“Joe Biden’s Inflation” – and Other Idiocy

Election Day marks the merciful end of a silly season in the US that starts around Labor Day. It’s a time when we watch television at our mental-health peril. The years of presidential elections are the worst; mid-terms, like 2022, are the next worst.

Bombarded with screeched messages, we develop coping mechanisms. We may wear out the “mute” button , or record everything on a DVR to fast forward through political ads. Perhaps we simply try to tune out most of the noise. Unless we stop watching or listening altogether, though, some particularly obnoxious idiocy breaks through to our beleaguered consciousness.

For me, the worst has been the notion that we’re experiencing “Joe Biden’s inflation”.

Too Much Credit or Blame

Let’s start with a fairly obvious general point: Presidents usually get too much credit for good current economies and too much blame for bad ones. Determinants of the state of an economy are numerous and complex. Policies emanating from a president vie with those from other forces, especially the markets and Congress.  Those market forces at work are increasingly international in scope. Any big event anywhere affects everything, everywhere.

While it’s not impossible for an announced policy to have some immediate impact on the economy, it takes months and even years for most initiatives to move the economic needle significantly.

In this case, the foolishness of “Joe Biden’s inflation” goes well beyond merely overstating a president’s immediate impact on the current economy, however. The reasons could hardly be clearer; there are two major factors and two subtler ones, in place before the major factors, that set the table for inevitable inflation, or worse.

Obvious Cause #1: Covid-19

In General

Who thought we were going to get out of the worst pandemic in a hundred years without significant inflation, at the very least? Preventing financial collapse was the goal; inflation was inevitable. (As an aside, complaints about stimulus programs are rich, aren’t they? First, almost everyone supported them and lined up to take credit. New designs were required when a certain president’s name had to appear on the check. It wasn’t Biden’s. Second, stimulus checks deserved support. Third, the notion of Biden’s predecessor being a financially responsible conservative is hilarious.)

Consider fuel as one example. (It’s the best single factor to discuss because it affects the price of everything, like food, it is used to transport.) One of the very few advantages of the pandemic was that traffic disappeared overnight. There was no such thing as rush hour. Anyone with a reason to drive reached their destination in record time. Millions discovered stars in their night sky.

With the collapse of demand for fuel, prices dropped. Producers had to cut back production dramatically to avoid ruin. Emerging from the crisis brought not only restoration of more normal demand, but also two to three years of pent-up demand. Ramping up production involves far more than flipping a switch. Such high demand and low supply meant prices could do nothing but skyrocket.

As prices begin to settle back down, in fits and starts, should that be attributed to Joe Biden’s taming of inflation? If so, we’ll be re-assessing that every minute as the market for crude shifts. In a recent trip through parts of Europe, gas ranged from 1.90 to 2.20 Euros/liter. That’s $7.18 to $8.32 per gallon. Boy, that Joe Biden has enormous influence on global markets! Since it’s up again since I got home, it’s undoubtedly higher yet in Europe.

An intelligent discussion on the merits of Biden’s action on the Keystone Pipeline is possible, if anyone is interested, but it had nothing to do with the prices we’ve been paying at the pumps.

Handling of the Pandemic

First there was portrayal of Covid as a liberal hoax. When its existence became undeniable, next came denial of its severity – just another flu, if that. Keeping a safe distance was for sissies, even though experts had determined that the virus spread by people breathing on one another. It was somehow unpatriotic (?!) to wear a mask. Doing so to protect others was for losers.

In The Infodemic (Columbia Global Reports, 2022), Joel Simon and Robert Mahoney examine the ruinous approaches to Covid employed in two groupings of countries. The subtitle serves as a summary: How Censorship and Lies Made the World Sicker and Less Free. The first group was of authoritarian states like China, Iran and Russia, where censorship of truth is a blunt instrument. Those telling the truth about the virus were silenced by any means necessary.

In the second grouping, referred to as populist-led democracies, the authors say “governments relied on a more sophisticated and increasingly effective means of censorship, drowning the truth in a sea of lies.” (11) This they dub “censorship by noise”. Thus, “alongside the Covid-19 pandemic, there was an infodemic, a deluge of lies, distortions and bungled communication that obliterated the truth”, (10) with catastrophic consequences for public health and genuine freedom.

The three countries in the group of democracies whose similarly terrible handling of the crisis is described in detail are Bolsonaro’s Brazil, PM Modi’s India, and Trump’s USA. While aspects of Brazil and America’s responses were so similar as to suggest some coordination between Trump and Bolsonaro (sloughing off responsibility to more local officials being one example), some of the most bizarre behavior of any of the three countries came out of the White House. Historical analysis of American behavior for the years 2016 – 2020 will place us in relentlessly unflattering company.

