Harris calls 2.9% inflation a victory

Harris calls inflation of 2.9% a victory

– By Howard Sierer –

On August 14, the Bureau of Labor Statistics reported that the annual inflation rate was 2.9% in July. The White House claimed, “Today's report shows that we continue to make progress in beating inflation and reducing costs for American households.” Both claims are patently false.

The Biden-Harris administration has been fueling inflation instead of fighting it for over three years. When they took office in January 2021, the economy was growing at 6.4%, real GDP had returned to its pre-pandemic peak, and inflation was running at an annual rate of 1.4%. Not wanting to let Republicans take credit for the robust post-pandemic economic recovery, Biden-Harris and congressional Democrats passed the so-called $1.9 trillion Rescue Plan for America, ignoring inflation warnings from Obama's economic advisers.

I'm including Vice President Harris to underscore her direct role in this legislative fiasco. The Senate was split 50-50 between Democrats and Republicans in 2021. Not a single Republican voted for the bill, so Harris, as President of the Senate, cast the tie-breaking vote.

In blatant disregard of the already obvious inflationary consequences of their actions, Biden and Harris passed the hilariously named Inflation Reduction Act of 2022, which provides for additional spending of $438 billion. Here, too, Harris was the deciding vote.

So is today's rate of 2.9% acceptable? Not if statements made by Biden and Harris in April 2021 are to be believed. Their administration reported annual inflation of 2.6% that month, which caused great concern at the time and forced government officials to try to explain it. The Washington Post reported in April 2021: “Although inflation is slowly rising, federal officials have stressed that the increase is likely to be short-lived as parts of the economy begin to return to normal after more than a year of pandemic.”

Economists and Republican lawmakers warned that the government's excessive and unnecessary spending would overstimulate the economy and lead to inflation. Biden-Harris apologists in the New York Times assured their readers: “Today's data reflect hindsight information, which is not necessarily a sign of what lies ahead. Don't consider the hindsight information in the new report as evidence that these inflation warnings will come true.”

Since then, inflation rates have reached as high as 9.1 percent and, including last month, have been above 2.6 percent for 40 consecutive months.

Biden and Harris' outrageous spending spree pumped trillions of dollars into the economy, creating a massive surplus of dollars chasing available goods and services. The resulting inflation once again confirmed Nobel Prize winner Milton Friedman's famous statement: “Inflation is always and everywhere a monetary phenomenon.”

The Federal Reserve is responsible for controlling the money supply and, fortunately, is completely independent of the political influence of the White House. When the Fed realized – unfortunately a year too late – that rising inflation was not a “transitory” condition as Biden-Harris claimed, it began to apply the monetary brakes, raising interest rates in unprecedented increments of up to 0.75% by 2023 starting in spring 2022. These rate hikes and the Fed's accompanying money supply cuts deserve credit for bringing down inflation from 9.1% in June 2022.

So how should we feel when Harris tells us she's winning the battle on inflation? As measured by the Consumer Price Index, prices were 20.25 percent higher in July than in January 2021, when Biden-Harris took office. During the same period, the average hourly wage of all private sector workers rose 17.2 percent.

The facts don't lie: Biden and Harris have left the average American worker 3% worse off than they were when they entered office. And they have the nerve to claim they are “cutting costs” and we should be grateful for their progress.

If you liked the last three and a half years, vote for Kamala Harris in November. She promises more of the same for the next four years, a long list of things she and Biden failed to accomplish when Republicans took over the House in 2023. Forbes says, “Harris' economic agenda is largely in line with Biden's economic program.”

In other words, Harris is planning to repeat all the mistakes made by Biden and Harris over the last four years. My advice if she is elected: tighten your belt and stock up on essentials; expect prices to continue to rise faster than your salary.