INFLATION-- AN INEVITABLE OUTGROWTH OF BUSH ECONOMIC POLICIES

The Bush Regime has become adept at doctoring numbers and explaining reality to suit its own needs. With the same sincerity that Bush regimists could assure the American people that Iraq was brimming with WMDs and that a mushroom cloud was on the horizon, and that Saddam was working hand in hand with bin Laden, his Labor Secretary, Elaine Chao, the nest-feathering and extremely corrupt "wife" of Mitch McConnell, will assure us with a straight face that inflation is not a problem. Today's NY Times paints a more alarming picture:

Producer prices bolted ahead in May at the fastest pace in six months as energy and food costs marched higher.

The Labor Department reported Tuesday that its Producer Price Index, which measures the costs of goods before they reach store shelves, shot up 1.4 percent in May. That was up from a modest 0.2 percent rise in April and was the biggest increase since November.

Chao says if you don't count energy and food prices, there is no inflation. Is that because the housing market has collapsed and 2 decades worth of home equity has disappeared, with home prices dropping even faster than gasoline prices rises? Or is it because out of touch automobile manufacturers are willing to drop the price of their gas guzzling products that no one wants to buy any longer so drastically that buying a car-- except a hybrid-- is actually a genuine bargain these days?

None of that means much to the average American. What does that that "energy prices jumped 4.9 percent in May, also the biggest rise since November. Diesel fuel prices galloped by 11.2 percent, gasoline prices were up by 9.3 percent and home heating oil increased by 8 percent. Food prices also rose sharply. They increased by 0.8 percent in May, after being flat in April." And, as any economist-- or anyone with a lick of common sense-- will tell you, "energy and food costs will force companies to boost prices for lots of other goods and services, spreading inflation through the economy." That's part of poison pill Bush and his rubber stamp Republicans are bequeathing the nation in their wake.

I was food shopping yesterday. I read that pork is up by 8% in one month. I can't remember the last time I ate pork, but I know I certainly never did since 1970 when I woke up for the first time in the house I had rented just off the beach in Goa, went to the "bathroom," and realized-- viscerally-- that the waste removal system was the herd of pigs I had asked the uncomprehending, smiling landlord to remove the day before. Actually I was a vegetarian even before that. And yesterday I noticed that the prices of fruits and vegetables had all increased... significantly. Organic apples that had been selling for $1.49/pound were selling for $1.99/pound. That's inflation; I don't care what Elaine Chao-- or any other Bush dead-ender-- says.

Aside from food and energy, airplane travel costs have been skyrocketing, as have health care prices. At the same time, unemployment is rising rapidly as more and more people get laid off because of GOP/Blue Dog policies that have encouraged outsourcing and responded, predictably, to corporate belt-tightening.

Next comes the inevitable stock market-killing interest rate hike. Bernanke wants to start next week but he may hold off... for now.

Wall Street investors and some others predict the Fed will have to bolster rates later this year to ward off an inflation flare-up. Others, however, believe the Fed will leave rates alone through the rest of this year. Raising rates too soon, they said, will hurt the fragile economy, which has pounded by housing, credit and financial problems.

Soaring energy and food prices are walloping consumers and businesses alike.
Last week, the government reported that consumer prices jumped 0.6 percent in May, the biggest increase in six months. Those higher prices also are cutting into workers’ paychecks-- further straining budgets.

Businesses, meanwhile, also are tightening the belt. Employers have cut jobs every month so far this year. That’s pushed the nation’s unemployment rate up to 5.5 percent in May, from 5 percent in April-- the biggest one-month rise in two decades.

Producer prices are rising faster than consumer prices because businesses-- or competitive or other reasons-- have been limited in their ability to pass along all of their higher costs from energy and other raw materials to customers.

Elsewhere in the wholesale inflation report, prices for light truck dipped 0.9 percent and prices for cars dropped 1 percent. Cigarette prices rose 2.5 percent and airplane prices increased 1.1 percent, the most since August 2004.

And what can we expect from McCain? His record is clear-- four more years: