Rebutting Right Wing Zombie Lies On Inflation — It’s Trump’s Fault
Perhaps the most common (and dishonest) Republican talking point of the Biden era is that somehow Joe Biden is 100% responsible for inflation. Many reporters in the “liberal” mainstream media have fallen for this phony argument. They blame inflation on President Biden’s alleged “out of control” spending. Let’s take a look at the record and do some fact checking on this issue. We can’t count on the mainstream press to do it for us.
It was Donald Trump’s policies that laid the foundation for the spike in inflation in 2021–2022. The overall money supply literally doubled during Trump’s last year as president. (Republicans tend to pretend that Trump’s presidency ended in February 2020.) Trump’s ridiculous trade war imposed tariffs on imports which was an additional tax on Americans and caused higher prices for food. The twice impeached former president’s tariffs were equivalent to one of the largest tax increases in decades. In addition, Trump’s failed trade war with China led to a shortage of chips and caused the price of cars to skyrocket.
What is also never mentioned by the “liberal” mainstream media is that Trump made a deal with the Saudis and the Russians to reduce oil production in 2020. This big cut in production caused a big price hike in 2021, which of course the GOP disingenuously blamed on Biden.
At a June 12, 2023 rally, Trump actually bragged about this deal with Russia and Saudi Arabia. He boasted that he convinced them to cut production and drive up oil prices. “I had to save the oil companies,” Trump said in his speech. In other words, Trump convinced America’s enemies to slash the production of oil — and guaranteed that Americans would be paying more at the pump once the pandemic receded and the economy recovered.
Trump and our enemies managed to cut global production by 9.7 million barrels a day. As USA Today reported: “Trump’s decision to negotiate with oil producing nations to cut production by nearly 10 million barrels a day is not only unprecedented, it also is the opposite of what prior presidents have done. While others had tried to lower prices and increase availability, Trump was trying to raise prices for everyone and cut the availability of oil.”
Mark Sumner posted on Daily Kos: “By convincing Russia and the Saudis to join in taking over 9% of the world’s global production offline, Trump ensured that there would be an extremely tight market the moment the world began to recover from the downturn he’d done so much to create.
Sure enough, as the economy began a rapid recovery under Biden, that lowered oil production level generated a tight market — one that saw companies like Exxon doubling their profits within a year. Trump’s cuts had done exactly what they were intended to do. It had reduced supply, bringing it below the level of demand and driving prices through the roof.”
Another bogus GOP and mainstream media talking point is that the American Rescue Act caused the spike in inflation in 2021. (I don’t know of any Republicans who returned the $1,400.00 stimulus checks. Do you?) In reality, most of the inflation in 2021 was caused by external factors that had nothing to do with the American Rescue Act.
“There’s a range of opinion among economists on how much of the US’s higher inflation over 2021 (a 7 percentage point increase including energy and food prices, and a 5.5 percentage point increase excluding them) can be attributed to the American Rescue Plan. Michael Strain of the right-leaning American Enterprise Institute has estimated the law added 3 percentage points. Dean Baker of the left-leaning Center for Economic and Policy Research, though, put that number at 1–2 percentage points.” Vox Media, March 12, 2022.
A new paper from a prominent economist and former Federal Reserve Chair Ben Bernanke echoed the finding that the American Rescue Plan was not a major cause of inflation in 2021–22. (I)n a report Olivier Blanchard co-authored in May 2023 with Ben Bernanke they found that the “stimulus had not overheated the labor market, Bernanke and Blanchard concluded. Rather, inflation had arisen from supply chain foul-ups caused by the Covid epidemic, an act of God rendered worse by comic-opera mismanagement under President Donald Trump.” New Republic on June 30.
But what about the alleged out of control spending? Federal spending was 31.2 percent of GDP in 2020. Federal spending was 25.6 percent of GDP in 2022. Federal spending will be 24 percent of GDP under Biden’s budget. Spending is down significantly since Biden took office.
With the pandemic receding and world oil markets adjusting to the war in Ukraine, inflation has been running at a rate of 3% over the last year. That is nearly equivalent to the rate of inflation in 1984 — the year of Reagan’s so-called “Morning in America.” Moreover, inflation ran at about a 4% rate during most of the Reagan Administration. The Republicans and the mainstream press didn’t constantly express (faux) outrage about it.
The news on inflation is getting better. The New York Federal Reserve has estimated that underlying inflation in April was only 3.4%. If that marks a new trend, then inflation has already fallen to a rate only moderately above the Fed’s long-term target — and will probably reach the Fed’s target of 2% by the end of the year.
The U.S. currently has the lowest inflation rate and best GDP growth in the G-7 countries. The unemployment rate is currently 3.7%. That means the unemployment rate has been under 4% for 22 months in a row. The last time our nation had such a long stretch of low unemployment was in the 1960s.
Don’t take this progress for granted. In 2000 and 2016, some of us were complacent and stayed home or voted third party. The last two Republican presidents destroyed their predecessors’ progress and presided over deep recessions. We can’t let that happen again. The Republicans are dangerous when they are in power.
The choice in 2024 is America or the MAGA Republicans. Choose wisely. Now let’s get it done!