QUESTION ASKED AND ANSWERED: What Does It Say That This Administration Was Surprised by Bad Inflation Numbers?
The first ten months of the Biden administration have brought more than their fair share of unnerving revelations, reports, and rumors, but this line in a Washington Post story from Wednesday is a giant flashing neon sign that this White House is every bit as out of touch as you fear: “Senior White House officials were greatly disappointed by Wednesday’s report and surprised at how serious the inflationary problems are throughout the economy, according to people familiar with the matter. The report also fueled mounting concerns about supply chain bottlenecks.”
Surprised? We’ve been seeing building and worsening signs of increasing inflation since at least early summer, if not earlier. It’s bad enough if the president runs around insisting no serious economist believes there is unchecked inflation; it’s worse if the president and his staff actually believe what they’re saying.
Related: Milton Friedman’s Revenge: “Friedman, whose empiricism led him to embrace free market public policy, was the most influential economist of the second half of the 20th century. But Biden has a weird habit of treating Friedman as a devilish spirit who must be exorcised from the nation’s capital. For Biden, Friedman represents deregulation, low taxes, and the idea that a corporation’s primary responsibility is not to a group of politicized ‘stakeholders’ but to its shareholders. ‘Milton Friedman isn’t running the show anymore,’ Biden told Politico last year. ‘When did Milton Friedman die and become king?’ Biden asked in 2019. The truth is that Friedman, who died in 2006, has held little sway over either Democrats or Republicans for almost two decades. But Biden wants to mark the definitive end of Friedman and the ‘neoliberal’ economics he espoused by unleashing a tsunami of dollars into the global economy and inundating Americans with new entitlements. The irony is that Biden’s rejection of Friedman’s teachings on money, taxes, and spending may bring about the same circumstances that established Friedman’s preeminence. In a year or two, the American economy and Biden’s political fortunes may look considerably different than when Janet Yellen blurted out the obvious about inflation. Voters won’t like the combination of rising prices and declining assets. Biden’s experts might rediscover that it is difficult to control or stop inflation once it begins. And Milton Friedman will have his revenge.”