Voters are correct: Biden is to blame for inflation

  

Category:  Op/Ed

Via:  gregtx  •  4 weeks ago  •  21 comments

By:   Liz Peek, Opinion Contributor (MSN)

Voters are correct: Biden is to blame for inflation
Ultimately, inflation is the result of too much money pursuing too few goods. That's what is happening now.

S E E D E D   C O N T E N T


Inflation is soaring, and voters blame President Biden.

A Morning Consult poll in late October showed 62 percent of registered voters believe Biden's policies are to blame for rising prices on everything from turkeys to gasoline to apartment rents. Guess what? They should.

Biden's fingerprints are all over the latest Consumer Price Index report, which showed prices in October rising 0.9 percent compared to a 0.2 percent increase in September. That was way worse than the consensus estimate of 0.6 percent.

If we annualize that October price increase, inflation is now running at almost 12 percent.

The Washington Post pointedly announced the dismal news from the Bureau of Labor Statistics: "Inflation climbs 6.2% in October, the largest increase in 30 years, amid supply chain backlogs."

Get it? It's all about supply chain problems. A complex pile-up of circumstances that Biden thinks most Americans are too dim to understand and over which the White House can exert zero control.

Liberals are hoping that Americans will buy that narrative; after all, not even Transportation Secretary Pete Buttigieg can be expected to disperse those ships stacked up off the Long Beach port or single-handedly find scarce lumber when it's gone missing.

Those supply chain problems persist, for sure. But when the main culprits driving inflation are energy (up 30 percent from last year), accelerating rents and ongoing worker shortages, sourcing difficulties are not the whole story.

Policy blunders perpetrated by the Biden White House have made a bad problem worse.

For instance, oil prices are higher for two reasons. First, U.S. production has declined by about two million barrels per day since 2019, even as demand has recovered from the COVID-19-induced downturn. Oil markets are global, so the fall-off in output would not necessarily jack prices up, but our declining output needs to be offset by an increase elsewhere.

Enter OPEC, which has not restored output to the level necessary to bring down prices, despite repeated pleas from Biden.

Meanwhile, Biden has done a lot to discourage a resurgence in U.S. drilling and production. He has cancelled pipelines, threatened oil and gas producers with higher taxes, taken promising acreage out of play, such as the Arctic Natural Wildlife Refuge, slow-walked leasing and new drilling permits and, most recently, imposed new methane-curbing rules that make drilling more expensive.

What sensible person would invest in the oilfield in the face of such unrelenting hostility? Drilling activity is up, but nowhere near where it should be at $82 per barrel oil.

Another boost to inflation came from housing. With "shelter" accounting for some 40 percent of the CPI, economists have warned that fast-rising home prices would eventually seep into higher inflation readings. In October, we saw this occur, with the increase in the cost of shelter accelerating to 0.5 percent from September, an annualized rise of 6 percent.

One reason home prices have been increasing at nearly 20 percent per year is that the Federal Reserve has continued to buy up $15 billion worth of mortgage-backed bonds each month, keeping mortgage rates artificially low. The result has been a booming market, driving home prices, and now rents, higher.

At long last, the Federal Reserve has announced it will begin to throttle back its bond-buying program, including the purchases of mortgage-backed bonds. Critics think the Fed is behind the curve, having seriously underestimated price pressures.

Biden does not control the Fed, but he has made no secret of his preference for the easy money policies that have helped prop up the economy, and the stock market. Fed Chair Jerome Powell's term ends in February; Biden has recently interviewed not only Powell but also Fed Governor Lael Brainard, a known dove and Obama appointee, for the position.

That these are the only two candidates he seems to be considering sends a clear signal. He will choose growth over stability, even if it means that inflation continues to accelerate. Unhappily, Powell is listening.

Finally, Biden has not only encouraged monetary excess, but has also endorsed big-spending packages that have put money in consumers' pockets but also kept workers on the sidelines. The biggest shortage we have in this country today is labor. The labor participation rate is mired at 61.6 percent, 1.7 percentage points below the level in February 2020.

Studies have shown that the slew of benefits contained in the Cares Act and subsequent relief bills, including incremental unemployment benefits, expanded child tax credits and rent moratoriums, have offered Americans up to $100,000 per year while not working. These payments may have been necessary early in our recovery from the pandemic, but no longer are needed.

