The Bureau of Labor Statistics (BLS) recently reported that the Consumer Price Index (CPI) rose in February for the second consecutive month, debunking happy talk by the White House and the corporate media to the effect that inflation is under control. The cumulative increase in the overall cost of living since President Biden took office in has now reached 18 percent — and the voters know it. This is why the RealClearPolitics average of polls shows that 61.7 percent of voters disapprove of Biden’s performance on this issue. And this level of disapprobation is related to his stubborn refusal to take any responsibility for causing inflation in the first place.
[I]nflation is a product of Biden’s absent leadership. It has destroyed the Democratic coalition whose foundation once included working class voters.
During his March SOTU, for example, he insisted that the cause was greedy corporations that “raise prices to pad their profits.” The corporate media parroted the “greedflation” canard, but it is no more responsible for inflation than was the “Putin price hike.” That excuse fell flat because prices were already spiking before Russia invaded Ukraine. Indeed, a month before the invasion, the BLS reported a 7.0 percent CPI increase for the 12 months ending in December of 2021. This was the largest 12-month increase in 39 years and its cause was the Biden administration’s insane spending spree. As former Obama advisor Steven Rattner pointed out in the New York Times well before this hair-raising CPI report:
The original sin was the $1.9 trillion American Rescue Plan, passed in March [2021]. The bill — almost completely unfunded — sought to counter the effects of the Covid pandemic by focusing on demand-side stimulus rather than on investment. That has contributed materially to today’s inflation levels … So the administration should come clean with voters about the impact of its spending plans on inflation.
Neither the President nor his congressional accomplices took that advice and now they are facing an election that will be decided by voters who believe they are worse off now than before Biden was elected. According to the latest Fox News poll, only 22 percent of respondents say they are better off than four years ago. This number is deadly if history is any guide. Ronald Reagan famously asked Americans during his 1980 debate with then-President Jimmy Carter, “Are you better off than you were four years ago?” Like Biden, Carter had presided over an economy characterized by high inflation, and the resounding answer to Reagan’s question came on Election Day when the voters elected “the Gipper” in a landslide.
Reagan’s 1980 victory also had profound implications for the Senate, where the Republicans won control for the first time since 1955. The Democrats face a tough Senate map in 2024, and a repeat of the Carter debacle would almost certainly result in a GOP majority. Yet the President and Senate Democrats are determined to repeat one of Carter’s worst blunders. He tried to curb inflation with wage and price “guidelines,” as the Washington Post reported at the time. This inevitably failed to affect inflation, yet the President wants Congress to pass the Price Gouging Prevention Act introduced by Sen. Bob Casey (D-Pa.). This is just another doomed price control scheme. Why? As Milton Friedman famously said:
Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output. Moreover, in the modern era, the important next step is to recognize that today, governments control the quantity of money. So that as a result, inflation in the United States is made in Washington and nowhere else.
This means that government legislation can’t cure inflation with price controls because prices are a symptom of government-created inflation. Inflation is nothing more than too many dollars chasing too few goods and services. Consequently, there are only two ways to reduce inflation — decrease the quantity of money sloshing around the economy or stimulate the output of goods and services enough for productivity to catch up with the money supply. The legislation advocated by President Biden and Senator Casey will have no effect on inflation, but it would create shortages of some goods and services. Casey seems particularly obsessed with Big Food. If it passes, we may experience the first food shortages of our lifetime.
Casey is running for reelection in 2024, and he needs to insulate him from the blowback that inflation created for Democrats. He should have considered that before casting robotic votes for every bill Biden endorsed. Now, he leans into the “greedflation” narrative. In the end, inflation is a product of Biden’s absent leadership. It has destroyed the Democratic coalition whose foundation once included working class voters of all creeds and colors. These voters have been hammered by inflation and fondly remember that Donald Trump presided over a three-year period of peace and prosperity before the advent of COVID-19. They don’t blame Trump for the pandemic, but they definitely blame President Joe Biden for inflation.
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