Blame game

If you want to know what it means to add insult to injury, look no further than Treasury Secretary Janet Yellen. In a recent late-night interview, she blamed inflation on consumers spending too much. Not only was Yellen complicit in creating inflation, but now she has the impudence to blame the American people who are suffering from her disastrous decisions.

Yellen asserted that everyone wanted to buy “grills and office furniture” and computers for working at home during the pandemic. There is certainly some truth to that part of her narrative, but citing this as the root cause of inflation is a bridge too far.

When Biden was inaugurated, the consumer price index (CPI)—a broad gauge of prices used to measure inflation—was growing at a 1.4 percent annual rate. Within a year and a half, however, the CPI was growing at a 1.3 percent monthly rate. Prices were rising in a single month about as fast as they rose in the entire year before Biden took office.

And those increases have been widespread, not limited to grills and office furniture.

The idea that consumers cause inflation does not even pass the smell test. Consumer preferences are constantly changing as the marketplace changes, with new innovations and a dynamic selection of products and services. This did not magically start when Biden was elected.

If not consumers, then what causes inflation? Government. The Treasury spends much more than it collects in taxes, and the Federal Reserve creates the money needed to cover the shortfall. That devalues the dollar, which in turn increases the number of dollars consumers and businesses alike need to purchase anything and everything.

This is why prices everywhere rise from inflation. It’s not that things are more expensive; it’s that the dollar is worth less than before.

Consumers do not have the ability to print money. Only the federal government can do that. This is why only the government can create inflation. Yellen’s assertion that consumers are to blame could not be further from the truth nor more insulting.

As an accomplice in the scheme of inflation, she rubs salt in the wound by casting blame instead of looking in a mirror and giving a mea culpa.