Inflation Remains ‘Well Above Normal Levels’ Because Of Biden’s Economic Policies

Since President Biden Took Office, Prices For Food, Energy, Transportation, And Housing Have Increased At Staggering Rates

Since President Biden took office, inflation has increased 13.5%. (Bureau of Labor Statistics, Accessed 1/12/2023)

• Grocery (food at home) prices have increased 18.6%. (Bureau of Labor Statistics, Accessed 1/12/2023)

• Food away from home prices have increased 14.4%. (Bureau of Labor Statistics, Accessed 1/12/2023)

• Energy prices have increased 33.9%. (Bureau of Labor Statistics, Accessed 1/12/2023)

• Prices for fuel oil have increased 89.3%. (Bureau of Labor Statistics, Accessed 1/12/2023)

• Gasoline (all types) prices have increased 37.8%. (Bureau of Labor Statistics, Accessed 1/12/2023)

• Natural gas prices have increased 47.3%. (Bureau of Labor Statistics, Accessed 1/12/2023)

• Electricity prices have increased 21.0%. (Bureau of Labor Statistics, Accessed 1/12/2023)

• Rental prices for a primary residence have increased 11.9%. (Bureau of Labor Statistics, Accessed 1/12/2023)

• Prices for used cars and trucks have increased 26.2%. (Bureau of Labor Statistics, Accessed 1/12/2023)

• Prices for new vehicles have increased 18.1%. (Bureau of Labor Statistics, Accessed 1/12/2023)

• Furniture prices have increased 19.6%. (Bureau of Labor Statistics, Accessed 1/12/2023)

• Apparel prices have increased 5.8%. (Bureau of Labor Statistics, Accessed 1/12/2023)

• Airline fares have increased 33.7%. (Bureau of Labor Statistics, Accessed 1/12/2023)

Meanwhile, Americans Continue Giving Up More Of Their Paychecks To Inflation, With Year-On-Year Real Average Weekly Earnings Decreasing 3.1%

“Real average hourly earnings decreased 1.7 percent, seasonally adjusted, from December 2021 to December 2022. The change in real average hourly earnings combined with a decrease of 1.4 percent in the average workweek resulted in a 3.1-percent decrease in real average weekly earnings over this period.” (Bureau of Labor Statistics, Press Release, Accessed 1/12/2023)

‘Inflation Is Still Well Above Normal Levels’

“Inflation is still well above normal levels, and the economy remains vulnerable to shocks that could send prices back up.” (The Washington Post, 1/12/2023)

“Excluding volatile food and energy costs, so-called core prices rose 5.7% in December from a year earlier … Grocery prices rose 0.2% from November to December … [T]hose prices are up 11.8% from a year ago.” (The Associated Press, 1/12/2023)

• “[H]ousing costs continue to be a major driver of inflation, rising 7.5 percent over the last year, and accounting for more than half of the total increase in a measure known as “core inflation,” which strips out more volatile categories like food and energy. Specifically, rent climbed 0.8 percent in December, as it had the previous month. Other notable increases included household furnishings and operations (up 6.7 percent), medical care (up 4 percent) and new vehicles (up 5.9 percent).” (The Washington Post, 1/12/2023)

• “To spot areas of the economy where inflation may pose a longer-term problem, Fed officials have directed their attention to a narrow measure of inflation that focuses on services outside of the food, energy and housing markets, where price growth can be especially sticky and put more pressure on wages. These services include health care, education and hospitality. ‘It is the core services inflation, excluding shelter services, that just has shown no sense that it’s coming down,’ San Francisco Fed President Mary Daly said this week at an event with the Wall Street Journal. ‘And that historically [has] been persistent and very highly related to the progression of the labor market and wage growth.’” (The Washington Post, 1/12/2023)

REMINDER: Economists And Analysts Have Repeatedly Explained That President Biden’s Economic Policies Made Inflation WORSE

“Economists largely agree that the pandemic stimulus and other spending bills Mr. Biden signed over the past two years have added to inflation … But the president made clear [in November] that he does not see a need to change course when it comes to the economy. While he may seek common ground with Republicans on some fiscal matters, such as relatively mild cuts to government spending, he is unlikely to turn sharply to a more centrist economic policy like his Democratic predecessors did.” (“An Inflation-Driven Midterm Will Not Change Biden’s Economic Focus,” The New York Times, 11/10/2022)

“Democratic candidates in competitive Senate races this fall have spent little time on the trail or the airwaves touting the centerpiece provisions of their party’s $1.9 trillion economic rescue package … Economists generally agree that the stimulus spending contributed to accelerating inflation …” (“Democrats Spent $2 Trillion to Save the Economy. They Don’t Want to Talk About It.,” The New York Times, 10/16/2022)

Democrat Economists: ‘The Original Sin Was The $1.9 Trillion American Rescue Plan,’ ‘I’m Not Sure That We Would Have The Inflation … Without The Overwhelming Stimulus That Was Applied Well Into Recovery — During 2021,’ ‘The United States Has Had Much More Inflation Than Almost Any Other Advanced Economy In The World’ Because ‘The United States’ Stimulus [Spending] Is In A Category Of Its Own’

STEVEN RATTNER, Former Obama Administration Counselor to the Treasury Secretary: “This is Biden’s inflation and he needs to own it.” (Steve Rattner, @SteveRattner, Twitter, 3/10/2022)

