at the 10 or the 20-year game. Whereas a small business, they're just trying to make it through the next year potentially. So we try not to advocate too much on this podcast, but it's hard not to advocate for small businesses. they create the majority of jobs in the country. So folks, despite inflation, if you can, go out, go to your main streets, your downtowns, spend some money at your local small businesses. Let's keep them open past the pandemic. Casey, we have time for just one more topic today.

The pandemic has been waning across the country, cases down, hospitalizations down. States have been lifting things such as indoor mass mandates. blue states mostly because that's where they've been in effect in recent weeks and recent months. But the Biden administration, they decided to extend the mass transit mask mandate for a month. I was hoping to be able to get on a train or get on a plane and not have to wear a mask. I was on vacation a couple of weeks ago. I had to wear a mask for five plus hours. I know, woe is me.

You've got record inflation. You've got Russia invading Ukraine. And I'm complaining about having to wear a mask for five hours. But was it a surprise to you that the Biden administration extended the mass transit mask mandate? I think it was a surprise to a lot of people because the CDC just came out and said that the majority of Americans no longer need to wear a mask. And at the same time, state and local governments around the country have dropped those mask mandates, even in the most aggressive blue states, which have come down the hardest on businesses and different things with regulations for guarded. COVID. You know, I'm terribly sorry to hear that your quarterly Cabo trip is going to be masked up again.

I know it's going to be hard on you, but it's true for all Americans. If you're getting on a plane between going in an airport between now in April 18th, even though you may not have to wear a mask quite literally anywhere else in the entire country when you step into that airport before April 18th, you will have to put on a mask. There's been some talk that, you know, TSA hinted that they could drop that earlier if they wanted. But my read on this is that bureaucrats move slow. Dropping this mandate would be a big bureaucratic decision. They hadn't really decided whether to do it or not. So they extended it temporarily for 30 days so that they have more time to actually make the decision. That's a little bit of analysis, but that's my read on what's happened

here. So I think the real decision will come in the next month. Are they going to drop it? I think there's a good chance. They could drop it, but, you know, the argument for the mandate would be while, would be that while most Americans can go maskless, we're not at 100% maskless. And when you're on a plane, it's a big mixture and you don't know where people are coming from or where they're going to. They might be going from a place that has very low COVID numbers to a place that has high COVID numbers or vice versa. So that's the argument for the mask. But I think overall the sentiment is that people we're pretty tired of wearing masks. And there's a lot of science questioning whether masks even work, cloth masks work. You know, there is evidence supporting the medical masks. But you can wear a

cloth mask on a plane, even though it's been proven that cloth masks don't really do very much. All right. Well, we'll be paying attention to that. See if there's any updates on that. And, of course, inflation is a daily news story. So look forward forward to your continued reports there, Casey. but that is all the time we have this week. For those of you listening, you can find all of the Center Square's great podcast at AmericasTalking.com. That's America's Talking.com.

Please take a look, subscribe. There is no cost. For Casey Harbor, I'm Dan McAulb. This has been the America in Focus podcast. We'll talk to you next week.