Haar: Dems must fight GOP’s fake ‘Bidenflation’ charge
It wasn’t hard to predict the reaction from Republicans late Thursday, after a report from the American Farm Bureau Federation declared the price of Thanksgiving dinner has jumped by 14 percent this year.
“Be prepared to pay more this holiday season because of Bidenflation,” the Republican National Committee tweeted.
It’s a focused fusillade these days from Republicans, a coordinated, nationwide effort now that inflation is rising by at least double and maybe three times what we’d like to see, depending on how we look at it. Eyeing a chance for gains in Congress next November, the GOP identified a sure-fire issue, a convenient trigger in the $1.9 trillion American Rescue Plan of 2021 (ARP) and a ready villain: President Joe Biden.
It’s a focused fusillade, a surefire issue — and a big, fat lie. Not an error, not an exaggeration. A screaming fib, weaned on ideology and glorified by an angry base of followers who see bright reminders of inflation in gasoline signs and cannot, or will not, see a truth deeper than “Bidenflation.”
In fact, this round of inflation has its cause in the pandemic recession: the steps both White House administrations and the Federal Reserve in 2020 and 2021, had to take to keep the economy moving; and even more so, the bottlenecks caused by a global shutdown with plummeting prices, followed by pent-up demand for goods amid a mass migration from big cities to smaller ones.
So the question is, why are the Democrats, from Biden on down, letting the GOP hit this ball over the fence? That seems to be a political mistake by th Dems.
“The strategy is, solve the problem, not talk about it,” Sen. Richard Blumenthal, the Connecticut Democrat who’s running for re-election in 2022, told me. “The best way to disprove the lie is to show that the rate of inflation can be tamed and reduced.”
Trust in a short bout of inflation
Biden and the other Dems are betting the spikes in food, gasoline, building materials, apartment rents, used cars and other non-luxury items will flatten out within a few months, well before the election. The idea is to clear up the bottlenecks as quickly as possible and give people the support they need, such as child care, to go back to work.
For example, rents are a huge chunk of the rising consumer price index as prices landlords charge have been artificially pumped up by the long eviction moratorium, which cut the amount of available housing. That’s returning to normal now.
On one level, trusting that the price spikes will end soon makes sense for Democrats.
It’s true that the signs point to a quick end because this round was not the result of the normal, long buildup of pressures — it was caused by the COVID-induced stop and restart. Economist Dean Baker of the Center for Economic and Policy Research, a left-leaning Washington, D.C. think tank, argued in a blog post Wednesday that not only is the ARP not to blame for overheating the economy, but if anything, “our problem may be too little demand rather than too much demand.”
Psychology also fuels typical, long-term inflation of the sort the GOP is blaming on Biden. “The expectation of higher prices changes behavior” — as consumers rush out to buy ahead of price increases, said Fred McKinney, a Trumbull economist, principal at BJM Solutions and emeritus professor at Quinippiac University
But he added, “I do think we’re not there yet.” The reason: We’re seeing shortages of goods and services more than historically high spending when we average 2020 and 2021.
“This is something that has the hallmarks of a temporary swing,” McKinney said.
Democrats need to step it up
We all hope Baker and McKinney are right. Both pointed out that the 10-year bond market agrees with them, with low interest rates that further erode arguments about lasting inflation.
Either way, it’s still a needless political risk for Dems to take it on the chin. Inflation is tough to predict (look up the 1970s) and even if this price rise does stick around, it will not have been Biden’s fault. But it will be too late to say that next summer.
Trouble is, walking voters through the mechanics of inflation, that’s a lot harder than name-calling. “When you’re explaining, you’re losing,” one Connecticut Democrat operative said to me.
Or, as U.S. Rep Joe Courtney put it, “Economics is always a
bit dense on the campaign trail.”
Courtney and Blumenthal both said considering the shock of a sudden economic collapse at a 33-percent annual rate, the U.S. is doing as well as can be expected — though certainly not well enough.
That puts the Dems in an awkward position as the pummeling from the GOP demands a response. “You can’t do it by just sort of dismissing it,” Courtney warned, “because people are feeling it.”
He well knows that former President George H.W. Bush lost the White House in 1992 by insisting — correctly, as it turned out — that the recession was over as Americans suffered.
But Courtney added, “The administration and members of Congress need to get more involved in this discussion. It’s a bit of a vacuum.”
A vacuum that’s going to suck Dems out of Congress if they’re not more aggressive.
The pathetic irony here is that Republicans might actually have a good story to tell. Maybe all this social spending the Dems are pushing, including the $2 trillion Build Back Better plan the House passed Friday morning, is too much for the government to take on. Lying about the cause of inflation should hurt the GOP narrative, not help it, if the Dems keep their eyes on he ball.
Trump’s tab: $3.5 trillion
Blumenthal is always up for an attack when he sees a perceived wrong. “This inflation was caused by the Trump administration. The bottlenecks that we’re seeing now in the supply chain are directly the result of Trump administration failures and inaction,” he said.
Yeah, that’s it. More of that. How about rolling out the “Trumpflation” charge?
The facts support a powerful retort to the Republicans’ blame game. Even if this is traditional inflation — too much money chasing too few goods and services, driving up prices and driving down the value of money — the imbalances started before Biden took the oath.
Congress authorized, and former President Donald Trump signed, $3.5 trillion in pandemic relief in 2020. The Federal Reserve,
America’s central bank, stepped up its buying of trillions more in debt to pay for government programs — in a word, printing money — early on.
As McKinney pointed out, the money supply, a traditional measure of inflation pressure, especially by conservatives, grew far more in 2020 than it has in 2021.
All the while, the temporary drop in households’ and businesses’ spending on goods and services created a powder keg of demand that a wounded global supply chain couldn’t meet.
‘A price well worth paying’
Biden and the Dems, without GOP votes, added the $1.9 trillion in the American Rescue Plan in March — money to shore up cities and states, and families in the form of stimulus checks at a time when unemployment was still high.
Did the ARP add about $400 billion on stuff like education, health, child care and transportation that Republicans called wasteful? Yeah, but to hang inflation on that bill alone is wrong, or worse, especially since a lot of that money hasn’t even been spent yet.
“In the scheme of things, I think a short burst of inflation was a price well worth paying for a good economic bounce back and getting the unemployment rate to a relatively low level,” Baker said in an emailed comment about the politics of these price hikes.
Opponents of all this spending also want to argue that it will drive up government debt, another inflation risk. Spare me. Trump promised to completely eliminate the $19 trillion in debt he inherited, only to see it explode to $27 trillion — fed not only by the pandemic but also a tax cut almost entirely for the rich and his complete failure to mind the store.
Knowing all this, Republicans last spring concocted the idea of Bidenflation, as U.S. News and others reported.
If the Democrats don’t fight back now, and inflation lurks longer than economists predict, we’ll get the government we deserve next fall — and the lying won’t stop.