Biden on Inflation

Joe Biden pens an article about inflation, but it seems that he doesn't know how to fight inflation, or what even causes it.

In the future, Benjamins are worth less than the fabric khakis are made of. This man is just ahead of his time. // photo by Dawid Olejniczak

Joe Biden's top priority is inflation.

Was that...to create more inflation or to try to stem inflation? His rhetoric on his top priority seems to indicate the latter, but his actions seem to point to the former. He starts with the Federal Reserve, with a well-deserved jab at Trump...wait...for "demeaning the Fed"? Not for printing and issuing $2 trillion in COVID payments? Okay. Yeah, probably best to not mention that since he wanted that just as badly and that he issued another massive cash injection that was even less efficient than the aforementioned PPP, costing $855k per job. Well, what's his solution here? Oh, there isn't a solution. It's just to state that he has "appointed highly qualified people". Oh, the guy that said inflation was transitory and later had to admit was way worse than he thought it would be? That guy?

Well, what's his next one? Oil prices. What's the boogeyman for this one? Of course. Russian oil is "off the market". And his answer for it? "Punish Putin". Presumably by printing more money to give to Ukraine. Yeah, that'll get the oil flowing again. What's his other solution? He bragged that he "led the largest release from global oil reserves in history." Which is like bragging that to stem the gigantic credit card bills after losing his job, he will take out massive amounts of savings in his IRA while scoffing at the idea of finding another job. Problem solved! Maybe he could, instead, allow domestic oil production and transportation instead of blocking them at every turn? No, that would make it too easy. Finally, he pushed for his proposal of clean energy tax credits. Ah yes, giving people tax relief only if they buy an expensive electric car. That makes total sense to save people money.

Somewhat ironic was a month later, the Biden Administration's rush to indicate that falling oil prices were not included in a subsequent CPI that showed continuing inflation. So, what happened? Did Russia suddenly find a conscience and leave Ukraine? No, the war is still going on. Did corporate greed turn into corporate benevolence, or will the simple-minded finally admit that putting all their chips on "Greed!!" is a losing bet? No, it was oil futures looking at continuing inflation, resulting rate hikes, and predicting an economic downturn, along with increased oil production, after OPEC talked about increasing production earlier in the year.

For other goods, he wants to "crack down on exorbitant fees" charged by foreign ocean freight companies. They started charging these exorbitant fees only in the past few months? He talked about capping the price of insulin. Yeah, price controls. Those always work. Just ask those people still waiting in line for gas in the 1970s. Forcing people to wait in line for insulin would be catastrophic.

Well, maybe the third one is the charm. He says we need to keep reducing the federal deficit and that the deficit will lower this year by $1.7 trillion, the largest fall in history. Great! This will...wait. Keep reducing? This decrease in the deficit is followed by the largest increase in deficit in history, which Joe Biden also pushed for. Funny how that was left out of the article. And remember, there is still a huge deficit! It's like bragging how all your credit cards are maxed out, but it's okay because we'll just open a new line of credit and start charging that new card, but we totally won't buy that gold-plated, diamond-studded pinball machine for the man cave. We'll just buy that gold-plated, diamond studded pinball machine for the man cave that has two fewer diamond studs in them.

If Biden is so concerned about inflation that he would make it his priority numero uno, there are some things he could do. The biggest thing he could do would be to abolish the Federal Reserve Bank, or at least audit it so that they could not continue to do this. In response to the inflation in the late 1970s, interest rates in the 1980s were raised to 20%. This time around, it's far worse and we're thinking it would be curbed by upping the interest rate by one and a half percent? But okay, Biden's not going to do that. The establishment has way too much to gain from having a centralized bank.

Aside from monetary policy, the easiest and most impactful thing he could do would be to reverse Donald Trump's tariffs. It would probably gain him political currency than lose it and it would do much to lower prices. Biden, for the bulk of the first half of his presidency, decided to continue the tariffs, though has "considered" removing some of them in the past month. He could also remove barriers and regulations that increase the cost of doing business. The flat-out easiest thing he could do would simply be to not to certain things. Barring the Keystone XL pipeline? A project that would make costs go down and to decrease the carbon emissions from having to ship gasoline would greatly help prices at the pump. That's it. Just don't do stuff. That would help.

Instead, what we get is the patently absurd 'Inflation Reduction Act'. As a rule of thumb, blockbuster bills with blockbuster titles can generally be forecast to provide the opposite or negligible effects intended by the title of the bill. The Patriot Act, which blatantly shredded the Constitution. The Affordable Care Act, which made care more expensive. The Paycheck Protection Program, which saw rampant fraud that migrated the money to major corporations and other entities that didn't need the money, and ended up costing $170k-$250k per job.

The instant I heard the Inflation Reduction Act, my first thought was that at worst, would probably serve to increase inflation and at best, have no effect on inflation. Lo and behold, a preliminary Wharton study concluded that it would have a negligible net effect on inflation, with a slight short-term increase in inflation. The Tax Foundation is a bit more confident in its findings that the bill would increase inflation but had an ultimate conclusion similar to the Wharton study.

I think it's a stretch to assume politicians would be able to even understand what inflation is, much less write a bill to combat it.