How Will Record High Inflation Impact the Midterms in New Hampshire?


Stefanie Kistler, Staff Writer

DURHAM- With the midterm elections coming up, many political issues are coming to the forefront of residents’ minds. One of the most discussed topics is the record-high inflation rate the US is currently experiencing.

Most recently reported at 8.2%, the current inflation rate is at the highest it has been since 1981 according to ABC news. This rate is nearly eight times higher compared to only two years ago.

Michael Goldberg, a professor of Economics at the University of New Hampshire (UNH), says that while inflation may be high, in a broad sense the economy is doing well.

“The US economy is creating a large number of jobs every month, the unemployment rate is at a 50-year low, so honestly the economy is much more resilient than many think,” Goldberg said.

On the other hand, Goldberg said that the record high inflation is not something to bat an eye at, especially the speed at which it has risen in the past two years.

Goldberg attributes this quick change to the COVID-19 pandemic’s impact on supply chains. During the pandemic, many businesses lowered production or were even shut down completely, creating an imbalance between supply and demand. One of the most obvious examples of this is the coin shortage that started shortly after the pandemic started, in which the shutdown of minting factories created a lack of physical coin across the US.

Although the pandemic was a huge contributing factor, it is not the only thing economists are blaming for high inflation rates. Many say the slow response rate of the US Federal Reserve to the supply-demand imbalance is to blame for the continually rising inflation rate. However, as of recently the Fed has been giving their full attention to the inflation crisis.

“The Fed was a little slow in marshaling its forces, but since March they have been raising short term interest rates rather aggressively to combat inflation,” said Goldberg.

Raising interest rates works by choking off demand in the economy in an effort to bring back a supply-demand balance, which should then lower inflation. If the Fed is successful in this endeavor, it would hopefully do a large part in bringing the US inflation rate back down to around 3%, the average it has held for many years.

While the Fed says they are doing what they can, the rising inflation rate has sparked a fear in many NH residents of a possible recession.

Fourth year student Megan Wimsatt says that she often discusses the current inflation with her friends and family and hears lots of complaints about how prices are increasing, but paychecks are not.

Wimsatt will be graduating with her bachelor’s in 2023 and her master’s in 2024, and the possibility of graduating into a recession makes her very worried.

“A recession poses many challenges for newly graduated students. I want to find a place to live and be able to negotiate a decent salary. Because of the fear of recession, I have been searching much earlier (for a home) and saving money,” Wimsatt said.

Steve Cote, a recent graduate from UNH shared his concerns about the economy, and how he feels the current inflation rates are affecting him personally.

“I was afraid and still am of where the economy is at,” Cote said.

As a current employee at Harbor Capital, a financial and leasing corporation, Cote says he lucked out by finding a job that is raising his pay in accordance with rising prices. One way that he has been affected is the number of sales he makes.

“People I talk to say they cannot afford our product. The inflation rate has affected them, and in turn it affects me as a good part of my paycheck comes from sales bonuses,” he shared.

Cote says that although he is not currently that worried about his financial situation, he knows that he must be wary of the future for a possible recession.

NH resident, Abigail O’Neil shared that the high inflation rate has been on her mind a lot, especially as a mother of two. She currently works two jobs, in the day as a receptionist and at night as a bartender. Her husband works during the day and watches the kids at night.

“I remember the 2008 recession. So far, we have not gotten that bad, but I always thought inflation rates were a big indicator of what is to come,” O’Niel said.

O’Neill said that her cost of living has gotten much bigger this year, and it has really put a strain on her and her husband to pay the bills.

“I work hard, that’s all I can do. I just hope the government can put a stop to the rising inflation before it’s too late,” says O’Neil.

With inflation being such a forefront topic in the minds of the NH public, its importance for the upcoming election cannot be understated. Many candidates specifically discuss how they would combat rising prices in their campaign platforms.

Senate Election:

Current NH Senator Democrat Maggie Hassan is running again in the 2022 election, and said that she is working to lower costs for NH residents by moving supply chains back to NH, according to her campaign website. She says the first big step she did towards this while in office was aiding in the passing of the Inflation Reduction Act.

Republican Don Bolduc, also running for Senate, wishes to create less government spending to combat inflation rates according to his campaign site. He disagrees with Hassan that the Inflation Reduction Act worked, and says that it is ‘ineffective’ acts like this that have created the inflation problem.

Gubernatorial Election:

Switching over to the race for governor, current NH Governor, Republican, Chris Sununu said in an interview with CNN that he has believed that a recession was in the works for a long time. Through strong fiscal policy New Hampshire, Sununu says, will be ready under his leadership to combat this recession if he is elected again.

Democrat Tom Sherman, who is also running for NH governor, says that he intends to focus on building up businesses that produce NH made products to help uplift the local economy. He also says he wishes to lower taxes to aid residents during this time of high inflation, according to his campaign website.

First Congressional District Election:

For NH’s First Congressional District, current NH State Representative Democrat Chris Pappas says that he will stand up to big corporations to lower costs for NH residents according to his campaign site. He also says that if elected again he will work on lowering specifically prescription drug costs.

Running against Pappas is Republican Karoline Leavitt, who says that, if elected, will put small NH businesses first and fight to cut taxes to aid NH families during this time of high inflation, according to her campaign website.

Second Congressional District Election:

For NH’s Second District, current NH State Representative Democrat Annie Kuster says that if voted back into office, she will continue to fight to lower prices in NH, according to her governmental website . She also says that she believes more government intervention in aiding families is the best way to help people through rising inflation.

Republican Robert Burns, who is running against Kuster, says that they need to fix supply chains on a global scale in order to help the US economy, according to a WMUR article, and focus on small businesses.

While many of these candidates are making promises to lower inflation and aid NH families, how many of their ideas are doable?

One of the ways of lowering inflation discussed by the candidates was the idea of moving supply chains back to US soil and focusing more on local businesses. If achieved, this could fix one of the major problems the US economy has had during the past years of geopolitical strife.

Michael Goldberg says that in theory, this plan helps create more resilience in US supply chains in the long run. However, he warns that people must remember why businesses moved their manufacturing abroad; to save money.

“When the US businesses found cheap places to produce, they became very rich which in turn boosted the US economy,” says Goldberg, “businesses were spreading out their tentacles in terms of a more sophisticated and cheaper supply chain.”

As of recently Goldberg says that this trend of growth due to global manufacturing seems to be turning in the other direction. Global conflicts, the pandemic and other political issues cut supply lines, and the US has started to see the weakness in having supply chains in these cheap but vulnerable places.

Goldberg believes that what many candidates are saying, bringing supply chains back to US soil, would help fix the impact that global issues have on the US economy, but that it would cost the US more money to do so. However, he stresses that these kinds of double-edged-swords are the way that economics works.

“Economics is all about trade-offs. Maybe we have higher costs, but the long-term resilience would be much higher, and we would be less vulnerable to any geopolitical problems that flare up.” he said.

While inflation is clearly a very prominent problem in the minds of many, NH residents can make their voices heard on the subject by showing up to the polls this November and voting for the candidate that they believe will help NH through this inflation crisis.