February 27, 2022 - 9:00 pm
President Joe Biden’s blame shifting on inflation is a sight to behold. It’s even too much for some officials from past Democratic administrations.
Last year, Mr. Biden said the ongoing rise in inflation would be temporary. When NBC’s Lester Holt pressed him recently as to why the rise has continued, the president called Mr. Holt a “wise guy” and blamed the supply chain crisis.
Insults aside, Mr. Holt was right to press Mr. Biden. Inflation hit 7.5 percent in January, the highest figure in four decades.
The Biden administration’s response is attack businesses. The Department of Justice announced recently that it plans to investigate companies “who would exploit supply chain disruptions” to earn what the department calls “illicit” profits. The goal, the department says, is to keep companies from “overcharging customers under the guise of supply chain disruptions.”
As reason.com notes, Sens. Elizabeth Warren, D–Mass., and Bernie Sanders, I–Vt., have been very vocal in promoting the theory that corporate greed, and not questionable government action, drove inflation.
“The DOJ and FBI would rather launch a global investigation of ‘illicit’ supply chain profiteering than acknowledge the obvious and inevitable result when unprecedented fiscal and monetary stimulus combines with decades of protectionism and regulatory sclerosis,” Scott Lincicome, director of general economics and trade policy for the Cato Institute, told Reason.
It’s not just right-leaning economists crying foul. A year ago, former Clinton administration Treasury Secretary Larry Summers warned Mr. Biden’s coronavirus spending binge could lead to inflation “not seen in a generation.”
Steven Rattner, who served as counselor to the Treasury secretary in the Obama administration, echoed Summers in a recent The New York Times piece.
“Supply issues are by no means the root cause of our inflation,” Mr. Rattner wrote. “Blaming inflation on supply lines is like complaining about your sweater keeping you too warm after you’ve added several logs to the fireplace.”
Mr. Rattner said most of our supply problems have been “homegrown.”
“Americans have resumed spending freely, and along the way, they have been creating shortages akin to those in a shopping mall on Black Friday,” he wrote. “All that consumption has resulted from vast amounts of government rescue aid (including three rounds of stimulus checks) and substantial underspending by consumers during the lockdown phase.”
Companies that keep products on the shelves, despite the current chaos, deserve praise, not politically tinged threats from the feds.