Why Handle a Pandemic So Badly?

Donald Trump always knew he could not beat Joe Biden in a fair election in 2020, and behaved accordingly. That’s why he was so furious with Elizabeth Warren for not bowing out earlier (after disappointing primary showings), and throwing her support to Bernie Sanders. Trump believed he had a chance to beat Sanders.

Similarly, Trump was at his projecting best when he declared so long before the election that someone would try to rig or steal it. He knew that because he was planning to rig or steal the election. Step one was to declare victory early election evening. He went ballistic when thwarted by Fox News correctly projecting Arizona for Biden.

To have any chance against Biden, Trump knew he had to have an economy going gangbusters. So, he tried to deny the virus away, then minimize it. Then he was desperate to push ridiculous miracle cures. He ordered a hundred million doses of the vaccine while it was being developed, considering it his chance at re-election. He lost all interest in vaccination when clear it would not be ready before the election, other than getting it quietly for himself.

Some of the most heartbreaking stories from the whole ordeal were from caregivers relating how patients used their dying breaths to deny the existence of the virus that killed them.

Obvious Cause #2: Putin’s murderous rampage in Ukraine

It’s often called a “war”, but, as conducted by Vladimir Putin, it seems more a series of war crimes. While Putin devises ways to kill civilians with the evident hope of persuading them to give up, it becomes more evident that most Ukrainians would rather die than re-subjugate themselves to Russia. Meanwhile, the lack of enthusiasm Russian soldiers exhibit for the conflict seems understandable.

In any event, the economic effect is to lessen or negate each country’s participation in various global markets. Either or both are major players in a number of important markets – from oil, to wheat, to neon. (Europeans are wondering how they’ll stay warm this winter.)That last one, neon, is interesting. Ukraine is, or was, the world’s largest supplier: 70% of neon gas and 90% of highly purified semiconductor-grade neon used in chip production. Guess what happens to prices when supply of oil, wheat, neon and other essentials goes down suddenly and drastically.

Now, there actually is a president who spent every day in office giving aid, support and encouragement to Vladimir Putin’s every interest in the world. At the top of that list was destruction of NATO. Putin’s fondest aspiration is to be The One who restores Russia to its USSR glory, at least. The Mueller Report documents in exquisite detail the extraordinary lengths Putin’s Russia went in support of Trump’s 2016 bid for the White House. No effort or expense was spared.

Meanwhile, amid the chaos of American policy for those years, the one objective Trump worked on effectively and consistently was the evisceration of NATO, which had managed to keep peace in Europe since the last World War. Not a day went by, seemingly, without doing something to further alienate one or more of our allies. The traitorous quid pro quo could not be clearer.

The American electorate scuttled Vladimir and Donald’s plans in 2020, leaving Putin to do it the hard way. Startled, and perhaps a bit unnerved, by the speed and effectiveness with which Biden was resurrecting NATO and re-establishing America’s stature in the world, Putin invaded. Disastrously. The results are death, destruction, and yes, massively inflationary market disruptions – all done with the fawning approval of Donald Trump for his favorite “genius”.

The Inflation Table Was Already Set – Tariffs and Worker Shortage

Having written about this before, and cited the full-blown analysis available in the December 2019 edition of Fortune magazine (“Why Trump Is Bad For Business”), we’ll keep this relatively brief. Before anyone had ever heard of Covid-19, there were clear signs the economy was headed for trouble due to two flawed policies.

The irony is that Covid might have provided cover for these missteps, by taking the blame for a broken economy. An honest and competent attempt by an average president to encourage people to distance themselves sensibly and mask up would have gotten us to the vaccines in much better shape. Then, vaccines and boosters taken by all (other than the hard core 1-2% anti-vaxxers) would have provided finishing touches on a course that saved hundreds of thousands of lives and greatly lessened the economic impact.

It’s doubtful that such an approach would even occur to Donald Trump.

Trump’s Tariff War With China

As many have said, “Somebody had to do something about China.” Yep, somebody did, and still does. That something is not a tariff war. What’s needed is something tied to China’s piracy of intellectual property.

Tariff wars serve mainly to increase prices across the board to consumers. To the buyers of raw materials and finished goods, tariffs function very much like an enormous sales tax. It’s not impossible but it is rare for tariffs to help a US manufacturer or industry, or to hurt a Chinese competitor. More often, tariffs hurt more American companies than they help.

And, by the way: so cowed was China by this “getting tough” with them that they became more belligerent regarding Hong Kong, Taiwan, and the entire Pacific.

Trump’s Immigration Policies Choked Off Supply of Labor

Because he has employed so many of them over so many years, Donald Trump knows better than most that immigrant workers are as likely as anyone to work hard and behave well.  The “murderers and rapists” nonsense is the red meat upon which his base feeds, however. So, people seeking asylum are “illegals”. Immigrants are taking all these jobs from our college kids who were hoping to pick turnips in the hot sun all summer. And so forth.

