What’s She Yellen About Inflation?
Our nation’s treasury secretary seems as clueless and feckless as Joe Biden.
Inflation in the U.S. hit 8.6% in June, the highest since 1981, reflecting higher costs for food (up 10.1% since last year), fuel (62%), shelter (5.5%), and everything else. Worse, it’s accelerating. The monthly inflation rate of 1% was far ahead of the 0.3% rate in April. In addition, income-adjusted earnings for workers fell 3% from the previous year. In short, it’s hitting the vast majority of Americans. Hard.
Yet it was just a year ago when Treasury Secretary Janet Yellen told us this inflation was “transitory” and not something to worry about. These days, try spinning that “transitory” yarn to anyone trying to keep gas in the car, food on the table, or rent up to date.
Yellen has finally begun to admit that she was wrong about downplaying inflation, saying recently, “There have been unanticipated and large shocks to the economy — the boosted energy and food prices and supply bottlenecks that have affected our economy badly — that at the time I didn’t fully understand.”
Naturally, though, she blamed these “shocks” on COVID-19 and Russia’s invasion of Ukraine, while giving the Biden administration a free pass on its reckless, ruinous spending and “America last” fossil fuel policies. Blame-shifting is the standard line for Joe Biden and his administration.
As Mark Alexander wrote in March, when Biden was first trying to blame Putin for inflation: “Regarding Biden’s so-called ‘American Rescue Plan,’ that was $1.9 trillion in taxpayer-funded graft to fill a $300 billion economic hole created by the ChiCom Virus pandemic. The remaining $1.6 trillion is indisputably a major factor in the inflation now crushing family budgets.”
Not everyone is buying Team Biden’s snake oil, though, and that includes former Obama economic advisor Lawrence Summers, who offered up a dose of reality this week in a report he coauthored. Summers thinks inflation is actually much closer to the levels experienced during the Carter administration.
As The Washington Free Beacon reports: “At the start of Biden’s presidency, Summers warned that the $2 trillion American Rescue Plan was far too large and could cause inflation. A study from economists at the San Francisco Federal Reserve vindicated Summers, finding that COVID stimulus resulted in roughly 3 additional points of inflation during Biden’s first year in office.”
Steve Rattner, another former Obama economic advisor, had this to say: “We’re all paying the price for having overstimulated this economy during the pandemic and putting too much money into people’s pockets, which created a lot of this inflation.”
Ouch. But, hey, the truth hurts.
If Yellen could just admit that the Biden administration is largely to blame for this skyrocketing inflation, maybe we could begin to figure a way out of this mess. But instead of talking about concrete, real-world solutions, she recently launched into this bizarre non sequitur: “The critical thing is that we become more dependent on the wind and the sun that are not subject to geopolitical influences and passing clean energy credits that will boost non renewables is really, really critical to addressing climate change and our energy costs for households.”
Wind and the sun? Clean energy credits? That’s her plan for fighting inflation? And what about the medium term? How about the immediate term when the rent is due? How is the wind or the sun going to help anyone?
No worries. Yellen did offer the American people some hope during her testimony in Congress last week. After admitting that inflation was worse than she had anticipated, she concluded, “I very much hope that it will be coming down now.”
She very much hopes. Don’t we all? But hope is not a policy. How about someone in the Biden administration stepping up and doing something about it, or even just taking the first step and admitting we have a problem so Americans know their leaders get it?
We all know they won’t because the things needed to reduce inflation run counter to everything Democrats stand for.
While Janet Yellen dreams of an American future powered by wind and sun, today’s Americans are divided and pessimistic about inflation and food shortages. According to a Wall Street Journal-NORC poll: “Americans are in a sour mood and registering some of the highest levels of economic dissatisfaction in years. The pessimism extended beyond the current economy to include doubts about the nation’s political system, its role as a global leader and its ability to help most people achieve the American dream.”
During these challenging times, we don’t necessarily expect our political leaders to fix everything overnight, but is it too much to ask that they at least recognize our current plight?
Earlier this week, just days after her mea culpa for having misread the long-term threat of inflation, the treasury secretary made another bold prediction: “There’s nothing to suggest that there’s a recession in the works.”
We’ll see about that. Every single business leader in a recent survey disagrees.
While we’re all making predictions, we’ll offer this one: Based on what we’ve seen and heard from Joe Biden and Janet Yellen during the past year, fewer and fewer Americans trust what they have to say about anything.
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