When Joe Biden took the oath of office in January 2021, the Consumer Price Index was 1.4 percent higher than it had been 12 months earlier. A month later, inflation had bumped up to 1.7 percent. By April, it was above 4 percent. It topped 5 percent in June, passed 6 percent in October, and hit 7 percent in December. By Jan. 20, 2022, Biden’s first anniversary as president, the year-over-year surge in prices had reached 7.5 percent.
More than a month later, on Feb. 24, Vladimir Putin launched the illegal Russian invasion of Ukraine. That was just seven weeks ago. Last Tuesday, the Bureau of Labor Statistics reported that inflation had risen yet again in March. Over the last 12 months, consumer prices have climbed 8.5 percent. Inflation is now at a 40-year high. As The Dispatch observed Thursday, “Muhammad Ali was still boxing the last time a CPI report was this bad.”
The White House blames the soaring cost of goods and services on the war in Ukraine. “Putin’s price hike,” the president and his spokespeople call it. But inflation has been accelerating throughout the Biden presidency and was already at the highest level in more than a generation when the Ukraine invasion began. Russia’s dictator is guilty of many crimes, but the dwindling purchasing power of the American dollar is one outrage that can’t be laid at his feet.
Like all presidents, Biden is glad to take credit for the economy’s good news — the drop in unemployment, the stock market boom, the surge in new business applications. But the White House takes no responsibility for bad economic news. The more Americans stress over rising prices, the more Team Biden has bent over backward to either minimize the problem or pin the blame elsewhere. The lame attempt to rebrand inflation as a “Putin price hike” is only the latest installment in an ongoing series.
When price hikes started to pinch last spring, the administration’s first instinct was to cheer them as evidence of a strengthening economy. Then it pivoted to claiming that “no serious economist” was worried that inflation would get worse. In October, the White House chief of staff endorsed the view that inflation was a “high class problem” that shouldn’t worry voters. Next the president insisted that price increases were “expected” and “temporary” and that there was no reason to worry about “persistent inflation.” In December came assurances that inflation had peaked and would soon start to fall.
At times, the administration has gone so far as to claim that the way to “ease inflationary pressures” was to pass the so-called Build Back Better bill so the government can spend trillions of additional dollars. At other times, it has endorsed the argument of class-warfare populists like Elizabeth Warren and Bernie Sanders that “corporate greed” causes inflation. Or it has contended that “the reason for the inflation,” as Biden put it in a February interview, is that “the supply chains were cut off.” Now, as war rages in Ukraine, it blames inflation on the Kremlin’s ruler.
The White House, when it seeks to evade accountability or downplay the severity of inflation, is as flexible as Simone Biles. But when it comes to halting the reckless government spending spree — the best anti-inflationary remedy in the federal dispensary — it remains as rigid as a Coldstream Guard.
From the earliest days of his presidency, Biden was warned that the massive new outlays he was pushing for, beginning with the $2 trillion American Rescue Plan, were likely to send consumer prices soaring. Larry Summers, the former Treasury secretary and Harvard president (and a lifelong Democrat), warned in a Washington Post column in February that so much additional spending was apt to “set off inflationary pressures of a kind we have not seen in a generation.” Summers continued to sound the alarm in the months that followed but was derided by the White House as “flat-out wrong.”
It was understandable, perhaps, that an administration under pressure from progressive Democrats, intent on all the progressive agenda items it could achieve by letting the economy continue to “run hot,” would be inclined to disregard Summers. Why listen to a Cassandra when other economists were reassuring Biden that inflation was nothing to worry about? After all, federal spending had been rising for years, under Republicans and Democrats alike, without unleashing inflation. Why shouldn’t that pattern continue?
But there was no comparison between the upward trend in government outlays pre-COVID and the explosion of spending unleashed by the pandemic in 2020. The federal budget skyrocketed from $4.4 trillion in 2019 to an unheard-of $6.5 trillion one year later — then to an even wilder $7.2 trillion in Biden’s first year as president. This was spending growth at an order of magnitude far beyond anything in Washington’s experience, all of it exacerbated by a Federal Reserve policy that kept interest rates at zero. The result was to unshackle the inflation monster that had been tamed in the 1980s. Prices started climbing in earnest. They show no sign of stopping.
The Biden White House was warned that this would happen. Almost at once the warnings began coming true. A wiser administration would have responded by altering its fiscal priorities. Biden and his people altered only their talking points.