The Washington Post reports that Bill Clinton advised Joe Biden in May to take credit for a decline in inflation should it happen. Events this week confirm 46 heeded the counsel of 42.
“I want to say a word about news that came out today relative to the economy,” Biden told reporters Wednesday. “Actually, I just want to say a number: zero. Today we received news that our economy had zero percent inflation in the month of July — zero percent.”
He said “zero” several more times in case anyone missed the point and boasted that “the economic plan is working.”
It all sounded quite Clintonian.
Prices rose by 8.5 percent in July. We say this instead of zero because heretofore economists, journalists, and others citing the consumer price index generally referred to an overall figure arrived at by the annualized price movement of a series of categories. For example, July’s report noted that new vehicles increased by 10.4 percent, energy by 33 percent, and groceries by 13.1 percent. Based on such data, the Bureau of Labor Statistics (BLS) placed the rate at 8.5 percent from last July to this July.
Alongside gasoline, which does experience a downward price trend since June, the supermarket remains one of the big two barometers of inflation for ordinary Americans, who do not read monthly BLS reports but instead consult the daily report displayed at gas station digital flip signs and at supermarket cash registers.
All this deception converges on five words Biden uttered on Wednesday: “the economic plan is working.”
From the end of June to the end of July, inflation did remain stagnant. But to parse the report in such a way when year-over-year inflation for the last several months registers at a higher figure than any seen in the last four decades feels knavish.
After this White House redefined a recession as something decided upon in secret by eight professors in Cambridge, Massachusetts, instead of two straight quarters of economic contraction (unfortunate circumstances forced the Biden administration to alter reality), the verbal legerdemain on inflation should not surprise. (READ MORE from Daniel J. Flynn: Biden Opts to Redefine ‘Recession’ Rather Than Beat It)
Did Biden really require Clinton’s encouragement to take a victory lap on a loss?
The president and other powerful people believing his fibs may prove extremely damaging. The Federal Reserve, for instance, still boasts a balance sheet of $8.87 trillion — down only slightly from the $8.965 trillion peak earlier this year. Given the quantitative easing that more than doubled the Fed’s September 2019 holdings of $3.76 trillion in such a short period of time, the minuscule lowering of the balance sheet despite a pledge from Jerome Powell to do so does little to rein in inflation. If the Fed buys into Biden’s specious claims, then priming the pump again and decreasing the 2.25-to-2.5 feds funds rate — still low historically speaking despite recent hikes — might make sense to its board especially given our recessionary times. Pursuing that course makes our price problems — which largely stem from problems with money (an oversupply of it from our central bank in response to fiscal irresponsibility) — linger.
And all this deception converges on five words Biden uttered on Wednesday: “the economic plan is working.”
The economic plan looks more like a public relations plan. Categorizing it as “working” seems debatable. While many in the media refuse to say “recession” just as Biden instructed, all three nightly newscasts by the old-line networks on Wednesday tellingly pointed out in covering Biden’s rosy inflation claims that groceries experienced the highest price jump since 1979.
The PR effort involves redefining recession, cropping inflation statistics to such a narrow portion of the picture as to distort, and portraying stagflation as “building an economy from the bottom up and the middle out.”
The PR spin feels positively Clintonian. The stagflation economy, unfortunately, does not.