Biden’s bizarre denials won’t help inflation

President Joe Biden is facing mounting criticism for inflation’s rise to its highest level since 1982. Unfortunately, the White House’s latest response is to blame greedy businesses.

Economists across the political spectrum are rightly calling out the White House for this foolishness. Even some within the White House are questioning this approach, The Post reports.

Inflation, which was relatively low for years, did not suddenly rise in recent months because businesses decided now was the ideal time to squeeze their customers. What actually happened is that demand soared for many products as the economy recovered. Often, there were not enough products to meet it, thanks to supply chain hiccups and labor shortages, so prices went up. In a surprise to many, consumers kept buying goods such as cars and washing machines even at higher prices.

Poll after poll shows Americans are upset about rising prices, but few people are curtailing their spending – so far. Many families were able to save money during the pandemic since they were not traveling or eating out as much. And the government’s generous stimulus checks, unemployment aid and enhanced tax credits also helped boost incomes, especially for lower-income households.

What the White House is really struggling with is an inflation messaging problem. Officials’ initial insistence that higher prices would be short-lived flopped as annual inflation has been above 5 percent since June.

The reality is that the best tool the nation has to fight inflation is the Federal Reserve raising interest rates. But the Fed operates independently from the White House. What Biden could do to help the Fed is to finally announce his nominees for the three open seats on the Federal Reserve’s Board of Governors.

On Friday, Biden did bring up the Fed’s role in tackling inflation: “I’m confident the Federal Reserve will act to achieve their dual goals of full employment and stable prices, and make sure the price increases do not become entrenched over the long term,” he said.

The next best strategy Biden adopt is to remind Americans that the pandemic is causing unusual strain on all of us and that the best remedy is to get people vaccinated and tested to get the virus under control. If the pandemic subsides, many of the supply chain and labor shortage issues should, too. Similarly, Americans are likely to ramp up their spending again on restaurants, travel and entertainment and curb their spending on goods. All of that should help cool inflation.

Biden grandly announced steps this month to crack down on the beef, poultry and pork industries for being too concentrated and using their power “to overcharge grocery stores and, ultimately, families.” The White House is also targeting other industries including health care and technology for more antitrust scrutiny.

There may be legitimate reasons to look carefully at these industries and how they operate, but pinning the current inflation problems on corporate greed is a flimsy argument that won’t stop Americans from beefing about inflation.