The editors of the Washington Post accuse President Biden of “magical thinking”:
The White House has been suffering from magical thinking on inflation, and, sadly, that continues.
For much of last year, the Biden administration wrongly told the American public that rising prices would be short-lived. When it became clear that inflation would not come down on its own, the White House began a blame game. One of its favorite talking points is to pin inflation on greedy corporations for hiking prices too much. That just doesn’t add up. Corporations did not become far more greedy in the past few months. What’s really going on is basic economics: There’s high demand for a lot of stuff and inadequate supply because of the pandemic, the war in Ukraine, China’s lockdown, crushed supply chains and not enough workers. That’s a classic recipe for higher prices.
They conclude:
It’s wishful thinking that inflation is going to come down much by Election Day. To show voters he is on top of the problem, Mr. Biden needs to do more than blame someone else for high prices.
Yesterday I demurred from linking to the editors’ of the Wall Street Journal’s characterization of President Biden as the “George Costanza president”—everything he thinks he should do, he should do the opposite instead.
I wish the WaPo editors had elaborated on what they think the remedy is. I think that the focus of regulation needs to be redirected, there need to be greater incentives for business investment, fewer incentives not to work, and, difficult to achieve but most important of all, confidence in stability of policy. I presume the WaPo editors’ preference is already in process—a quarter million people are crossing our southern border each month. Will those additional people primarily allow us to increase production or will they primarily increase demand? I think the latter.
