BIDEN’S PATHETIC INFLATION PLAN. On Oct. 8, 1974, amid a dramatically worsening economy marked by skyrocketing inflation, President Gerald Ford unveiled a plan he called “Whip Inflation Now.” To fight inflation, the government made millions of WIN buttons and encouraged people to carpool to conserve gas — this was after the Arab oil embargo — and to grow their own food. The campaign was a disaster, alternately ridiculed and hated. Most of all, it didn’t work. Alan Greenspan, who was a top Ford economic adviser, called it “unbelievable stupidity.”
Ford had only been president a couple of months, having taken over after Richard Nixon resigned over Watergate. Two years later, Ford lost his bid to be elected president on his own.
Inflation was worse back then, hitting 12%. But it is bad now, at 8%, and might go higher still. And now, another president has decided to take on inflation. Of course, President Joe Biden is not going to “whip” inflation — that word was retired long ago. Instead, he is going to “tackle” inflation. “I will tackle high prices while guiding the economy’s transition to stable and steady growth,” Biden wrote in the Wall Street Journal. “I have made tackling inflation my top economic priority.”
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What is striking is how meager Biden’s anti-inflation plan is — shades of “Whip Inflation Now.” In the Wall Street Journal, he outlined a three-part proposal.
Biden’s first anti-inflation measure is to let the Federal Reserve fight inflation. The president’s role, as he sees it, is not to say anything mean about the Federal Reserve. “My predecessor demeaned the Fed, and past presidents have sought to influence its decisions inappropriately during periods of elevated inflation,” Biden wrote. “I won’t do this.”
Biden’s second anti-inflation measure is to release oil from the strategic oil reserve and press Congress to pass tax credits for people who switch to electric cars and other clean energy measures. He also wants to fix supply chains, spend more on infrastructure, have the government subsidize the construction of more houses, negotiate Medicare prescription drug prices, and “lower the cost of child and elder care to help parents get back to work.” In other words, Biden wants to pass his defunct “Build Back Better” plan under the guise of fighting inflation.
Biden’s third anti-inflation measure is to reduce the deficit by raising taxes on the wealthy.
It’s a weak and misleading bunch of proposals. Douglas Holtz-Eakin, the former head of the Congressional Budget Office, described it this way: “1) Blame someone else [the Fed] if inflation doesn’t go away. … 2) Ludicrously label elements of the failed Build Back Better Act that have no legislative future as anti-inflation measures. 3) Claim the mantle of fiscal responsibility. … That’s not much of a plan.”
Meanwhile, Biden has enlisted his administration’s top economic official, Treasury Secretary Janet Yellen, to make a ritual confession for failing to recognize the threat of inflation. “I think I was wrong then about the path that inflation would take,” Yellen said on CNN on Tuesday, referring to a 2021 statement when she said there was just a “small risk” of inflation. “There have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that I, at the time, didn’t fully understand, but we recognize that now.”
How’s that for a mea culpa? Some other Biden economic officials are also taking the blame for inflation. Appearing on the radio program Marketplace, Cecilia Rouse, chairwoman of the president’s Council of Economic Advisers, admitted that the administration has caused some inflation, but only with the best of motives. “If you want to say, did the Biden administration, by helping people get through this pandemic in a way that they were able to stay in their homes, have jobs, have household balance sheets, even among those in the lower part of our income distribution that are stronger than they were before the pandemic — did that cause some of the inflation?” Rouse asked. “Yes.”
All this comes as Biden is reportedly stewing over what he views as his White House’s poor messaging on inflation and other concerns. On Tuesday, NBC News reported that Biden is “pressing aides for a more compelling message and a sharper strategy.” Like many a president before him, Biden seems to believe he is doing a good job and that his political problems stem from poor messaging and bad communications. The problem, of course, is that he is not doing a good job.
It’s been nearly 50 years since Ford’s ill-fated “Whip Inflation Now” campaign. Biden certainly remembers it — he was a new member of the Senate at the time. Who could have predicted that half a century later, as president of the United States, he would make his own hapless attempt to fight inflation — an inflation that he himself has helped to make worse.
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