The US annual inflation rate hit a fresh 40-year high of 7.9% in February, and economists anticipate that it will most likely top 8% in March because of fallout from Russia’s invasion of Ukraine. If Americans were to believe President Joe Biden and other prominent Democrats’ prepared remarks, higher consumer and producer prices were absent throughout the economy before the war in Eastern Europe. As a result of these gaslighting tactics, consumers might have to endure more of the “Putin’s price hike” rhetoric heading into November’s midterm elections.
Democrats Gaslight America on Inflation
Speaking at the House Democratic Caucus Issues Conference on March 11, Biden rejected the notion that he is to blame for inflation and skyrocketing gasoline prices, choosing to scapegoat President Vladimir Putin and the Ukraine-Russia conflict. “Make no mistake, inflation is largely the fault of Putin,” he said. “Democrats didn’t cause this problem. Vladimir Putin did.”
The president explained that higher gas prices are due to the invasion, not because he stopped the Keystone XL pipeline or adopted a series of other anti-oil and gas policies. He also dismissed suggestions that the federal government approving trillions of dollars in new spending contributed significantly to the present inflationary environment.
“I’m sick of this stuff,” Biden barked. “The American people think the reason for inflation is the government spending more money. Simply not true.”
At a separate news conference at the Democratic retreat in Philadelphia, PA, House Speaker Nancy Pelosi (D-CA) echoed the president’s sentiments. Flanked by Representatives Steny Hoyer (D-MD) and Jim Clyburn (D-SC), Pelosi purported that more government spending “is not inflationary.”
“When we’re having this discussion, it’s important to dispel some of those who say, well it’s the government spending. No, it isn’t,” she argued. “The government spending is doing the exact reverse, reducing the national debt. It is not inflationary.”
Econ 101: The Reality
With several months until the 2022 midterm elections, the axis of leftists – the Biden administration, congressional Democrats, and mainstream media – will parrot the line “Putin’s price hike.” They will insist that inflation was either non-existent or easing before the Kremlin chose to invade its western neighbor. But the receipts are openly available to anyone looking to engage in reality and not fantasy.
First, on the topic of enduring pain at the pump, gasoline had been steadily rising throughout the president’s first year in office. Today, the national average of a gallon of gasoline is $4.325. A month ago, it was $3.488. Last year, it was $2.859. This is a dramatic jump whatever timeline you are using.
Second, when it comes to price inflation, the talk of the Swamp for so long was that a higher consumer price index (CPI) would not happen, which quickly changed to the forecast that this environment was transitory. Now the concession, from Treasury Secretary Janet Yellen to Fed Chair Jerome Powell, is that red-hot inflation will linger for longer. Observing the monthly Bureau of Labor Statistics (BLS) data each month has been a terrifying prospect for low- and middle-income Americans. Indeed, the latest February report showed broad-based growth before the invasion, leaving the consensus of an earth-shattering bloodbath in March. Bidenflation became a term for a reason.
So, who is to blame? Put simply, everyone and everything.
Biden, Democrats, and Republicans supporting multi-trillion-dollar budgets and spending bills without any apprehension of the impact of the federal deficit and national debt is a considerable factor. The Federal Reserve producing more than a third of all US dollars ever created in the nation’s history by monetizing the debt and engaging in quantitative easing are other significant components. Even with a combination of rate hikes, the end of asset purchases, and a potential shrinking of the balance sheet, monetary policy is still highly accommodative, resulting in surging inflation then, now, and in the near future.
The ruling class often confuses the two terms – price inflation and monetary inflation – out of ignorance or mendacity. But they are deeply connected. When the central bank expands the country’s quantity of money by running the printing press, as it did during the pandemic, this behavior will trigger soaring prices, which is what the United States and the world are experiencing today.
As the great economic writer Henry Hazlitt wrote in 1964:
“Diluting the money supply with paper is the moral equivalent of diluting the milk supply with water. Notwithstanding all the pious pretenses of governments that inflation is some evil visitation from without, inflation is practically always the result of deliberate governmental policy.”
Outside of Washington, the global supply chain crisis, the Ukraine-Russia war, and a reopening of the international economy have eroded inventories, disrupted worldwide trade flows, and made production efforts inferior to overall demand volumes across the globe. These developments have applied intense pressure on prices. It could take years before conditions normalize, further weighing on the present inflationary environment.
Bidenomics 101: Thou Shalt Not Blame Biden
Last year, when gasoline prices enjoyed a two-cent reprieve for a week, the Democrats proclaimed that Bidenomics was the source of this success because the president tapped 50 million barrels from the domestic strategic reserves. However, now that gas prices have soared to obscene levels, it is everybody else’s fault except the administration’s policies, be it Big Oil or Putin. Ostensibly, the first rule of Bidenomics 101 is you do not talk about bad things connected to Biden. The second rule is you only talk about good things connected to the president.
~ Read more from Andrew Moran.