Montana News
Inflation, politics and 'the three Ps' of informed economic voting
With Montana News, I'm Josh Burnham. Ahead of the 2024 election, MTPR will bring you coverage on issues we've heard are most important to voters. That includes the cost of living. MTPR's Austin Amastoy did some digging to find out how much prices have changed over the last four years and how much power politicians have over your pocketbook. He joined news director Corin Gates Carney to share his findings. So, Montans have told us the economy, the cost of living, the cost of just about everything is important to them as they cast their votes this year, and Austin, you spoke to some folks about this, what did they have to say? Sure, let's start with Missoula resident Diane Savage Connor. She lives in a single-level home and retired five years ago. She tells me she had to pick up hours nannying last fall just to afford her property tax bill. I've always been very frugal because I was a stay-at-home mom and so, you know, had to live on one income. I just figure as long as I'm healthy enough to work, I might as well keep earning money. Property tax increases, groceries and power, Montanans are spending more money than they used to on basic needs. I also spoke to Annie Myers from Helena about this. She and her boyfriend have struggled to find an affordable place to live in the city. It's just exploded. I've never, I mean, even when I first moved out, you could find something pretty decent for like under a grand and now that's just, that doesn't exist. Put some numbers on this for us. We've heard a lot about inflation rates, rising home values going up over the last few years. Would you find about how much consumer prices have changed? Well, we can really trace the recent spike in prices back to May 2020. Economist Patrick Barkey pulled some stats on how much prices have increased since then. He leads the Bureau of Business and Economic Research at the University of Montana. Well, for food, it's between 20 and 30 percent higher. For energy, 40 to 50 percent higher. Some services, a lot more, many services, not much more at all, to get into some variability. So some variability, but those are stark increases. Yeah, and that's led to a lot of finger pointing in campaign rhetoric this year. So let's cut through the noise corn and talk about some of the big causes behind price spikes over the last four years, who actually has the power to impact the economy and how Montanans can be informed economic voters. It sounds like a great road map. Take us back to May 2020. What started driving consumer prices up? Well, right at the onset of the pandemic, governments ordered people to stay home and businesses close for a couple of weeks, global transportation more or less froze after that. And that initial shutdown was long enough to really disrupt the flow of goods. That meant that high demand products started increasing in price due to short supply. And then those shortages cascaded across the market. Montana State University economist Christiana Stoddard used the example of the computer chip shortage. That made new cars really expensive, new cars getting really expensive. People started substituting short used cars, used cars started getting really expensive. So the supply chain, things impacted many more markets than just, you know, a one single one. Then the labor market thinned out as workers resigned in waves. To court new employees, many businesses raised wages and to afford higher wages, many raised their prices. One important note here though, Corinne Montana Labor Department data show that many residents wages in the state have grown faster than consumer prices have. Large pay in 2023 was 32% higher in Montana than in 2018. Only three states wages grew faster. So does that mean Montanans aren't feeling the pinch of inflation as bad as people in other states? You know, I asked Barkey that question and he told me it's complicated. While many Montana's wages have likely outpaced inflation, that doesn't mean it's true for everyone. As all of this was happening, Congress during the pandemic passed a series of relief packages to try to keep the economy afloat. Right. And listeners might remember some of those names. There was the CARES Act, the Paycheck Protection Program, the American Rescue Plan Act, and the first two of those were signed by then-President Donald Trump, the latter was signed by President Joe Biden. That's right. And according to pandemic oversight dot gov, the grand total of those spending packages crested $5 trillion. So let's recap, pandemic shutdowns disrupted supply chains, consumer demand for some products couldn't keep up with supply, and Congress flushed the economy with cash. Stoddard says this is where the finger-pointing often begins when it comes to inflation. "Many people wanted to be like, 'Oh, it's a government causing it by having these stimulus checks,' or, 'Oh, inflation isn't real, it's all supply chain issues,' and the reality was it was a combination of all of those things." So the story behind rising prices is complicated. Is it possible to sharpen the focus on who is responsible for the price increases? Well, let's start with the easy answer. No single president or member of Congress caused your grocery bill to go up. But their collective actions might have had an impact. Stoddard told me the national economy is sort of like a house. "I think sitting presidents can do better and worse jobs of the home maintenance. I think they can be more or less assertive about eliminating the termites. But the overall structure of the house, they don't have that much control over." Many economists also place some blame on Congress for approving too much new spending in the years following the pandemic. U.M. economist Patrick Barkey also points to the Federal Reserve, which can help cool inflation by raising interest rates. He and other economists think it acted too slowly to prevent prices from rising. "Okay, so it sounds like one of the big takeaways is that economists generally don't blame one president or one policy, one political figure for those price hikes we felt." That is the big takeaway, yeah. "So if we can't hold one person or policy accountable for rising prices, how can people thinking about the economy use this information when it comes time to vote? It's an important issue. So how much sway do elected officials in Montana have over prices?" And that brings us to our third expert. "I'm a price word. I live in Missoula, Montana. I'm an economist." I asked him that second question about whether elected Montanans can influence prices at all, he told me to picture a small boat out at sea. "Montan is the boat. We do not control the ocean, whether there's storms, whether there's which way the currents are going, which way the wind is blowing, all that kind of stuff, but we do get to control our boat." So the U.S. economy is pretty much out of Montana's control, but politicians here can help us navigate it. Is that what word means? Exactly, Corinne, and Ward says there are some specific expenses our elected leaders here do have some influence over. Two big ones are housing policy and property taxes, both of which are definitely in the limelight right now. "Right, and if listeners want to catch up on why home values and residential property taxes spike last fall, there's a separate story you did some great reporting earlier this year. Folks can find that at mtpr.org." The story is called Making Sense of Montana's Property Tax Blame Game. For now, though, I want to leave listeners with a tool Ward talked about that may help you be a more confident economic voter. He called it the Three Peas. "Does the person that you're potentially voting for agree with you on what the problems are?" First, Ward suggests identifying the things you consider economic problems. Maybe gas prices, housing supply, or property tax rates, for example. Research your candidates to see if they also identify those as problems. Again. "What do they think the priorities are amongst the things that are problems?" Priorities. How much does the candidate you're considering voting for prioritize those issues? If they seem low priority, they may not follow through. Finally. "What are the policies that they're going to try and do to address the problem?" The big one, policy. The economist I spoke with said individual policies are where candidates can most influence specific aspects of the cost of living. Take some time to research your candidate's policy positions and see where they intersect with your priorities. MTPR can help you find candidate's policy views. We ask the major statewide and federal candidates for their positions on a few economic problems, and we'll have those linked to this story on our website. Bottom line, Corin, the economist I spoke with say being an informed economic voter takes more research than just listening to who the campaign ads are blaming for your gross or your property tax bills. Problems. Priorities. And policies. That are a good place to start. Awesome. Thanks for your reporting. Happy to do it. This is Montana Public Radio.