On Thursday, President Joe Biden blamed decades-high inflation plaguing America on Russian President Vladimir Putin’s recent invasion of Ukraine. Immediately, two notable economists from both ends of the political spectrum explained why Biden is dead-wrong in that assertion.
John Tamny, director of the center for economic freedom at FreedomWorks, told The Daily Wire that the president is confusing “rising prices” with “inflation” and that the commander-in-chief has many avenues he can use to tackle both. Even former President Barack Obama’s car czar, Steven Rattner, claimed that Biden needed to “own” the inflation and quit blaming Putin.
Fox News reported on Thursday, “Inflation hit a fresh 40-year high in February, largely driven by higher gas prices.” Fox News added that it was the highest inflation in 40 years:
The consumer price index climbed 7.9% on an annual basis, according to data released on Thursday by the Bureau of Labor Statistics. Month over month, inflation rose 0.8%.
The year-over-year reading is in line with estimates and compares with an annual 7.5% jump in January, marking the fastest increase since February 1982, when inflation hit 7.6%.
In response to the economic news, Biden issued a statement claiming that the inflation was due to sanctions and other problems caused by Putin’s war overseas. The president did, however, try to claim credit for the “good” economic news by saying that the “economic data tells the tale of two recoveries.”
“Our jobs recovery remains strong. New unemployment claims remain low, as jobs are created at a record level. The rate of people on unemployment insurance is the lowest since 1970 – more than 50 years,” he added. “And, private sector job growth is strong, boosted by the steps we took in the American Rescue Plan a year ago this week.”
In January, The Daily Wire reported why those numbers are worse than they seem due to things costing more and the dollar stretching less:
On Wednesday, the Bureau of Labor Statistics reported that in December consumer prices rose by 7% over the previous year — the highest rate in roughly 40 years. Likewise, “real average hourly earnings” — which consider the effect of inflation — decreased by 2.4% from December 2020 to December 2021, starkly cutting the purchasing power of American consumers.
Nonetheless, Biden found a new culprit for inflation: Putin.
“At the same time, today’s inflation report is a reminder that Americans’ budgets are being stretched by price increases and families are starting to feel the impacts of Putin’s price hike,” Biden said in a statement. “A large contributor to inflation this month was an increase in gas and energy prices as markets reacted to Putin’s aggressive actions.”
“As I have said from the start, there will be costs at home as we impose crippling sanctions in response to Putin’s unprovoked war, but Americans can know this: the costs we are imposing on Putin and his cronies are far more devastating than the costs we are facing,” Biden attempted to reassure Americans.
A keen observer would note that inflation had been going up since before sanctions were put in place. In response, Rattner tweeted, “Well, no. These are Feb #’s and only include small Russia effect. This is Biden’s inflation and he needs to own it.”
As The Washington Examiner reported, Rattner was “the lead adviser on former President Barack Obama’s Task Force on the Auto Industry.”
Well, no. These are Feb #'s and only include small Russia effect. This is Biden's inflation and he needs to own it. https://t.co/WsJjn6picV
— Steven Rattner (@SteveRattner) March 10, 2022
In addition to that, Tamny said that Biden was fundamentally misunderstanding the problem.
“There is an ocean of difference between rising prices and inflation. Inflation is a decline in the value of the dollar. If Biden wants to arrest inflation, the answer is simple: communicate through Treasury the importance of a strong dollar.”
“As for high prices born of global strife, including Ukraine, Biden would be wise to cease using the latter as an excuse to meddle in the markets,” Tamny advised. “If so, he’ll quickly realize that high prices always and everywhere precede lower prices due to the unchangeable law of supply and demand.”
The views expressed in this piece are the author’s own and do not necessarily represent those of The Daily Wire.