Inflation is a tax on everyone on everything. It has a negative impact on the economy and on the mood of the voters. It reared its head after the Biden administration made some key decisions (limiting drilling in America, shutting down the Keystone XL pipeline, reckless spending, etc.). Issues & Insights posted an article today explaining that the inflation we are seeing now was not only predictable, it was predicted.
The article reports:
We’re not big fans of economist Larry Summers, but in this case, he should be in line for a Nobel Prize for predicting exactly what is happening with inflation today … and who is to blame for it.
On Wednesday, the Bureau of Labor Statistics reported that inflation climbed at an annual rate of 6.2%, the biggest such jump in three decades.
And that’s despite repeated predictions from other “experts” that the spike in prices earlier this year was “transitory.” Even now, they are flummoxed. As the Washington Post put it Wednesday, inflation is “lasting longer than policymakers at the Fed and White House anticipated.”
But no one, we repeat, no one, should be surprised by the latest turn of events.
Go back and listen to what Summers was saying at the start of the year, and it’s eerily prescient.
Summers publicly and repeatedly warned that President Joe Biden’s $1.9 trillion “rescue” plan —which was Biden’s first big “achievement” that passed without a single Republican vote — would spark an inflationary spiral.
The article includes the following graph:
The article concludes:
But Summers had the most to lose by so publicly sticking his neck out. He’s a die-hard liberal who’d served in the Obama administration. He knew that raising a stink threatened the new president’s big-spending agenda. And, unintentionally or not, he called the lie on Biden’s claim that “leading economists” all agreed on the need for another massive COVID stimulus.
Now that Summers’ prediction is coming true, will any of his detractors apologize? Will any admit that Biden’s $1.9 trillion spending spree — which is now being followed by a $1.2 trillion infrastructure bill and, quite possibly, a multi-trillion dollar welfare expansion — was a colossal mistake? Will they acknowledge that Biden is principally to blame for the inflationary spiral the economy appears to have entered?
Don’t count on it. Biden is running around the country claiming that still more deficit-financed spending will somehow cut prices. Everyone else is busy looking for other scapegoats. Anything so as not to hold Biden, or themselves, accountable for the damage being done.
Unfortunately inflation will probably be with us until we can either change Congress or change the administration.