Just prior to Thanksgiving, U.S. Sen. John N. Kennedy took to the Senate floor to say, correctly, that this holiday season people would see more expensive groceries and gasoline because of the steepest inflation in 31 years.
But the Madisonville Republican’s real message seemed to be that the fault for higher prices lay with the multi-trillion-dollar packages Democratic President Joe Biden pushed through Congress this year.
“This Thanksgiving,” Kennedy said, “I hope my Democratic friends will give up on tying millstones around the neck of the American economy.”
Even as U.S. Sen. Bill Cassidy, R-Baton Rouge, was taking a victory lap for the Nov. 6 passage of a $1.2 trillion package to upgrade the nation’s infrastructure — a Biden proposal, the final version of which he helped negotiate — the senior senator alluded to a previous spending bill as a cause for inflation.
“Partly it’s the Biden administration putting in a lot of money earlier in the year when it wasn’t clear we needed it,” Cassidy said Monday on KSLA-TV in Shreveport.
He was referring to the $1.9 trillion American Rescue Plan Act, signed into law March 11 over GOP opposition. That funding kickstarted the economy after more than a year of lockdowns caused by the COVID-19 pandemic.
"President Biden’s agenda has dramatically increased inflation, and they're trying to pour gasoline on that fire," said House Minority Whip Steve Scalise, R-Jefferson.
A QuoteWizard poll by LendingTree LLC last week found that 59% of Louisiana’s consumers were having a “slight to moderate” or “very difficult time” meeting expenses.
As satisfying as it might be in this partisan world to tie the inflation can on the donkey’s tail, keep in mind that the “Blame Biden” narrative also has much to do with stoking heightened voter anxiety going into the 2022 congressional elections.
Biden makes no excuses for spending trillions to help individuals and businesses find their footing after COVID-19. The administration also argues that inflation has many causes and choosing only one to blame does little to address the issue.
A Pew Research Center analysis released Nov. 24 found higher inflation rates in 39 economies around the world when compared to consumer prices in pre-pandemic 2019. Germany, the United Kingdom, Saudi Arabia, Sweden, and other market-driven economies all are seeing higher prices.
All those nations, like the U.S., poured money into their economies to help their peoples recover from the near-complete shutdown that stalled delivery of raw materials and finished goods, and threw millions out of work, all to slow the spread of the highly contagious and often deadly COVID-19.
“Explanations for the current phenomenon proffered to date include continuing disruptions in global supply chains amid the coronavirus pandemic; turmoil in the labor markets; the fact that today’s prices are being measured against prices during last year’s COVID-19-induced shutdowns; and strong consumer demand after local economies were reopened,” Pew wrote. “Understanding why the rate of inflation has risen so quickly could help clarify how long the surge might last — and what, if anything, policymakers should do about it.”
A counteroffensive against one of those multiple prongs began last week.
Many economists say inflation has been exacerbated by the years-old Federal Reserve policy aimed at strengthening state and local governments by helping purchase the bonds used to borrow money for public projects. As successful as the policy was, some economists say in this new world where the federal government is spending trillions to stimulate the economy, supporting state and local bond purchases fuels inflation.
Fed Chairman Jerome Powell testified Tuesday before Congress that the Fed would back off those purchases and focus more on keeping a lid on prices.
The pandemic keeps pressuring the economy.
Though the unemployment rate fell to 4.2%, the U.S. Labor Department reported Friday that employers added fewer jobs in November as companies brace for another surge. The Omicron variant emerged in South Africa a couple of weeks ago and already has been found in five U.S. states.
Biden said in a speech he wants to avoid a shutdown and the problems that causes the economy. But that is going to require more people to get vaccinated.
“We’ve been doing everything we can to beat this virus. And that’s what we have to keep doing. That’s how we keep our country and our businesses and our schools open,” Biden said Thursday night. “I know COVID-19 has been very divisive in this country. It’s become a political issue, which is a sad, sad commentary.”