Biden is finally getting honest about inflation

It’s not every day that politicians admit they made a mistake. So it was refreshing — and overdue — to hear Treasury Secretary Janet Yellen say on Tuesday on CNN that “I was wrong” about the path inflation would take. Last summer, Yellen was one of many economists and White House officials downplaying inflation as a “small risk” to the economy. It’s now clear just how mistaken they were. Inflation has been at a 40year high for months, and there is little sign of relief on sky-high gas, food or rent prices.

Being honest with the public about inflation won’t magically bring prices down, but it helps to restore some credibility to the White House on the No. 1 issue on most people’s minds. It shows some empathy — and, we hope, some lessons learned. It was clearly unwise of President Joe Biden to brush off rising inflation for so long and then to try to blame greedy corporations, among others, for the problem. Presidents don’t have nearly as much control over the economy as people think, but Biden should have stepped up and addressed inflation much sooner than he and his team did.

Biden now is saying whenever he can that his “top priority” is to bring down inflation and avert a recession. But it was a smart move to meet publicly with Federal Reserve Chair Jerome Powell and remind the country that the central bank, not the White House, has the best tools to combat rising prices by hiking interest rates and pulling back other supports for markets.

There will be pain. Lowering inflation will require slowing the economy. The housing market is an early warning sign of what will likely play out in many industries as buyers grow more picky and sellers are increasingly forced to cut prices. Russia’s war in Ukraine and ongoing hiccups in the supply chain are exacerbating the problems, especially for gas and food.

Biden is not without tools of his own. He pledged this week in a Wall Street Journal opinion piece to “take every practical step to make things more affordable for families.” Unfortunately, nearly all the ideas he mentioned — clean energy, infrastructure, building more homes — would take years to have an impact.

In hindsight, his $1.9 trillion rescue package in March 2021 was too large. He can’t correct that now, but he needs to make good choices. In the short-term, that means reducing or eliminating some of the tariffs President Donald Trump put in place, speeding up legal immigration to help get more workers into the economy, and pursuing a comprehensive energy policy that includes domestic production. Creating conditions for nations such as Venezuela to export more oil would also be useful. So would abandoning plans to forgive $10,000 of student loan debt to so many well-off Americans.

Biden is finally getting more honest about the inflation problem. Now, he needs to be realistic about the best short-term solutions.