A long, long time ago — 1992 to be specific — the American media howled with derision when then President George H.W. Bush professed “amazement” at a new supermarket bar code scanner, the coverage of which was supposed to demonstrate that Bush was hopelessly out of touch with the daily lives of ordinary Americans.
To its credit, the Associated Press a few days later tried to correct that impression, but by then the rest of the press had moved on and the falsehood has lived on ever since.
Bush’s supposed gaffe at least had no policy ramifications, although the story didn’t help his reelection efforts that year.
The same can’t be said about President Biden’s absurd comments to 60 Minutes last Sunday that inflation is now under control, albeit at more than 8%, the highest sustained level in more than 30 years.
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After dismissing August’s monthly CPI reading as “up just an inch, hardly at all,” he proceeded to gladly dig himself even deeper, proudly telling the interviewer Scott Pelley that “we’re in a position where for the last several months, it [inflation] hasn’t spiked, it’s been basically even.”
In other words, inflation hasn’t risen to 9% or 10% year-on-year, so we’re in good shape.
This comes on top of other whoppers he and other members of his administration have said over the past several months, such as telling us that the recent student loan giveaway and an earlier deficit-raising budget measure were all already “paid for,” as if there was no cost involved.
Not to mention labeling his most recent budgetary measure the “Inflation Reduction Act.” Talk about Newspeak.
The point here is to demonstrate just how hard Federal Reserve Chair Jerome Powell‘s job is going to be to try to bring down inflation — yes, Mr. President, it’s really high and not getting lower — without any help from the fiscal authorities led by the White House. So brace yourselves for more interest rate increases.
During the Great Recession and global financial crisis of 2008 and the 2020 pandemic, the fiscal and monetary authorities worked closely together to try to get the American people and economy through with as little pain as possible. Congress and the White House threw massive amounts of money at the problems, while the Fed paid a big part of the bill by buying up an enormous chunk of the U.S. Treasury and mortgage bond markets.
Now that these crises are pretty much over, with inflation as the hangover, government policy needs to move to a tighter monetary policy and a more restrained fiscal policy.
Unfortunately…
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