Even Democrats now blame the Biden administration for inflation, which is running at its highest level in 31 years.
“They poured kerosene on a fire,” former Obama economic adviser Jason Furman told the Associated Press. Not only did Furman reject the rosy view of inflation coming from Joe Biden these days, he blamed Biden’s policies for the inflation:
Furman suggested … misguided policy played a role ….Policymakers … “systematically underestimated inflation,” he said.
“They poured kerosene on the fire.” A flood of government spending — including President Joe Biden’s $1.9 trillion coronavirus relief package …. overstimulated the economy, Furman said. “Inflation is a lot higher in the United States than it is in Europe,” he noted. “Europe is going through the same supply shocks as the United States is, the same supply chain issues. But they didn’t do nearly as much stimulus.’’
On November 10, Biden himself admitted that his $1.9 trillion stimulus package was contributing to higher inflation.
At the beginning of Joe Biden’s administration, people warned that more government spending would spawn inflation. Congress had just passed a massive stimulus bill less than two months earlier, and most of that money hadn’t even been spent yet. Adding an even more massive stimulus, as Biden did, was so directly inflationary that it hardly could be denied.
Those warnings came from not just from conservatives, but also from liberals and Democrats, such as former Treasury Secretary Larry Summers. Nine months ago, he warned that the Biden package ran a high risk of producing the high inflation we see now:
there is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability… given the commitments the Fed has made, administration officials’ dismissal of even the possibility of inflation … there is the risk of inflation expectations rising sharply. Stimulus measures of the magnitude contemplated are steps into the unknown.
The Biden administration attacked Summers for warning about this, claiming that the former Treasury Secretary and President of Harvard University had no idea what he was talking about. As the National Review notes:
The reaction from the White House was fierce. Top advisers rushed to the cameras to push back. Summers was “flat-out wrong” that Biden’s team was “dismissive” of inflation risk, said economic adviser Jared Bernstein…
Summers was correct about inflation, but Biden’s economists dismissed him and some attacked him personally. It took months for them to fully come around — and it only happened after Biden’s approval rating suffered from voters’ perception that he wasn’t attentive to their concerns, a shellacking in the off-year elections in which inflation was a top concern and blindingly obvious data like that released today.
As Hot Air notes, “For the last few months, the media has been happy to pass along all of the happy talk about ‘transitory’ inflation, scoff at families who stress out over rising food prices, and even paint inflation as a great sign for America’s economy. After yesterday’s CPI numbers hit a 31-year record for inflation and show no sign of slowing down, the fuel for gaslighting has apparently run out, and Biden’s suddenly looking incompetent and lost on the issue that generally matters most to voters — the economy.”
The Biden administration’s stimulus package also contributed to inflation by reducing private-sector employment. That reduced production of goods, aggravating supply shortages for those goods. Because it discouraged many people from working, by paying them not to work, Biden’s $1.9 trillion stimulus shrank parts of our economy by reducing employment. Economists had expected that the economy would add more than a million jobs in April 2021, because it had been growing rapidly since fall 2020. But after Congress passed Biden’s $1.9 trillion “American Rescue Plan” in early March, employment grew by far less than expected, resulting in 700,000 fewer jobs.
