President Joe Biden and the White House continued this week to spin sky-high inflation numbers as voters balk at the rising cost of living — often relying on misleading arguments to deflect responsibility for the price hikes.
Democrats have blamed a range of targets for causing prices to rise — from the war in Ukraine to supply chain hiccups to the low unemployment rate to corporate greed.
Their messaging on inflation this week continued to rely on occasionally deceptive claims as White House officials sought to soften the blow of data from the Labor Department that reflected a sharp spike in prices last month.
BIDEN AND DEMOCRATS BLAME BOTH PUTIN AND ‘BIG OIL’ FOR HIGH PRICES AT THE PUMP
Here is a look at some of the White House’s claims this week:
“What people don’t know is that 70% of the increase in inflation was the consequence of Putin’s price hike because of the impact on oil prices — 70%.”
— President Joe Biden, April 14
The rising cost of fuel has contributed to the price increases the United States experienced in March, but other factors drove up the increases significantly as well, making Biden’s claim misleading at best.
“Increases in the indexes for gasoline, shelter, and food were the largest contributors to the seasonally adjusted all items increase,” the Bureau of Labor Statistics said this week.
Gas prices rose 48% over the past year.
Other categories of goods also made significant leaps between March 2021 and last month, according to the same BLS report. Used cars and trucks, for example, were 35% more expensive, and the cost of groceries jumped 10%.
The inflation number for March that grabbed headlines, the consumer price index increasing by 8.5%, is measured on an annual basis, not a monthly one.
Yet Biden appeared to be citing the inflation rate between February and March to attribute 70% of the price increases to the war in Ukraine despite the headline inflation numbers not typically being measured that way.
The inflation rate is still high if gas and food prices, which economists consider more volatile, are taken out of the equation.
Inflation rose 6.5% for all other items in March, “the largest 12-month change since the period ending August 1982,” according to the BLS.
“That is the view of the Federal Reserve and outside economists, and they all continue to project it will come down this year.”
Many outside economists do not characterize inflation as transitory and, in fact, have issued increasingly dire predictions for the months ahead.
A Bloomberg survey of economists conducted the first week of April, before the most recent CPI numbers were published, found that economists predicted higher prices through the third quarter of 2023.
Charles Goodhart, central banker for the United Kingdom, said last month that inflation is likely to linger for years thanks to shifting demographics that will affect the availability of labor for the long term.
Goodhart predicted in March that “resurgent inflation” could occur for as long as “the next two decades.”
The White House’s argument that inflation would be transitory is usually based on an argument, at least before the invasion of Ukraine, that the primary factor driving up prices is the pandemic. White House officials have blamed supply chain problems for pushing up prices long before turning to Russian President Vladimir Putin as the scapegoat.
Economists have disagreed with the pandemic-related assessment as well, however.
Research from the Federal Reserve Bank of San Francisco found last month that “since the first half of 2021, U.S. inflation has increasingly outpaced inflation in other developed countries.”
The researchers blamed stimulus packages for a significant amount of the inflation experienced last year.
In other words, while other countries also experienced inflation due to the effects of the pandemic globally, the U.S. experienced far worse inflation due to Congress passing too large a stimulus bill.
“We’ve also seen, given energy is such a significant driver of this data, an increase in energy prices over the last month-plus — since the invasion of Ukraine. That’s factual. That’s based on data that we have seen out there.”
— Psaki press briefing, April 13
While the war in Ukraine has indeed driven up the price of fuel, gas prices were on the rise well before the invasion.
In 2021, the average price per gallon of gas rose more than $1 in the U.S. as demand for travel and fuel bounced back faster than supply, according to the U.S. Energy Information Administration.
By the fall of 2021, gas prices had hit seven-year highs across the country, with some parts of California experiencing prices as high as $5 per gallon — again, well before the invasion.
“We believe that the economy is strong. We have created more jobs last year than any year in American history. We saw the unemployment rate at 3.6% last month.”
— Psaki press briefing, April 11
This week was not the first time the White House attempted to use job creation numbers as an indication of economic success without the proper context.
Although the U.S. economy did add millions of jobs in 2021, Psaki neglected to note that it had shed millions of jobs the year before due to pandemic-related shutdowns.
The economy lost 9.4 million jobs in 2020, according to the BLS, and added 6.5 million jobs in 2021.
The unemployment rate of 3.6%, which Psaki cited this week, is the same as the national unemployment rate of 3.6% that former President Donald Trump oversaw in January 2020 just before the pandemic hit.
That means Biden is not overseeing a uniquely positive employment picture — and, in fact, labor shortages are a significant factor business owners have cited in why they’ve had to raise prices or scale back services.
REPORTER: “You had mentioned in that statement that the truck inspections … that Gov. Abbott has been conducting have led to disruptions for the food and automobile supply chains and rising prices for families. So is the White House blaming Greg Abbott for inflation?”
JEN PSAKI: “Well, I think we’re trying to state the facts of what his — another political stunt that we’re seeing happen and the impact of it.”
— Psaki press briefing, April 13
In a statement published by the White House on Wednesday, Psaki leaned into suggestions that Texas Republican Gov. Greg Abbott’s truck inspections are a contributing factor to higher costs.
Psaki said the truck inspections “are causing significant disruptions to the food and automobile supply chains, delaying manufacturing, impacting jobs, and raising prices for families in Texas and across the country.”
Abbott had recently ordered that commercial trucks entering the U.S. from Mexico be subjected to inspections as he pressured Mexican leaders to strike border security agreements with the state, reaching such an accord Friday.
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While the inspections have indeed slowed deliveries of goods from Mexico, Abbott’s policy of “enhanced inspections” to deter cartel-related smuggling had only been in place for nine days as of Friday.
That is likely not long enough to have contributed significantly to inflation and since the inspections began in April had no effect on the inflation numbers the White House spent this week defending.
