We support our Publishers and Content Creators. You can view this story on their website by CLICKING HERE.
Welcome to Part II of my lengthy look at Joe Biden’s economic blundering. Rather than give you No-Doz, I’ll start with this leftover from yesterday that can’t be missed, especially for its usefulness as a segue to tomorrow. That’s when the Bureau of Labor Statistics will release the consumer-price index report for April, which is the key metric for inflation. In March, it rose 8.5% year-on-year, and analysts are expecting another result in the 8% range for April as well. That will make for a very bad news day for Joe Biden and especially for Jen Psaki, who will have to explain away again the entrenched inflation that has kept increasing now for more than a full year.
Yesterday, Psaki got challenged a number of times about inflation, and the RNC carved out this soundbite from the last answer she gave. The full answer provides more context, but it’s even less defensible:
PSAKI: “I don’t think anyone could’ve predicted a year ago” that inflation would soar to record highs.
…even liberal economists predicted it. pic.twitter.com/R8MrWHCc1i
— RNC Research (@RNCResearch) May 9, 2022
Q Yeah, as we look ahead to tomorrow’s inflation speech, let me ask you to look back at some of the warnings that were issued last year by Summers and Rattner and so on. In retrospect, were they right that some of the government policies were going to lead to inflation?
MS. PSAKI: I wouldn’t say we agreed with them then, and we don’t agree with them now.
I would note that as a relates to actions like the American Rescue Plan, the alternative to not putting in place and advocating for the American Rescue Plan would have been the economy continuing to spiral. Right? We would — we were providing assistance and relief in the form of checks to people who needed that assistance at the time.
That package also helped fund and prepare for a fight against COVID.
It helped keep schools open. One hundred percent of schools are open today, in large part because of the American Rescue Plan.
It helped states and localities support and keep teacher keep — keep police, keep local authorities, keep local governments open at a time where that was in question.
So we know, if we look at the recent inflation data, a large — depending on which data you look at, two thirds to even 70 percent of inflation data is a result of energy prices.
A large part of that is the result — and Chairman Powell has spoken to this and Secretary — Secretary Yellen has also spoken to this — is a result of President Putin’s invasion of Ukraine and the impact on the goual [sic] — global energy markets. Those are all steps and impacts that I don’t think anyone could have predicted a year ago.
Simply put, that’s utter nonsense. Joe Biden came into office promising to restrict domestic production of oil and natural gas and signed an executive order on Day One (EO 13990) to accomplish it. Not only could “anyone have predicted” that the price of oil and gasoline would rapidly rise as supply shrank and demand increased, no one would have predicted otherwise.
And in fact, even without the pressure of rapid increases in energy costs, multiple warnings went out at the time Biden took office of inflationary pressures. As the questioner notes, both Larry Summers and Steve Rattner went public with warnings of inflation before Biden pushed for passage of his $1.9 trillion porkfest American Rescue Plan. Contra Psaki, the White House not only knew about those predictions, they actively scoffed at Summers as a doomsayer for issuing them.
For the record, this is what Summers predicted from the COVID-19 stimulus bill:
First, while there are enormous uncertainties, there is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability. This will be manageable if monetary and fiscal policy can be rapidly adjusted to address the problem. But given the commitments the Fed has made, administration officials’ dismissal of even the possibility of inflation, and the difficulties in mobilizing congressional support for tax increases or spending cuts, there is the risk of inflation expectations rising sharply.
And this is what we got, starting in March 2021:
Biden’s bill produced immediate inflation above the Fed’s 2% tolerance limit, and it hasn’t looked back ever since. And this is what we got in gasoline prices at the pump, too (the X-axis is March 2002 to March 2022):
Note well that gas-pump prices as well as overall inflation began looong before Vladimir Putin’s invasion of Ukraine. The average gas price when Biden took office was $2.464 per gallon. and it was $3.624 when Putin invaded Ukraine — an increase of 47% in a single year. The increase since the invasion (now at $4.428 per gallon) amounts to a 22% increase from that point. Overall, gas prices have gone up 79% in Biden’s term, thanks to his fumbling away the economic and strategic advantages of scalable and elastic domestic supply of oil and natural gas.
Finally, while I get that this White House is desperate to avoid accountability, this answer really should be considered a break-glass option. Do they really want to pose Biden as though he’s been gobsmacked by inflation, rather than portraying him as in control of events? It’s a very strange look, and it’s only going to get worse as long as Biden and Psaki keep trying to pass the buck. Excuse me, the buck-twenty-five these days.