The letter published Jan. 10 regarding price increases being the fault of greedy corporations caught my attention. I questioned if we need to add more economics education in our high schools but quickly realized there might be other reasons why the writer seemed so very uninformed.
Some basic economic facts are needed. First, all businesses must pay to comply with government regulations. In 1964, there were a lot less government regulations than there are today. Businesses pay a lot more to comply with those regulations. Thus, government policies increase costs.
Second, when the government borrows money, the cost of money for the private sector increases and interest rates increase. Thus, it costs private businesses more to do things like expand. Once again, government causes private companies to increase prices.
Third, foreign relations directly impact manufacturing companies’ ability to get raw materials. The issues in the Mideast are forcing cargo ships to travel around Cape Horn instead of through the Mediterranean Sea. That adds considerable time and costs to raw materials.
Looking at the politics of these basic principles, President Joe Biden doesn’t look so good. His predecessor cut government regulations, bringing down compliance costs for private business. Biden reinstated the regulations. Biden has dramatically increased the national debt, driving up the cost of money by increasing interest rates.
His perceived weakness in international relations has severely impacted international trade, as in access to raw materials. China is one of the major suppliers of the raw material for the batteries in electronic cars. I have been planning a trip to China for many years, and now I’m postponing it because, as an American, I don’t feel safe making such a journey. China is being aggressive because they know Biden is too weak to stand up to their aggression. How long before they cut off the raw materials for all that technology?
The president absolutely affects consumer costs.
Julie Wagner
Van Wert
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