The Biden Era of Greed? Democrats’ inflation excuses lead to inconvenient conclusions. James Freeman
No, this column’s headline is not about the latest art show featuring the works of Hunter Biden. This story is about the challenge for President Joe Biden and fellow Democrats in discussing inflation without mentioning its true causes. The politicians running Washington want consumers to believe that behind every price increase is a greedy capitalist.
The Journal’s Amara Omeokwe and Andrew Restuccia report that “Mr. Biden is racing to show the public that he is taking action to address rising prices and bottlenecks amid mounting anxiety among some of his advisers about political fallout heading into next year’s midterm elections.”
The political challenge for Mr. Biden is that his next and largest spending plan—the budget reconciliation monster passed by the House—will fuel inflation by encouraging demand for goods and services while discouraging supply. It’s the story of his young presidency, and in its more candid moments even Team Biden acknowledges the truth.
The Journal reporters note:
Extremely low interest rates, reflecting Federal Reserve policy, and multiple rounds of government stimulus are contributing to booming demand for goods. Strong demand and limited supply are a recipe for inflation.
In March, as part of a plan crafted on the 2020 campaign trail to prevent a repeat of the 2009 recession, Mr. Biden signed into law a $1.9 trillion coronavirus-relief bill that included $1,400 checks to many Americans, an extension of a $300 weekly jobless-aid supplement, and a one-year expansion of the child tax credit that provides periodic payments for many households. Some economists have pointed to that package, which coincided with a pickup in economic activity as Covid-19 vaccinations became more widely available, as contributing to inflation.
“It was just a mistake and we’re paying for it, and you just have to let it get through the system and don’t repeat the error,” said Doug Holtz-Eakin, who was an economic adviser to President George W. Bush.
White House officials acknowledged that the March law, known as the American Rescue Plan, may have contributed to rising prices, a possibility they said they were aware of before it passed. But they say that the law was necessary and that they can take steps to combat inflation now.
“We recognize the stress that this can put on family budgets and we’re doing everything we can, both on the supply chain side, the gas side, the offsetting of the cost side to help families,” said Jared Bernstein, a member of the White House Council of Economic Advisers, referencing inflation. “But we would not trade the benefits of the rescue plan for where we are today. The rescue plan saves lives.”
But acknowledging fault often isn’t as much fun as blaming others. The Journal account adds:
White House officials said Mr. Biden would continue publicly calling out industries that he believes are raking in large profits while raising prices for consumers, amid calls from some of Mr. Biden’s outside advisers to respond aggressively to inflation to counter mounting criticism from Republicans.
This column is not claiming that Mr. Biden’s outside advisers actually believe that industries are causing inflation. But some advisers believe that blaming business polls well. Annie Linskey and Ashley Parker report in the Washington Post:
The Biden administration has taken pains in recent days to show it is working to ease the pain of inflation for Americans… The emphasis comes after months of pleas from worried Democrats, who have pressed White House officials to do more to acknowledge inflation as a central concern for voters and tout what they are doing to combat it.
That group included at least four leading Democratic pollsters who’ve urged White House Chief of Staff Ron Klain to make a bigger show of the policies that Biden is pursuing to stem inflation, with at least one saying they should point the finger at the villains in an economy in which large companies have seen record profits, according to two people familiar with the conversations.
In a Tuesday speech Mr. Biden said, according to the White House transcript:
I’ve asked the Federal Trade Commission to consider whether potentially illegal and anti-competitive behavior in the oil and gas industry is causing higher prices for consumers: so we can ensure the American people are paying a fair price for their gasoline.
I also want to briefly address one myth about inflated gas prices: They are not due to environmental measures. My effort to combat climate change is not raising the price of gas or increasing its availability.
As for this last point, it seems that Mr. Biden has finally built a bipartisan consensus on an energy issue. Americans can certainly agree that his climate policies are not increasing the availability of gasoline.
But as for his effort to cast aspersions on people who work in the energy industry, Mr. Biden and his pollsters are not the only ones who want to make businesspeople the bad guys.
Sen. Elizabeth Warren (D., Mass.) said in a Wednesday tweet:
Wondering why your Thanksgiving groceries cost more this year? It’s because greedy corporations are charging Americans extra just to keep their stock prices high. This is outrageous.
This week Ms. Warren has been sending letters to energy company CEOs questioning “the extent to which these price increases are being driven by energy companies’ corporate greed and profiteering.” The senator cites Wall Street Journal reporting and shares her suspicion that energy companies are involved in some sort of “profit maximization effort.” Can you believe it?
An accompanying Warren press release also cites the Journal and accuses natural gas companies of “limiting domestic supply.” What makes the Warren message especially unpersuasive is that the senator’s website still prominently displays an early 2020 press release accusing the Trump administration of seeking to expedite approval for U.S. fossil fuel projects. Limiting domestic supply has always been a Warren priority—except when she sees a media opportunity to blame business for rising prices.
And she is not simply blaming the energy business. On Monday she sent a letter to the Justice Department’s antitrust division:
I am writing regarding increasing prices paid by consumers for chicken, turkey, and other poultry products as a result of excessive consolidation, price fixing, vertical integration, and plain-old corporate greed.
Speaking of unpersuasive, Sen. Warren’s busy week also included putting out a statement regarding the president’s renomination of Federal Reserve Chairman Jerome Powell. But even though the senator expressed opposition, her statement somehow made no mention of inflation.
In sum, Ms. Warren wants consumers to think that rising prices are the fault of people selling energy and food, but not the Fed chairman who has presided over a historic era of U.S. money creation—nor the politicians like herself who have enacted record levels of debt-fueled spending.
Ms. Warren, Mr. Biden and their colleagues may have trouble getting Americans to ignore the Washington roots of inflation. Ms. Linskey and Ms. Parker report:
In another sign that inflation has thoroughly seeped into the culture as a concern for voters — and thus become a political concern for Democrats — the satirical Onion website even joined the ribbing on Tuesday with a fake but biting headline about the treasury secretary’s efforts to stem inflation: “ Janet Yellen Announces Americans Can Use Promo Code ‘THANKS’ For 10% Off All U.S. Goods And Services.”
The Democrats seem to have a tough case to make in seeking to blame price hikes on business. But let’s say they are successful in persuading consumers that surging inflation is actually a barometer of corporate behavior. They would then need to explain why the Biden era is characterized by such a historic surge in greed. Has Mr. Biden inspired selfishness to reach its highest level in 31 years?
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