It surely doesn’t come as a coincidence that only when contracting the coronavirus forced President Joe Biden to be physically removed from his way-too-online White House staffers that the president finally brokered a budget deal with Sen. Joe Manchin (D-WV).
From the start of his tenure, the near-octogenarian occupying the Oval Office has been undercut by his supposed liberal allies smearing and insulting the key centrist votes of the 50-50 deadlocked Senate, and only with Larry Summers, the neoliberal Cassandra loathed by the Left, was Biden able to convince Manchin to endorse a massive Medicare expansion and green energy spending bill.
Biden’s victory may very well be a practical defeat for the rest of the country, but it’s a political point needed for a president in straits so dire that they’re practically uncharted. It’s also a political victory that reinforces Biden’s most important political strength: respect for and dexterity when dealing with institutional norms.
In a stunning contrast to Biden’s best quality, Sen. Elizabeth Warren (D-MA) has emerged as a foil, berating the nominally independent Federal Reserve for finally doing what is right, not what is easy, at the very moment that Biden (and the rest of the country) needs Chairman Jerome Powell to step up the most. Just one month after Biden recommitted his refusal to browbeat the Fed (and mark a contrast from his predecessor, who repeatedly took to Twitter to try to bully the Fed into artificially juicing the economy with unnecessary rate cuts), Warren has done just the opposite.
One Wall Street Journal op-ed of Warren whining about the audacity of the paupers is a tantrum Biden can afford to ignore. The verbal diarrhea that this supposed ally of Biden’s has spewed throughout the Beltway is an embarrassment and a direct insult to the president Warren is supposed to be partnered with.
After the Fed unanimously voted for a 75-basis-point increase to the federal funds rate, bringing nominal interest rates to not even 3% (well below our inflation rate careening toward the double digits), Warren accused the Fed of “failing to address the many drivers of inflation.” Considering that Warren has blamed an evil farming cartel that doesn’t actually exist for artificially hiking food prices as recently as last year, we should be terrified of what exactly Warren would prescribe when she says that “Congress needs to step up.”
Warren also wailed to the Washington Post. “We have never built a strong economy by trying to put more people out of work, and that is exactly what Jerome Powell is trying to do,” the senator said.
Anybody who has studied the most rudimentary history of monetary policy and inflation knows that the reason we avoid 9.1% inflation rates like the plague is because getting out of 9.1% inflation rates requires wreaking total havoc on the economy. The only binary the Fed ever had was to tackle the problem now and risk a moderate recession sooner or wait and definitely beckon a wicked recession later. Only Magical Modern Monetary Theory supporters like Warren could be so solipsistic to think that she and the patrician calls could simply bully suppliers into price cuts.
Powell may not prove weak enough to cower to Warren’s hysteria, but her campaign politically imperils Biden nonetheless. Although an anonymous White House aide said that Warren didn’t have any real power to influence the Fed, she is actively trying to contort the narrative to Biden’s detriment. And if Warren were to win in convincing the public of the lie that inflation is not a monetary phenomenon and that we can simply wait it out, Biden could lose his political pull over liberals that has allowed him to forgo further spending packages that would flood the economy with even more toxic liquidity.
There’s not much nice to say about Biden these days, but at least he’s not Warren. That hasn’t stopped her from trying to back him into a suicidal political corner, and if he wants to save his presidency, it’s time to get her in line and stop her lies.
