Bidenflation is a National Crisis
Inflation is a brutal indirect tax that falls most-heavily on the people who can least afford it.
At the end of 2021, 61 percent of Americans were living paycheck to paycheck.
Even though employers increased compensation to attract and/or keep workers last year – private-sector average hourly earnings rose 5.7 percent – the Labor Department reported that inflation eroded everyone’s buying power.
Currently at 7.5 percent, the worst in forty years, inflation has increased the number of families struggling to cover living expenses. Groceries are up 10 percent-plus, gasoline a third or more. The average family is facing a $276 per month budget-buster.
President(ish) Joe Biden’s policies are driving inflation. Unsurprisingly, Joe “The buck (never) stops here” Biden disagrees.
But, Joe is guilty. “Bidenflation” is a national crisis.
In a recent interview, NBC News anchor Lester Holt questioned Mr. Biden about the rate of inflation, noting that, last year, his administration insisted inflation was “temporary.”
Biden blamed “supply chains”: “The reason for the inflation is the supply chains were cut off, meaning that the products, for example, automobiles – the lack of computer chips to be able to build those automobiles so they could function; they need those computer chips. They were not available.”
Not so, according to Obama administration Treasury official Steven Rattner who took issue with the president in a New York Times op-ed.
Instead, Rattner wrote that “vast amounts of government rescue aid,” and pent-up demand resulting from underspending during government-imposed pandemic restrictions are among the factors fueling inflation: “It’s a classic economic case of ‘too much money chasing too few goods,’ resulting in both higher prices and, given the extreme surge in demand, shortages.”
Rattner called Biden’s attempt to blame supply chain issues for rising inflation “both simplistic and misleading” (Read: “economically illiterate and dishonest”). He wrote that, contrary to Biden’s narrative, supply chains have not been “cut off,” but, rather, “just stretched.”
“Blaming inflation on supply lines is like complaining about your sweater keeping you too warm after you’ve added several logs to the fireplace.”
In any case, international supply chains are irrelevant or only peripheral to several Consumer Price Index groups, including housing (40 percent of the index).
Biden also tried to blame “powerful and greedy” corporations for boosting prices to “maximize profits.” But, so far, producers are getting squeezed harder than consumers. The Producer Price Index, the costs of goods and services to producers, rose 10 percent last year.
“Greedy” corporations haven’t passed all those costs through – yet.
Last October, 62 percent of registered voters correctly blamed Biden’s policies for rising prices.
During the 2020 campaign, Biden and his running mate promised to end fracking. Then, on his first days in office, Biden began attacking America’s energy industry by cancelling oil and gas leasing on federal lands and killing the Keystone XL pipeline, including thousands of union jobs.
The president’s policies reduced domestic production of conventional energy resources and raised prices for motor fuel, electricity, home heating, farm fertilizers, plastics, and other products that require fossil fuels in manufacturing processes and/or as feedstock – in a word, everything.
Mr. Biden and corporate media are also fingering Russia – again.
A war in Ukraine encouraged by Biden’s fecklessness in Afghanistan is likely to raise oil prices, but blaming Russia/Ukraine won’t fly unless Vladimir Putin invented time travel.
Energy prices – everything – began climbing a year before Russia invaded Ukraine.
Moreover, generous handouts in COVID relief legislation, among them incremental unemployment benefits, expanded child tax credits and rent moratoriums, gave Americans generous benefits without working. Businesses facing labor shortages were forced to incur higher payroll costs to attract workers, then raise prices to consumers.
Congress passed and Biden signed a March COVID relief package and a November infrastructure bill that, together, pumped almost $3.5 trillion of fiat currency into the economy.
Inflation is inevitable when governments massively expand their money supplies and over-stimulate demand.
Nonetheless, if Biden has his way, things will get worse. Analyses of Biden’s/congressional Democrats’ coveted “Build Back Better” bill show that its enormous unfunded spending provisions would create even more disincentives to work, idle millions of Americans, and drive inflation even higher.
Washington needs serious, level-headed officials who have the intelligence, character, resolve and independence to simply say “enough!”
Clearly, Joe Biden and congressional Democrats are not those people.