by Paige Terryberry
Senior Analyst for Fiscal Policy, John Locke Foundation
In his forthcoming State of the Union speech, “President Biden will emphasize his efforts to curb inflation,” reads The Wall Street Journal. We can expect Biden to offer a litany of excuses and flimsy explanations for inflation and turn a blind eye to the massive, irresponsible government spending spree at the root of rising prices.
As inflation continues to break records, the left, including the media, has chosen alibis that suit their agenda. At the same time, they play Whac-A-Mole with any valid reason or antidote. They assure us that inflation comes from everywhere but printing money.
Here are a few of the scapegoats for inflation that Biden may blame at the State of the Union next week:
In a recent NBC interview, Biden claimed, “The reason for the inflation is the supply chains were cut off.”
Even former Obama officials are coming out to decry this as “simplistic and misleading.”
Supply chain problems are exacerbated with lousy government policy such as vaccine mandates, excessive unemployment benefits, and environmental and labor mandates on truckers and port workers.
Indeed, the supply chain issue certainly has not helped prices. But it is not the cause of inflation. Consumers have shifted their spending during the course of the pandemic. Governments shut down parts of the world, leading to an extreme surge in pent-up demand and supply shortages of certain products. But that would lead to a rise in prices for those specific products, not across the board.
2. Big, greedy businesses
Meat and energy corporations rife with “corporate greed” are raising prices to stick it to the little guy. Meat and poultry companies in particular “can increase their own profits at the expense of both farmers—who make less—and consumers—who pay more,” says the Biden Administration.
But these companies were not suddenly overcome by greed. Their price hikes are a result of inflation, not the cause. Of course, everyone is having to raise prices to consumers to pass along the rising costs of inputs. Without the billions in newly printed money created to fuel out-of-control deficits, prices would not rise across the board.
The Left’s attack on the food and energy industries is just one feeble attempt to deflect blame away from the Biden Administration for the skyrocketing prices.
3. Global causes
Inflation is a global issue. It cannot be the result of U.S. action, according to the Left.
Yes, other countries are experiencing inflation. Those countries also printed money. Though the U.S. spent the equivalent of 27% of its GDP over the pandemic, other countries were not far behind. Germany, Sweden, and Finland all spent the equivalent of 20% or more of their GDP on stimulus.
Just because other nations took the same measures that cause price inflation does not magically absolve the Biden administration of any blame.
As inflation persists, Biden continues to pat himself on the back for his efforts on the economy. We can certainly expect to see more of this self-commendation at the State of the Union.
Biden stated, “America is back to work.” Wielding the January jobs data to his advantage, he claimed, “If you can’t remember another year when so many people went to work in this country, there’s a reason: It never happened.” He continued saying: “History has been made here.”
This, of course, is an absurd claim to make, given that the year prior saw the largest one-year job loss since the Great Depression due to government shutdowns. The 2021 job growth was merely a reflection of regaining much of those jobs lost as the economy was allowed to reopen. We have still not reached 2019 levels of employment.
The first step to fix the critical issue of inflation is acceptance. We will likely not receive an admission of failure from the same administration that declared the Afghanistan withdrawal an “extraordinary success” and the labor shortage dilemma as a “Great Upgrade.”
Biden’s reactions to inflation will shape his party in 2022 and beyond as workers and their families continue to suffer from price increases. The president should face inflation head-on and admit that deficit spending fueled by newly created money and our precarious debt are to blame.
Stay tuned for a follow-up piece reviewing the scatterbrained solutions from the Biden Administration, as well as some demanding but honest answers.