The White House has long said that inflation is “transitory” but is, at the same time, quietly signaling a shift in approach as it becomes increasingly clear that the cost of goods and services will continue to rise for the foreseeable future.
President Joe Biden’s Council of Economic Advisors recently published a little-noticed white paper comparing the current inflationary run to the three-year-long inflationary episode immediately following World War 2. What’s more, the President’s top economic advisors have met with Larry Summers, former Treasury Secretary under President Bill Clinton, a surprising move given the fact that Mr. Summers has long warned of inflation and spoken against President Biden’s massive infrastructure spending plans.
While the White House quietly seeks to prepare itself for long-term inflation, President Biden continues to tell the masses that inflation is “temporary” as “the economy is recovering.” Ironically, at the same time, he announced at a recent CNN town hall that the reason individuals in the hospitality industry are having a hard time finding workers is that they are not “willing” (or able) to pay these workers more money. The statement is an odd one disconnected from the reality of how the economy works.
Companies that incur additional expenses due to paying extra money to workers will naturally pass the costs to consumers. Thus, the price of goods and service will rise, and inflation will continue on as workers demand even more money to pay for the increased cost of living.
It’s quite clear to the average person that inflation is here, and it’s set to be around for the foreseeable future. Consumer prices have increased at a 9.5% annualized rate since President Biden took office in January. John Catsimatidis, CEO of NYC supermarket chain Gristedes, is warning that grocery prices will rise by 10% to 14% by October 2021.
The situation is sure to be exacerbated by the current drought in California and the surrounding states, as this region produces a great deal of the food people eat on a daily basis.
What’s more, used car prices have spiked by over 10% in the last month alone, and the cost of real estate has risen by a whopping 23% in the last year alone. One would hope that the current state of affairs would cause the President to rethink his plan to inject trillions more into the economy. Sadly, President Biden seems far more concerned with pleasing the left-wing of his party than meeting the needs of the American people.