You know inflation is a problem when it gets harder to find something for $1 at Dollar Tree stores. And that’s exactly what’s happening as the discount chain announced that many of its goods would carry a price of up to $1.50.
There’s been more bad news on the inflation front this week, so, naturally, Biden is looking for someone or something else to blame – other than his own economic policies.
As soon as Biden conjured up his reckless $1.9 trillion “rescue” plan, economists left and right said that pumping that much deficit-financed spending into a fast-growing economy risked sparking an inflationary spiral, to which team Biden said “nonsense.”
When prices did spike in the spring, Biden insisted that “the overwhelming consensus is it’s going to pop up a little bit and then go back down.”
That didn’t happen. This week, Federal Reserve Board Chairman Jerome Powell, who’d previously dismissed inflation fears, said price increases have “been larger and longer-lasting than anticipated,” and that this will “likely remain so in coming months before moderating.” The Fed now predicts that inflation this year will be 4.2%, up from its June forecast of 3.4%.
Also this week, the London-based research firm Capital Economics said that the U.S. may be heading into an “era of higher inflation.”
And Biden’s top economic adviser, Jared Bernstein, said he “believes we might see elevated inflation into the middle of next year,” according to Fox Business. Bernstein had been the most vocal in denying that Biden’s $1.9 trillion stimulus would trigger inflation.
Meanwhile, the Daily Caller reports that “oil prices have surged around the world in recent weeks, which will lead to even higher inflation, according to industry experts.”
The National Association of Business Economists sharply raised its fourth-quarter inflation forecast to 5.1%, where it had previously pegged it at 2.8%.
The NABE also slashed its forecast for GDP growth this year from 6.7% to 5.6%, and the Atlanta Fed’s “GDP Nowcast” for Q3 has tumbled from over 7% down to 3.2% after economic data for the quarter started coming in much lower than expected.
The latest I&I/TIPP poll finds that more than two-thirds of the public (68%) believe that inflation will be a long-term problem. Not even Democrats believe Biden’s promises, with 59% saying it’s a long-term problem. Fewer than one in five (19%) of the public think it’s a short-term problem that will soon disappear.
So, what’s Biden’s response to all this? Is he rethinking his plan to pour more than $6 trillion additional spending onto the fire? Nope. Instead, he’s been trying to pin the blame for rising prices on “profiteers.”
“We’re also going after the bad actors and pandemic profiteers on our economy,” Biden said a couple of weeks ago.
“There’s lots of evidence that gas prices should be going down but they haven’t,” he said. “We’re taking a close look at that.”
Last week, the director of Biden’s National Economic Council, Brian Deese, said it was greedy meat middlemen who were to blame for rising food prices because they supposedly have the “power to squeeze both consumers and farmers and ranchers.”
“It raises a concern about pandemic profiteering, about companies that are driving price increases in a way that hurts consumers who are going to the grocery store,” Deese said.
This makes no sense, of course. If oil companies and meat producers could artificially boost prices, why would have all waited until now to do so?
But by creating such scapegoats, Biden hopes to deflect blame. So far, thankfully, the public isn’t buying this cheap trick. Polls show them overwhelmingly blaming Biden, with one finding that 79% say Biden’s economic policies are fueling inflation.
What’s more, most Americans (51%) want the government to cut spending to rein in inflation, according to the I&I/TIPP poll. Just 32% say the government should impose price controls. Tellingly, more Democrats are in favor of price controls than government spending (37% vs. 36%)
So, a slowing economy and rising prices. What does that remind you of?
The question is, how long will it take before Biden starts dusting off those old “Whip Inflation Now” buttons?
— Written by the I&I Editorial Board