Harris Calls 2.9% Inflation a Victory
– By Howard Sierer –
On August 14th, the Bureau of Labor Statistics announced that annual inflation was running at a 2.9% rate in July. The White House claimed that, “Today’s report shows that we continue to make progress fighting inflation and lowering costs for American households.” Both claims are false on their face.
The Biden-Harris administration has been stoking, not fighting, inflation for over three years. When they took office in January 2021, the economy was growing at 6.4% rate, real GDP had returned to its pre-pandemic high and inflation was running at annual rate of 1.4%. Unwilling to let Republicans take credit for the robust economic recovery following the pandemic, Biden-Harris and Congressional Democrats enacted the so-called $1.9 trillion American Rescue Plan, ignoring the inflation warnings of Obama economic advisors.
I include Vice President Harris to underscore her direct role in this legislative fiasco. The Senate was divided 50-50 between Democrats and Republicans in 2021. Not a single Republican voted for the bill, so Harris as President of the Senate cast the deciding vote.
With flagrant disregard for the already-evident inflationary consequences of their actions, Biden-Harris went on to enact the hilariously-named Inflation Reduction Act in 2022, enshrining an additional $438 billion in new spending. Once again, Harris cast the tie-breaking vote.
So is today’s 2.9% rate acceptable? Not according to what Biden-Harris were saying in April 2021. Their administration reported 2.6% annual inflation that month which was a cause of great concern at the time and forced administration officials to try to explain it away. The Washington Post reported in April 2021 that “although inflation is edging upward, federal officials have stressed that the shift will probably be short-lived, as parts of the economy begin to normalize after more than a year of the pandemic.”
Economists and Republican lawmakers raised red flags that the administration’s excessive and unneeded spending would overstimulate the economy and lead to inflation. Biden-Harris apologists at the New York Times assured its readers: “Today’s data reflects backward-looking information, which is not necessarily a sign of what’s ahead. Don’t take the backward-looking information in the new report as proof that those inflation warnings are coming true.”
Since then, inflation readings have been as high as 9.1% and have remained higher than 2.6% for 40 consecutive months including last month.
The egregious Biden-Harris spending spree pumped trillions of dollars into the economy resulting in a massive excess of dollars chasing available goods and services. Once again, the resulting inflation validated Nobel prize winner Milton Friedman’s famous statement, “Inflation is always and everywhere a monetary phenomenon.”
The Federal Reserve is responsible for controlling the money supply and fortunately, it is entirely independent of White House political influence. Realizing – sadly a year too late – that accelerating inflation was not “transitory” as Biden-Harris were claiming, the Fed began putting on the monetary brakes, raising interest rates in increments of as much as an unprecedented 0.75% starting in the spring of 2022 and continuing into 2023. These interest rate increases and the Fed’s companion reductions in the money supply deserve the credit for reducing inflation from its 9.1% rate in June 2022.
So how are we supposed to feel when Harris tells us she’s winning the inflation battle? As measured by the Consumer Price Index, prices in July were 20.25% percent higher than they were in January 2021 when Biden-Harris took office. During that same interval, average hourly earnings of all private sector employees rose 17.2%.
The facts don’t lie: Biden-Harris have left the average American worker 3% worse off than when they took office. And they have the gall to say they are “lowering costs” and we should be thankful for their progress.
If you’ve liked the last 3 ½ years, vote for Kamala Harris in November. She’s promising more of the same for the next four years, a laundry list of the things she and Biden couldn’t get when Republicans took over the House of Representatives in 2023. Forbes says, “Harris’ economic policy agenda is largely in line with Biden’s economic platform.”
In other words, Harris plans to repeat all of the Biden-Harris mistakes of the last four years. My advice if she’s elected: tighten your belts and stock up on necessities; expect their prices to continue to rise faster than your paycheck.
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