The truth is that the number one thing holding back our economy is a lack of workers across the board. Help Wanted signs are everywhere. The labor shortage is a double whammy; not only is it stifling growth, but it’s also raising prices. Scarce workers cost more, obviously.

Meanwhile, we still await serious discussion, by adults, of whatever changes are needed to develop immigration policies we believe in enough to enforce.

In Short

There was a president who made the inflation we’re facing longer lasting and more severe than it had to be. It isn’t Joe Biden.

Other Idiocy

Out of all the other harmful and dangerous idiocy out there, let’s briefly address one more: Election denial.

I’ve seen estimates that over half of Republican candidates for office across the country in 2022 are election deniers, and that about 60% of American voters will have an election denier on the ballot. Recognizing there can be some divergence in how the term is defined, the point here is not to get mired in definitional disputes or statistics.

The point is that support for the notion that the 2020 election was stolen from Donald Trump should be disqualifying from holding public office for any candidate by reasonable voters of any political persuasion. Yet an incredible number of such candidates are on the ballot.

There has never been any basis for such a belief. For those with lingering doubts, despite the loss of 64 cases and the absence of any evidence, there is Lost, Not Stolen (https://lostnotstolen.org/). A group of leading, life-long conservative Republicans produced this exhaustive, documented study of all the baseless allegations of a stolen election one might hear. They categorically obliterate every argument made about the results in Arizona, Georgia, Michigan, Nevada, Pennsylvania and Wisconsin. They conclude: “In fact, there was no fraud that changed the outcome in even a single precinct.”

Anyone arguing the 2020 election was stolen at this point is either (1) psychotic; (2) truly stupid; or (3) simply lying.

Let’s be clear on what’s at stake here. In many US jurisdictions, there are a number of Republicans hard at work to change the outcome the next time Donald Trump, or someone of his ilk, makes the call he made to Georgia Secretary of State Raffensperger. In response to “Find me 11,780 votes!” they don’t want to hear “That’s not how we do things in America.” No, they want to ensure the answer next time is “Sure. In fact we’ll ‘find’ a few extra hundred to make it look better.”

Conclusion

I yearn for the good old days when “liberals” and “conservatives” argued about taxes, too much vs. too little regulation, big government vs. small, and the like. Indeed, I miss the day when one could have any discussion on the merits.

The argument now is whether basic American principles like checks and balances, the rule of law, and free and fair elections are worth preserving. Not content with “mere” voter suppression and grotesque gerrymandering, some now have voter nullification as the goal.

In a saner time, it would be safe to assume that anti-democracy, un-American cretins would be routed off to political oblivion. How we vote today, and perhaps in the next election or two, will determine whether our votes will continue to matter.

Ken Bossong

© 2022 Kenneth J. Bossong

Superior Forces

Lawyers all over the country are brushing up on a legal doctrine called Force Majeure. Why? Because it is the key lens for viewing deals disrupted by the pandemic. Since COVID-19 is disrupting almost all human interactions, Force Majeure and related doctrines are well worth examining. If you haven’t already, you’ll be hearing the phrase soon – and often.

When the Law names a concept or a doctrine, it usually resorts to Latin. You may have heard phrases like quid pro quo (“this for that”) or res ipsa loquitur (“the thing speaks for itself”) bandied about recently, for example. Force Majeure is French (“superior force”). So, there’s that.

What really makes Force Majeure interesting and not only for lawyers, though, is how aspects of the doctrine relate to our every-day approach in facing adversity. There are lessons for life in considering what matters here. (No, it’s not that hordes of readers are combing the Internet for posts on the law of Contracts. And no, what follows is not legal advice, obviously.) So, what is it?

The Concept

In ordering our affairs, we seek to hold each other, and ourselves, to doing what we promise to do. Courts are not pleased with those who breach contracts, and assess money damages for doing so. We value promise-keeping.

What happens, though, when an abnormal, outside event prevents one or both sides of an agreement from doing what they promised? That is, if a force superior to the parties’ intent intervenes? (Note: we’ll refer to this simply as the “event”. Also, to do what was promised is to “perform”.)

If someone has a contract with a town or a county to fix a road’s potholes (don’t we wish!) and an earthquake destroys the road, what happens to each side’s obligations? Or if one is hired to paint a barn that burns to the ground? The possibilities of events beyond the parties’ control (whether the cause be nature – floods, earthquakes – or mankind – terror attacks, war) are endless. The potential for complexity far exceeding these plain examples is limited only by the scope of our entanglements.