A recent analysis of Biden's proposed Build Back Better bill shows the legislation could create even more disincentives to work, sidelining millions of Americans. This would drive the cost of everything even higher.

Ultimately, inflation is the result of too much money pursuing too few goods. That's what is happening now. Joe Biden is to blame for much of the problem; voters know it.

Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.


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GregTx
Sophomore Participates
1  seeder  GregTx    4 weeks ago
Biden's fingerprints are all over the latest Consumer Price Index report, which showed prices in October rising 0.9 percent compared to a 0.2 percent increase in September. That was way worse than the consensus estimate of 0.6 percent. If we annualize that October price increase, inflation is now running at almost 12 percent.
 
 
 
Tessylo
Professor Principal
2  Tessylo    4 weeks ago

"Voters Are Correct: Biden Is To Blame For Inflation"

No, he is not.  

 
 
 
Greg Jones
PhD Expert
2.1  Greg Jones  replied to  Tessylo @2    4 weeks ago

It's happening on Biden's watch, and everyone is rightfully blaming him for it.

Your dear "leader" is an abject failure. Tell us what he's done right

 
 
 
Texan1211
Professor Principal
2.1.1  Texan1211  replied to  Greg Jones @2.1    4 weeks ago
Tell us what he's done right

Well, if you are an illegal alien or support illegal aliens and wish them to come here whenever and however they want, then Biden's your man! His policies and failure to secure the border has resulted in record numbers of illegal aliens.

And if you like inflation and high prices, well, success!

 
 
 
XXJefferson51
Senior Guide
2.2  XXJefferson51  replied to  Tessylo @2    4 weeks ago

Yes, actually he is.  It’s all in his actions and policies. 

 
 
 
Texan1211
Professor Principal
3  Texan1211    4 weeks ago

Democrats must LOVE them some inflation, as they blindly continue to support the failed policies of the Biden/Harris Admin.

 
 
 
Perrie Halpern R.A.
Professor Principal
4  Perrie Halpern R.A.    4 weeks ago

Supply chain issues preceded Biden. These kinds of problems are years in the making and also due to the pandemic. 

 
 
 
GregTx
Sophomore Participates
4.1  seeder  GregTx  replied to  Perrie Halpern R.A. @4    4 weeks ago

Whether you think it's fair or not, which you seem not to, it's happening on Biden's watch and will be attributed to his administration. What do you think he has done or is doing to effectively mitigate these problems?

 
 
 
Ozzwald
Professor Quiet
4.1.1  Ozzwald  replied to  GregTx @4.1    4 weeks ago
Whether you think it's fair or not, which you seem not to, it's happening on Biden's watch and will be attributed to his administration.

Which is typical right wing thinking.  They were trying to blame Obama for the Bush recession for years. 

Don't blame the creator of the problem, blame whichever democrat happens to be around trying to deal with it.

 
 
 
Texan1211
Professor Principal
4.1.2  Texan1211  replied to  Ozzwald @4.1.1    4 weeks ago

Sitting Presidents always get the credit or blame for the economy.

People tend to vote their wallets. Something Democrats might start to acknowledge.

 
 
 
GregTx
Sophomore Participates
4.1.3  seeder  GregTx  replied to  Ozzwald @4.1.1    4 weeks ago

Didn't have anything to do with the basically non-existent recovery over the course of 8 years?

That's funny, didn't Obama pop up and claim credit for the surging economy under the Trump administration?

 
 
 
Ozzwald
Professor Quiet
4.1.4  Ozzwald  replied to  GregTx @4.1.3    4 weeks ago
That's funny, didn't Obama pop up and claim credit for the surging economy under the Trump administration?

Surging?  Really?

 
 
 
Texan1211
Professor Principal
4.1.5  Texan1211  replied to  Ozzwald @4.1.4    4 weeks ago

That is what he stated clearly!

