Economic Developments / Government Watch / Politics

U.S. Inflation Starts in Washington, Not Moscow

Inflation

President Joe Biden spoke at the Port of Los Angeles the other day and addressed the issue foremost on the minds of Americans today — inflation. And in the spirit of a tried and true liberal, he blamed everyone in the world for a problem that he is responsible for. Apparently, our president believes that Vladimir Putin is running America. “We’ve never seen anything like Putin’s tax on both food and gas…Putin’s price hike is hitting America hard…I’m doing everything in my power to blunt Putin’s price hike and bring down the cost of gas and food.”

Speaking on CNN, Treasury Secretary Janet Yellen showed she has a little more integrity than her boss by admitting the inflation situation was mismanaged and she was wrong about what was happening. “I think I was wrong about the path that inflation would take,” she said, referring to her observations last year that escalating inflation was a “small risk” and wouldn’t “be a problem.”

The president does, of course, see that Putin has some accomplices in ravaging Americans with escalating prices. Among these, per Biden, are the ports, the supply chain, foreign shippers and the oil industry. “One thing I want to say about the oil companies,” said Biden: “they have 9,000 permits to drill. They’re not drilling…Why aren’t they drilling? Because they make more money not producing more oil. The price goes up.”

Our president demonstrates that his understanding of economics is less than any college freshman. Oil markets are global and competitive. No one company, even a huge company like ExxonMobil, controls the market. Even the biggest company is just one participant in a competitive market. Unless our president wants to argue that American oil producers are a cartel, like OPEC, that controls about 40% of total world oil production, no one company causes the price to move.

Every company is a price taker, not price maker. Whatever the price is, companies will produce and sell as much as they can to maximize their current revenues. To suggest otherwise is pure economic ignorance.

Unfortunately, the late, great Nobel prize winning economist Milton Friedman, who explained the causes of inflation, has been washed away in today’s woke culture. Friedman’s famous observation was that “inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” Friedman is unpopular with liberals because once it is understood that inflation is the result of the government printing excessive amounts of money, we understand that inflation can only be caused by government, because only government can print money.

Once it is clear that only government actions, in the way of creating excessive amounts of money, cause inflation, then those in government cannot blame others, as our president is now doing. Economists Steve Hanke and John Greenwood, looking at the rate at which the Biden government was creating money, wrote in the Wall Street Journal in July 2021, “By the end of the year, the year-over-year inflation rate will be at least 6% and possibly as high as 9%.”

Clearly, they were right on target.

Responding to Biden’s recent explanations about inflation, Hanke and Greenwood point out, “China, Japan and Switzerland also face elevated oil prices, supply-chain problems and fallout from the war in Ukraine, but their annual inflation rates are 2.1%, 2.5% and 2.5%, respectively. They have avoided the ravages of inflation because their central banks haven’t produced excessive quantities of money.” If there is anything we should be grateful for today, given what is happening, it is that Biden and the Democrats in Congress failed in their Build Back Better plan to layer another $5 trillion in new government expenditures into our economy.

Less government spending and more honesty, responsibility and clear thinking is our only path to emerging from today’s economic chaos.

Star Parker is president of the Center for Urban Renewal and Education and host of the weekly television show “Cure America with Star Parker.”

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John
5 months ago

The Democratic Party only has one agenda and that is to destroy America. They want to make us like a third world country so there is a one word government in control.

Hal
5 months ago

Wake up Americans. Inflation is a political method for taxing in a mostly secret way of covering up their mismanagement of the economy. In their zeal to fill their own pocketbooks and hide what they are really doing (because it would get them unelected in the future). Even the Republicans tend to be a little tendency to.abuse their economy stewardship, but nowhere near the extent of the DemocRats. Term limits for Congresspeople will substantially curtail the “spend and deceive” practice so common to the Fed government now. Nest feathering is more easily accomplished if the politician can hold his elected position for several decades. The longer the tenure of the politician, the more and more easily he/she can feather their personal nest. TERM LIMITS TIME IS LONG OVERDUE. I would suggest two terms max.

ElleOop
5 months ago

Ass Clown, elected by the masses (who are asses), traded for “mean tweets”.

