The Federal Reserve, Congress, and President Joe Biden are all complicit in the intensifying growth of price inflation, and all three should ratchet back their reckless policies that are causing it.
However, Biden should take the lead, as it is his own policy choices most likely turning his administration into the second coming of Jimmy Carter’s inflation and malaise.
The Bureau of Labor Statistics reported Thursday the annualized inflation rate in May was 7.2%, making it the third consecutive month in the annualized high single digits. Overall, prices have risen by 5% since last May, despite the coronavirus-caused slowdown for the first half of that time period.
Since Joe took office, CPI inflation is running at a 9% annual rate. #Bidenflation
— Phil Kerpen (@kerpen) June 10, 2021
What’s the harm? Even if it doesn’t work well or much at all, this QE stuff can’t hurt. Sure, it’s a lot of noise but that’s really the point; expectations-centered policy is all about managing expectations, so if the general public is treated to a spectacular show, the bigger the better, eagerly enthused by the entertainment all is expected to be well.
Or at least not as bad as otherwise (jobs saved, in other words).
For those who continue to see all this as real money printing, an historical dilemma allegedly alike only Weimar Germany, therefore what a week to be highlighting these issues. Inflation numbers in China (PPI) were reported earlier to have been the highest in almost thirteen years while the US CPI – as you no doubt heard yesterday – was like something out of the 1980’s; near literally.
These accelerating rates of change are exactly what critics have been warning about since the first American QE (less was made of Japan’s given its “deflationary mindset” had been entrenched for more than a decade beforehand). Reckless money printing would always, always lead to out-of-control monetary inflation and worse. Given not just May’s CPI but also April’s, this makes two straight months of rates unseen in America since George Bush – the father.
The Biden administration keeps insisting inflation is “transient,” but there are now real signs that inflation is here and possibly for the long haul.
Thursday’s consumer price index increase of 5 percent year-on-year — its highest level in 13 years — is the latest and most visible piece of evidence that this scourge is making a comeback.
And it’s not like we weren’t warned this was coming. If you grew up in the 1970s (as I did), you might recall long gas lines, consumer goods too expensive to afford, and something called Hamburger Helper — which people used to stretch ground beef because meat was so expensive. Inflation is a regressive tax that hits hardest at working-class and poor Americans.
Inflation can be caused because the Federal Reserve keeps interest rates too low for too long, or due to massive government expenditures on stuff like infrastructure and cradle-to-grave welfare payments.