Biden’s Phony Words Follow Inflation’s Phony Money - The American Spectator | USA News and Politics
Biden’s Phony Words Follow Inflation’s Phony Money

Joe Biden named inflation “my top domestic priority” on Tuesday. On Wednesday, the Bureau of Labor Statistics announced an annual consumer price index of 8.3 percent for April.

The president’s top domestic priority also ranks first in terms of his domestic failures. None of the president’s five immediate predecessors saw numbers as awful as Joe Biden does on what he points to as his No. 1 domestic issue.

Biden blamed not U.S. policies but “a once-in-a-century pandemic” and “Mr. Putin’s war in Ukraine” for rising consumer costs.

“And those two major contributors to inflation are both global in nature,” the president assured. “That’s why we’re seeing historic inflation in countries all over the world.”

But most countries see no such thing.

Vietnam experiences a 2.6 percent rate of inflation, Switzerland 2.5 percent, the United Arab Emirates 2.5 percent, Cameroon 2.4 percent, and Ecuador 2.9 percent.

Fed up with skyrocketing inflation? Join Daniel J. Flynn, David Catron, and American Spectator Executive Editor Wlady Pleszczynski for a special virtual conference about the “Biden price hike” on Wednesday, May 18, at noon EDT. Reserve your spot here!

How did these nations inoculate themselves from the twin maladies of coronavirus and Russia’s invasion of Ukraine? They didn’t. They dealt with them just as we did (only differently). Those countries did not trash their currencies just as we did. President Biden obfuscates — with political cunning or economic ignorance, one does not know — the alpha-and-omega role the money supply plays in devaluing currency.

Negative examples abroad also illustrate this reality. Argentina, which suffers through a 58 percent rate of inflation, devalued the peso to a far greater degree than the Federal Reserve devalued the dollar. Variation in inflation rates exist globally because variation exists in the monetary policies of central bankers.

The Federal Reserve’s current balance sheet amounts to 2.5 times its September 2019 size. Put another way, in a very short period the U.S. central bank created an enormous amount of money to fund the operations of the federal government. M1, the measurement of cash and assets easily convertible to cash, quintupled since February 2020. Look at the graph measuring M1. It takes a Jordanesque vertical leap, albeit in a Space Jam rather than a 1987 dunking-competition sense. The graph looks preposterous, unreal even. The trendline for the Fed’s balance sheet similarly leaps tall buildings in a single bound. Unleash pennies from heaven and the checkout line soon resembles hell.

Just as the diversity of national inflation rates discredits Biden’s argument, so does the conformity of inflation in economic sectors domestically. All 21 of the 21 categories that the Consumer Price Index examines show price rises. Nothing went down. Everything went up. When a flood of money, rather than a damming up of goods, explodes prices, one observes it across the board because money accounts for half of the value exchanged in just about all transactions.

The president may view the excuse-making as a way to avoid responsibility. It really conveys hopelessness. If forces in Russia and China beyond our control unleashed this explosion in prices, then American policymakers remain helpless to alleviate the problem.

Boogeymen such as “the Putin price hike” and “the Ultra-MAGA Agenda” did not cause inflation. They merely act as the president’s convenient scapegoats. A flood of money disproportionate to goods and productivity altered the value of the money in our pockets. This started before the Russians invaded Ukraine and even before the first case of coronavirus from China killed an American. It started with the massive creation of money, at the behest of reckless politicians of both parties looking to spend without taxing or borrowing or cutting, in September 2019.

Biden pointing that all this started more than a year before he assumed office might have acted as a way out, at least partially, for him. But to admit its true cause necessarily limits his ability to pursue the reckless spending on the fiscal side that made a nightmare of the monetary side. One cannot concede that loose money causes inflation without dooming legislation the likes of the Build Back Better Act.

Along with co-author Hunt Lawrence, this writer warned about traveling down this very dangerous path in August 2019. When the Fed started altering course, particularly in its intervention in the repo market in September 2019, we again warned of the dangers of quantitative easing in an expanding economy with low unemployment. Gimmicks in a strong economy lead to a lack of them in a weak economy. A cause (loose money) resulted in a predictable effect (higher prices). That the effect (higher prices) in Joe Biden’s narrative preceded the cause (the Putin price hike) should invalidate his argument for rational observers. And only in an indirect sense did his second cause (coronavirus), in so much as it pushed policymakers to boost the economy with funds it did not possess, result in inflation. (READ MORE from Daniel J. Flynn: Inflation Is America’s Payment for the Fed’s Printing Addiction)

The bad news for any officeholder attempting to obfuscate the reality of inflation either through excuse-making or data manipulation? It does not work. Even a skilled politician cannot convince a housewife that the $13.99 she now pays for a pound of roast beef does not make things worse for her than the bad old days a year ago when she paid $9.99 for the same meat. We feel inflation. We feel it belatedly in price hikes but we feel it painfully. The words on a teleprompter or the numbers on a monthly bureaucratic report do not mitigate that pain.

The rhetorical finessing and data legerdemain we will increasingly see on inflation between now and November stems from the same root as inflation. Dishonest words always follow dishonest money.

Daniel J. Flynn
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Daniel J. Flynn, a senior editor of The American Spectator, is the author of Cult City: Harvey Milk, Jim Jones, and 10 Days That Shook San Francisco (ISI Books, 2018), The War on Football (Regnery, 2013), Blue Collar Intellectuals (ISI Books, 2011), A Conservative History of the American Left (Crown Forum, 2008), Intellectual Morons (Crown Forum, 2004), and Why the Left Hates America (Prima Forum, 2002). His articles have appeared in the Los Angeles Times, Chicago Tribune, Boston Globe, New York Post, City Journal, National Review, and his own website,   
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