• RATTNER: “Enough already about ‘transitory’ inflation…. How could an administration loaded with savvy political and economic hands have gotten this critical issue so wrong? They can’t say they weren’t warned — notably by Larry Summers, a former Treasury secretary and my former boss in the Obama administration, and less notably by many others, including me. We worried that shoveling an unprecedented amount of spending into an economy already on the road to recovery would mean too much money chasing too few goods.” (Steven Rattner, Op-Ed, “I Warned the Democrats About Inflation,” The New York Times, 11/16/2021)

• RATTNER: “The original sin was the $1.9 trillion American Rescue Plan, passed in March. The bill — almost completely unfunded — sought to counter the effects of the Covid pandemic by focusing on demand-side stimulus rather than on investment. That has contributed materially to today’s inflation levels.” (Steven Rattner, Op-Ed, “I Warned the Democrats About Inflation,” The New York Times, 11/16/2021)

LARRY SUMMERS: “I’m not sure that we would have the inflation if there had never been a pandemic and, even if there had been a pandemic, without the overwhelming stimulus that was applied well into recovery — during 2021.” (“Summers Says Pandemic Only Partly To Blame For Record Inflation,” The Harvard Gazette, 2/4/2022)

“‘The United States has had much more inflation than almost any other advanced economy in the world,’ said Jason Furman, an economist at Harvard University and former Obama administration economic adviser, who used comparable methodologies to look across areas and concluded that U.S. price increases have been consistently faster. The difference, he said, comes because ‘the United States’ stimulus is in a category of its own.’” (“Rapid Inflation Fuels Debate Over What’s to Blame: Pandemic or Policy,” The New York Times, 1/22/2022)

‘A Chorus Of Economists Point To Government Policies As A Big Part Of The Reason U.S. Inflation Is At A 40-Year High’

“At a moment when stubbornly rapid price gains are weighing on consumer confidence and creating a political liability for President Biden, White House officials have repeatedly blamed international forces for high inflation … But a chorus of economists point to government policies as a big part of the reason U.S. inflation is at a 40-year high. While they agree that prices are rising as a result of shutdowns and supply chain woes, they say that America’s decision to flood the economy with stimulus money helped to send consumer spending into overdrive, exacerbating those global trends.” (“Rapid Inflation Fuels Debate Over What’s to Blame: Pandemic or Policy,” The New York Times, 1/22/2022)

“Many economists supported protecting workers and businesses early in the pandemic, but some took issue with the size of the $1.9 trillion package last March under the Biden administration. They argued that sending households another round of stimulus, including $1,400 checks, further fueled demand when the economy was already healing. Consumer spending seemed to react: Retail sales, for instance, jumped after the checks went out. Adam Posen, president of the Peterson Institute for International Economics, said the U.S. government spent too much in too short a time in the first half of 2021.” (“Rapid Inflation Fuels Debate Over What’s to Blame: Pandemic or Policy,” The New York Times, 1/22/2022)

“[E]conomists are increasingly pointing to the scale and size of the $1.9 trillion American Rescue Plan — which Democrats passed less than two months after Biden came to office — as too big to fill the economy’s hole. This stimulus re-extended more generous unemployment benefits of $400 a week, gave many Americans another round of stimulus checks and expanded the Child Tax Credit, though it has since expired. It also strengthened nutritional assistance and school lunch programs. Many Democrats — except a rare few, such as Lawrence H. Summers, who served under Presidents Bill Clinton and Barack Obama — initially waved off concerns that the spending power of the package could overwhelm the economy and flame inflation. But over time, it became clear that the massive influx in cash that went straight to American households, plus billions more dollars pumped into the broader economy, overheated the recovery…. And as time goes on, an increasing number of economists concede that the American Rescue Plan was too big to fill the hole left by the coronavirus recession.” (“What To Know About Inflation: Rising Prices Hit In U.S., Around The World,” The Washington Post, 2/09/2022)

THE WALL STREET JOURNAL EDITORIAL BOARD: “Mr. Biden can blame Mr. Putin for many things, but not U.S. inflation. The root cause is homegrown: Two years of historically easy monetary policy, and explosive federal spending that fed economic demand even though the economy had long ago emerged from the pandemic recession.” (Editorial, “It’s Joe Biden’s Inflation,” The Wall Street Journal, 3/10/2022)

Even Far-Left Vox Media Agreed, ‘Biden’s American Rescue Plan Worsened Inflation’

“[T]he American Rescue Plan — the $1.9 trillion stimulus bill Democrats passed in March 2021 — may stand as [President Joe Biden’s] biggest achievement. But did it contribute to the country’s current inflationary mess? The massive spending law, which included $1,400 checks for each person in a family, generous expansions to unemployment insurance and child tax credit benefits, and hundreds of billions in aid to state and local governments, was intended to help people in need and stimulate economic demand, and it did. Some economists argue, though, that all this came at the cost of making inflation worse…. The American Rescue Plan was drafted with good intentions, but it caused real problems.” (“Biden’s American Rescue Plan Worsened Inflation. The Question Is How Much.,” Vox, 5/12/2022)

• “The case that the American Rescue Plan contributed to inflation has three parts: its size, its timing, and the details of its spending. … High inflation is now here, and the worse and more persistent inflation is, the more likely it is that the Fed will raise rates to get it under control, and cause a recession. … In retrospect, it seems that Democrats simply didn’t take this seriously enough back in early 2021. They wrongly concluded that a stimulus far in excess of what models said was necessary was the less risky option. They thought they were still in the ‘money printer go brrr’ era, where there was less pressure to be judicious about where that money was going — so instead of targeting help to those who needed it, they sent hundreds of billions of dollars to well-off Americans and states doing just fine, for political reasons.” (“Biden’s American Rescue Plan Worsened Inflation. The Question Is How Much.,” Vox, 5/12/2022)