On March 15, the Bureau of Labor Statistics released its latest report tracking the Producer Price Index (PPI), which “measures the average change over time in the selling prices received by domestic producers for their output.”
According to the report, “Prices for final demand goods jumped 2.4% in February, the largest advance since data were first calculated in December 2009.” Moreover, as the report notes, “final demand prices moved up 10.0% for the 12 months ended in February.”
Obviously, this is not good news for American consumers, who will inevitably bear the brunt of these price hikes. Just last week, the Consumer Price Index (CPI) showed that inflation is already at a 40-year high of 7.9%. Based on the latest PPI report, inflation is not likely to decline anytime soon. In fact, it is almost assuredly going to increase even more, seeing as how the PPI report is a leading indicator of the CPI.
Ordinarily, in times such as these, when consumers are being punished with higher prices across the board, political leaders in Washington, DC are inclined to do anything and everything in their power to fight inflation. For those not around during the last bout of sky-high inflation during the 1970s, President Ford launched the Whip Inflation Now program, commonly known as WIN. Although WIN did little if anything to curb inflation, it at least showed that the president and Congress actually cared about the plight of the American people.
Today, on the other hand, it seems as if President Biden and the U.S. Congress, which is controlled by Democrats, could not care less about the devastating effects of sky-high inflation.
On March 11, President Biden, while addressing the House Democratic Caucus, offered this totally tone-deaf assessment of the inflation situation, “we all know that despite the progress we’ve made, families are still struggling. They’re struggling with higher prices. … But let’s be absolutely clear about why prices are so high right now. They’re very high for two reasons, notwithstanding what the Republicans say: COVID, number one. … The second big reason for inflation is Vladimir Putin.”
Give me a break.
The primary reason inflation is at a 40-year high is because of the Biden administration’s anti-energy policies coupled with his reckless spending over the past year.
On day one of his presidency, Biden canceled the Keystone XL pipeline, which would have transported 900,000 barrels of oil from Canada to Texas refineries. Biden has also banned new oil and gas leases on federal lands, increased regulations on the oil and gas industry, and banned drilling in ANWR, among many more anti-energy policies.
All of these decisions were made well before Putin invaded Ukraine. And, Biden’s inane argument that COVID-19 is causing inflation doesn’t pass the smell test. After all, how is that inflation was less than 2% throughout 2020, when the pandemic was at its peak?
As the PPI report notes, “Two-thirds of the broad-based increase can be traced to an 8.2% rise in the index for final demand energy. Prices for final demand goods less foods and energy and for final demand foods also moved higher, 0.7% and 1.9%, respectively.”
Furthermore, Biden’s $1.9 trillion American Rescue Plan and $1.1 trillion “infrastructure” law has flooded the economy with dollars, which reduces the value of existing dollars. As Milton Friedman said, “Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”
With almost three years left in his term and no signs that Biden is willing to reverse course on his anti-energy policies or his big government spending bonanza, it seems like inflation could be here to stay.
A few months ago, the Biden administration told us inflation was transitory. Then they blamed inflation on corporate greed. Now, they are succumbing to blaming it on Vladimir Putin. Who knows what they will point the finger at next.
President Truman was famous for having a sign that read, “The buck stops here.” In 1953, he referred to the phrase, saying, “The President—whoever he is—has to decide. He can’t pass the buck to anybody.”
It is time for President Biden to stop passing the buck and lying to the American people.
- Chris Talgo (email@example.com) is senior editor at The Heartland Institute.