 
 
 
GregTx
Sophomore Participates
4.1.6  seeder  GregTx  replied to  Ozzwald @4.1.4    4 weeks ago
 
 
 
Ozzwald
Professor Quiet
4.1.7  Ozzwald  replied to  GregTx @4.1.6    4 weeks ago
Yeah, really. Economists agree: Trump, not Obama, gets credit for economy | TheHill

So Trump is responsible for the condition of the economy when he left it?

 
 
 
Just Jim NC TttH
Senior Principal
4.1.8  Just Jim NC TttH  replied to  Ozzwald @4.1.7    4 weeks ago

Yep but he had a huge amount of help from China.

 
 
 
Ozzwald
Professor Quiet
4.1.9  Ozzwald  replied to  Just Jim NC TttH @4.1.8    4 weeks ago

Yep but he had a huge amount of help from China.

Trump allowed China to control our economy?  Isn't that treasonous?

 
 
 
Tessylo
Professor Principal
4.2  Tessylo  replied to  Perrie Halpern R.A. @4    4 weeks ago

No room for the truth here Perrie.  

 
 
 
Texan1211
Professor Principal
5  Texan1211    4 weeks ago

This is hilarious.

CNN just aired a story on inflation. They used some clips of Biden talking in July about how inflation was nothing to worry about, it was just a temporary blip.

He claimed that no "serious" economists were worried about inflation then.

Then they showed clips from his speech recently (I think it was from yesterday) of Biden showing concern for inflation.

Must be the same speechwriters advising him on picks for important positions.

 
 
 
Nowhere Man
Junior Participates
5.1  Nowhere Man  replied to  Texan1211 @5    4 weeks ago
This is hilarious.

Sound to me like he isn't in control of jack crap... his "Appointees" and hires are doing everything and anything they want and he only finds out afterwards.... {chuckle}

 
 
 
Dismayed Patriot
Professor Participates
6  Dismayed Patriot    4 weeks ago
" The labor participation rate is mired at 61.6 percent, 1.7 percentage points below the level in February 2020."

So 1.7% below pre-pandemic participation rates. Am I the only one who thinks that's rather mild considering almost 2 years of dealing with a massive outbreak of a potentially deadly virus?

“We are experiencing this sudden surge in inflation for two main reasons,” says Craig Kirsner, President of Stuart Estate Planning Wealth Advisors in Coconut Creek, Florida. “ First, for the past year and a half due to Covid hardly anyone was spending money. Now that the economy is back open, people are spending and traveling and, as such, there is a bottleneck with very high demand . Our system isn’t set up for this high demand level, so that causes inflation in the short term. Second, with interest rates lowered to almost zero since March of 2020, these low interest rates have spurred demand in housing which is experiencing a large backlog as well as adding to inflation worries.”

What you’re seeing is a simultaneous confluence of one-time occurrences that have both exposed economic weaknesses and created a vicious inflationary cycle.

It’s largely due to a perfect storm of supply chain disruption from Covid, government spending to fill the economic void and a synchronized global recovery driven by vaccine rollout and economies re-opening ,” says John P. Micklitsch, Chief Investment Officer at Ancora in Cleveland. “The pandemic is probably just the event that exposed over a decade of underinvestment in the global commodity supply chain and the vulnerability of ‘just-in-time’ inventories to this sort of supply shock.”

There is no evidence that, without Covid, we would be facing this “supply shock” induced inflation.

“The strained supply lines due to Covid paired with an increase in demand we are seeing now would be one of the main reasons for inflation at the moment,” says Derek S. Taddei, Relationship Manager,   401k   Specialist at HoyleCohen, LLC in Phoenix. Using language familiar to anyone who has taken an ECON101 class, Taddei calls this “a combination of Demand Pull and Cost Push inflationary pressures.”

A large portion of what we are experiencing in inflation is due to the deflation which we saw in 2020 during the Covid shutdowns ,” says Mike Windle, CEO at Custom Wealth Solutions in Plymouth, Michigan. “ As prices work to normalize, it is causing inflationary pressure . Add to that the pent-up demand caused by the Covid lockdowns; we are seeing prices rise quickly.”

I knew when I voted for Biden that he wasn't some ancient wizard capable of snapping his fingers and magically making Covid disappear or the effects it's had on our economy. The whiners and complainers bitching about him now are just sour grapes Monday morning quarterbacks.

 
 
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