An Obama-era Treasury Department official on Thursday accused President Biden of being “dishonest” about the causes of surging inflation that has vexed consumers.
Steven Rattner, who served as counsel to the Treasury secretary, said In a New York Times op-ed that Mr. Biden’s insistence on blaming the supply chain crisis for rising inflation is “both simplistic and misleading.”
“Blaming inflation on supply lines is like complaining about your sweater keeping you too warm after you’ve added several logs to the fireplace,” Mr. Rattner said.
NBC News anchor Lester Holt last week pressed Mr. Biden on rising inflation, noting that his administration had insisted last year that it would be temporary.
Mr. Biden said the supply chain crisis is responsible for the spike in inflation, the highest in 40 years.
“The reason for the inflation is the supply chains were cut off, meaning that the products, for example, automobiles — the lack of computer chips to be able to build those automobiles so they could function; they need those computer chips. They were not available,” Mr. Biden said.
Mr. Rattner disputed that claim, writing that the president “can’t blame clogged ports” for inflation. He added that supply chains have not been “cut off,” but rather “just stretched.”
Instead, Mr. Rattner said “vast amounts of government rescue aid,” underspending during the COVID-19 pandemic and the rise in private-sector resignations are among the factors fueling inflation.
“It’s a classic economic case of ‘too much money chasing too few goods,’ resulting in both higher prices and, given the extreme surge in demand, shortages,” he wrote.
He also called for the administration to shift its approach to combating inflation, saying it should focus on deficit reduction. Mr. Rattner wrote that a smaller deficit would reduce government spending, helping offset demand by consumers.