Whose inflation is it?
Democrats and the left-leaning new media are promoting another false narrative. It is about inflation.
According to the narrative, the inflation was caused by President Trump … period. Biden & Co. have gone so far down the path of deception that he names his most recent spending bill the “Inflation Reduction Act.” In that spirit, President Roosevelt could have called his Declaration of War a peace treaty.
No doubt that some of the problems was the Covid relief money that was being pumped into the economy as a bipartisan measure in the depths of the Pandemic. It would be fair to say that Washington overcompensated. That was not sufficient to trigger the major inflation that hit us this year.
Trump’s final stimulus money in December 2020 was potentially inflationary. I have written several commentaries expressing my opinion that it was a mistake. But even that would not – in and of itself – have triggered the kind of inflation that hit the American people in the economic gut.
In hindsight, it is obvious that Federal Reserve Bank did not move quickly enough to raise interest rates – even as the economic Magna for a major inflationary eruption was forming.
As Biden took office, the warning signs of inflation were already being seen. The only economically sound course of action was to limit federal spending. Instead, Biden and the Democrats poured an unprecedented trillions of dollars into the already simmering economy. They poured gasoline on the hot embers.
It was not as if they were not warned. Even prominent Democrat economists – such as Larry Summers and Steven Rattner — sounded the alarms. Major bankers were issuing warnings of a potential inflation.
Despite all that, Biden continued with his big spending programs – promising that there would be no inflation. (Did anyone take note that in 2021, Biden was saying there would be no inflation, and now he says that the inflation that was never to be is all Trump’s fault? Come on, man.)
Inflation was already surging when Russian President Putin invade Ukraine. Regardless, Biden then said that the inflation was CAUSED by the war. He repeated that over and over. I guess he forgot that he had previously laid the blame on Trump. The War was a contributor, but only a minor one.
When Biden finally conceded that there was an inflation going on, he assured us that it would be mild and short-lived – and that there would be no recession resulting from the unprecedented series of major interest rate increases by the Fed.
However, the inflation rose to levels not seen in 40 years – and the country did temporarily dip into a recession as traditionally defined. To that reality, Biden changed the definition – saying it was not a recession because of the low unemployment. (Incidentally, that was something the Fed was trying to fix with those interest rate increases. The Fed has been trying to increase the unemployment rate even as Biden was on a jobs growth policy path.)
Biden is now taking a victory lap over the fact that gas prices are dropping. In fact, they have reached a pre-Ukraine War level. But the War is still going on and so is inflation. If it was caused by the War, why are gas prices dropping? And remember, gas prices reaching the pre-War level is no great news. The inflation was surging before the War — and largely because of Biden’s humongous spending from day one of his administration.
What Biden needed to do was to at least defer his grandiose spending proposals. It likely would have mitigated the inflationary pressures – and made the initial rate increases by the Fed much more effective.
Trump should not have sent out those December 2020 stimulus checks. The Fed should have acted sooner. But those are minor contributors to the inflation compared to Biden’s spending. As often as he was warned about the prospect of a major inflation, Biden doubled-downed … triple-downed … quadruple-downed … on spending.
We would not be experiencing a crushing inflation had Biden held back on the massive spending – putting trillions of dollars into an economy that needed fewer dollars in circulation. Shove aside all the self-serving political rhetoric, and the one thing that is very clear.
We are suffering under BIDEN’S INFLATION … period.
So, there ‘tis.