David Millikan
5 months ago

Hey, DICTATOR Beijing biden, YOU STARTED this. NOT Russia or China or Iran or N. Korea. YOU. And YOU ALONE ARE RESPONSIBLE.
SO QUIT BLAMING EVERYBODY ELSE.
YOU ARE GUILTY. NO ONE ELSE. SO GROW UP and BE A MAN WHICH I KNOW IS IMPOSSIBLE FOR YOU.
CAUSE YOU ALWAYS HIDE and BLAME EVERYBODY ELSE LIKE THE GOOD COWARD YOU ARE.

Barb
5 months ago
Reply to  David Millikan

It’s almost time for him to hide away again, the weekend is approaching. Time for his Vitamin B12 shot, time to get his hair plugs, time to get his false teeth to fit right, time to have that excess skin next to his eyes lifted & stitched in place, time for Hunter to guide him for next week’s problems. These are the important things on his weekly agendas, not fuel, food, formula, interest rates, stock market, foreign issues, etc.

Greg
5 months ago

You begged the question above, “who is running the country?” I guarantee you that it’s Biden- he’s too feeble minded. I have my theories.

JEFFREY JONES
5 months ago

SAVE THE U.S.A…..Exterminate all demonrats, commies, and nazis….It’s time for a new civil war against the leftie loonies!!!….,,,,,

Rik
5 months ago

Yes, it’s Putin’s fault that Jackass Joe is SO STUPID!

Lover of America
5 months ago

BIDEN needs to take away the ridiculous new rules for drilling for oil & gas! We need to be able to go back to the tried and true – and which don’t cause intense polution – go GIT ‘ER DONE!

Stephen Russell
5 months ago

Began by Biden day 1

Kim
5 months ago

When Washington elites become so disconnected from what most Americans are feeling, we can see they’re more committed to their ideology (progressivism/socialism) than they are to fighting inflation or to helping the “little guy”. The dems have always “fought” for the working person and minorities by giving them free stuff and programs paid for by others. But that runs up the national debt, increases inflation, and hurts the business climate.

Whether he blames Putin, Ukraine, the oil companies, OPEC, climate change, the supply chain, bad weather, Republicans, Trump, truckers, or greedy businesses, it’s obvious from the rapid decline in this country’s standing that this president and his cabinet secretaries have no idea what they’re doing. Some of my favorite lines issued from biden and obama include, in essence, “If you want to lower inflation, tell businesses to just lower their prices”. Or, “If you want to lower the unemployment rate, just hire people.” No clue…they’re idiots.

Biden’s words are meaningless. He has lost all credibility with anyone in possession of half a brain. If enough voters see through this doddering old fool’s intentions and his attempts to blame anyone but himself for this dire economy, we have a good chance to recover by putting conservatives back in government. Please vote accordingly.

Greg
5 months ago
Reply to  Kim

I agree with 99% of what you shared- and we’ll said, Kim. I sadly do believe that those outside the limelight, those in the shadows know exactly what they are doing. Biden is simply a figurehead (a poor choice at best). Those truly running the show are dangerous people with the destruction of free society as their goal. The fate of the free world truly is at stake.

Kim
5 months ago
Reply to  Greg

Thanks, Greg. Yes–that’s what I meant by their being committed to their ideology, whoever’s behind the wheel. Biden’s, pardon me, too stupid to come up with any complete sentence or cogent thought by himself. We see what happens when he tries!

Walt
5 months ago
Reply to  Greg

Right on Greg…..this is all part of the plan…..the plan to bring this bring this republic down…….notice I said this republic…….to make this grand piece of real estate part of the one world ….and…..and….they make no bones about it

Hal
5 months ago
Reply to  Kim

I wonder if anyone is clued in as to how close Federal economics (particularlly as followed by the Comme DemocRats) is similar to a sophisticated huge Ponzi Scheme??? Balanced Budget Amentment .. anyone????

Max
5 months ago

The BLAME game goes on, the BLAME game goes on. The further away from REALITY, the BLAME game goes on. (Just following my HANDLER’s instructions as I fill my pockets with your money.)

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