Sophisticated written contracts often contain Force Majeure clauses. In them, a parade of catastrophes is listed with some attempt to agree in advance who gets to skip, change, or delay performance – and under what circumstances. Some clauses include a catch-all provision to deal with events not mentioned.

After The Event

After the event occurs, if everyone agrees what should happen next, there’s no legal problem. (There are always the hardships and heartaches involved in picking up the pieces, unfortunately.) When the parties disagree, however, even after trying mediation, the courts ultimately must decide.  Was the event a Force Majeure? If so, how does it affect what the parties promised to do?

If there is a contract with a Force Majeure clause, the court will interpret and enforce that language. As in many areas of law, state law will govern. While that means the law will vary some, certain kinds of issues generally will matter:

  • If not completely unforeseen, the extent to which the event was unavoidable or not within the control of the parties  
  • Whether the event directly caused the inability to perform
  • To what extent there was a true inability to perform
  • Whether there were any attempts to perform
  • If the doctrine applies, what the appropriate remedy should be

The burden of proof is on any party seeking to invoke Force Majeure. Obviously the cases will depend on their facts, but there’s no doubt that COVID-19 will present numerous, daunting legal problems.

When There Is No Force Majeure Clause

It is possible to have either (a) an enforceable contract that is verbal rather than written, or (b) a written contract that does not contain a Force Majeure clause. Either way, there may still be a remedy. To address this very briefly, two similar doctrines of law have evolved in our so-called “common law”, on a case-by-case basis.

Impracticability is not just impracticality with an extra syllable, so lawyers can have another word nobody else says. It means something is beyond simply not practical to do, even if not quite impossible. If impracticable, it can’t be put into practice under the circumstances. So, parties invoking the doctrine must show the event to have been beyond their control and destructive to one or more of the contract’s essential assumptions.

Then there is Frustration. This is not exactly what Muddy Waters was singing about in “I Can’t Be Satisfied”, later inspiring the Rolling Stones’ “(I Can’t Get No) Satisfaction”. It is frustration of purpose. So, again, if parties reach an agreement based on assuming certain things will or won’t happen, and an event not their fault later shatters their assumption(s), relief may be available. Was the purpose of the contract frustrated?

[For anyone wanting more detail on the three doctrines, a quick search will provide scads of information. Continuing Legal Education is going berserk with courses on all this – all webinars, to be sure.]

Digging Deeper Into What Matters

In the flood of litigation expected in the wake of COVID-19, courts will have much to consider. Whether there are Force Majeure clauses to interpret, or doctrines like impracticability or frustration to apply, judges will find themselves asking similar questions:

Was performance impossible, or so difficult that it might as well have been impossible? Or was it just annoying, inconvenient, or somewhat more difficult or costly than anticipated? How difficult is too difficult?  Did the pandemic cause the impossibility in this case? Was it even relevant?

Did the parties act honestly and in good faith? Try to perform? Seek to limit the harm or avoid the negative consequences? Seek alternative solutions? Communicate?

Is there a way out of the situation that makes sense? Can justice be done? Is one side trying to take advantage? Is the event just an excuse to renege, or an attempt to renegotiate a deal one regrets? Should the contract simply be void? What if some sort of under-performance is possible, and better than nothing?

Equity and the Truly Superior Forces

Like anything else, the Law is not perfect. Limitations and imperfections exist, whether in statutes, common law, rules, or regulations. Inflexibility is therefore problematic. Up steps Equity, the conscience of the Law. Equity does not oppose the Law, but supplements it with an overriding concern for fairness and good sense. By the way, “Equity” (or “Chancery”) sometimes denotes a division in the court system where remedies other than money damages are sought. Equity’s principles or “maxims” are generally available to interweave with the Law, however.

Of all the old Equity maxims, my favorite is this: He who seeks Equity must do Equity. Wise words, those.

Honesty, fair dealing, good faith, reasonableness, decency, concern for the big picture – these are the kinds of things courts will be looking for in deciding Force Majeure (and related) cases. They’re also what we demand of ourselves and each other when we are at our best.

These are the truly superior forces.

The wise among us don’t wait for the courts to tell us so on a case-by-case basis. What the courts decide to do always carries tremendous significance, but is not as important as what we decide to do – every day, in matters large and small.

The current saying is “We’re all in this together.” In a sense that’s always true, not only during a pandemic and not just with respect to health.  Behavior, good and bad, matters. Bad behavior harms not just the victim but the perpetrator as well, and then ripples through the community. The same is true for the benefits of the good.

Our system and our way of life depend upon our embrace of truly superior forces – among them honesty, fair dealing, good faith, reasonableness, decency, and concern for the big picture. Whether our being “all in this together” ends up a blessing or a curse depends on us.

Ken Bossong

© 2020 Kenneth J. Bossong