Why won’t the White House take inflation seriously? Oliver Wiseman
https://spectatorworld.com/newsletter/why-wont-the-white-house-take-inflation-seriously/
Why won’t the White House take inflation seriously?
As has been clear for some time now, the fortunes of Joe Biden’s Build Back Better legislation and the state of the US economy are inextricably linked. With every bit of economic bad news, such as the worse-in-40-years inflation figures announced on Friday, the chances of the president securing fifty votes for his monster spending bill seem to fade.
Today, Biden will meet Joe Manchin and try to win the West Virginia holdout round. But one suspects nothing the president says to Manchin would be as persuasive as some good economic news — in particular, an easing of the price rises that Manchin has long said are a major reason why he cannot support the bill.
And for all that the Biden White House now claims to take the inflation threat seriously, one cannot help but feel the administration basically views the problem as one of messaging and spin, rather than anything more serious. Consider, for example, the insincere way in which Build Back Better has been rebranded as an urgently needed inflation-busting measure. The economic picture is radically different to when Build Back Better was first introduced. And yet we are supposed to believe that the legislation remains the perfect set of measures for the moment.
The White House has officially dropped talk of “transitory” inflation, but they clearly still think of it as a temporary problem. On Friday, Biden called price rises a “real bump in the road.”
Biden has assembled a handful of inflation-busting measures, but they feel designed so that he has an answer to the inflation question rather than as an earnest attempt to bring prices down. A government that was serious about the inflation threat would take an all-of-government approach. It would decide that now was not the time to double tariffs on lumber, for instance.
Rather than actually tackling inflation, officials are more interested in explaining why those prices aren’t the full story. Biden chief of staff Ron Klain decided that the best response was a flip chart explaining that everything was actually great. It is one thing to tout your economic achievements, it is another to deny the existence of any problems. On inflation, the White House too often finds itself telling voters not to believe their lying eyes.
To some economists, frustration among Americans at the state of the economy is a head-scratcher. GDP is surging, why aren’t people feeling better, they ask themselves.
But as the New York Times’s David Leonhardt explained on Friday, this really isn’t as much of a paradox as these economists seem to think. In his blunt assessment, “Americans think the economy is in rough shape because the economy is in rough shape.”
As Obama economic adviser Jason Furman told the Washington Post recently, “The typical family is spending an extra $4,000 this year because of excess inflation. It does not seem like much of a mystery why people are upset when they have to spend thousands of additional dollars more because of inflation.”
Not long ago, Klain called inflation a “quality problem.” He has learned not to say something like that again in public. But one can’t help but feel that, privately at least, that is still the White House view.
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