No, Inflation Isn’t The Biggest Story Of The Biden Economy. Steve and Karen welcome Dean Baker, one of the nation’s leading economists, and friend of the show Steve Segner to discuss the economy and inflation. When asked whether inflation is permanent or transitory, Baker says though it has lasted longer than expected, in his mind it’s still very much transitory. He says that re-opening from the pandemic has created increased demand and big backlogs in supply throughout a number of sectors. That pushed up prices, not just in the U.S., but in Germany, France and the U.K.
“Is there evidence that it’s coming to an end? To my view, there’s a lot,” says Baker. “…we’ve seen big increases in inventory at both the retail and wholesale level. On average [the stores] are pretty well stocked right now. That should put downward pressure on prices.” He also notes that indices show the cost of shipping is trending downwards and used car prices have been falling sharply in the last couple of months.
As for fuel prices, Baker says that the price of oil is a world price. It’s not something that the U.S. can impact alone. He goes on to mention that blaming inflation on Biden is like blaming a governor for people being homeless following a hurricane. Biden is not responsible for the once-in-a-century pandemic. He can only try to deal with its aftermath.
Baker explains that the media has played a really big role in the issue, saying they have been incredibly negative when talking about the economy under Biden. “I’ve been struck that whenever they talk about economic issues, it’s always about inflation. We got the jobs report just last Friday and all the stories were, ‘Oh, good jobs report. But what about inflation?’ We had a really extraordinary jobs report – the unemployment rate down to 3.6 percent…it barely got mentioned. They turned over and immediately began talking about inflation.” Baker adds that part of the public’s confusion about the economy is partly the result of lies told by Republicans.
Baker points to a recent poll, saying, “I saw one poll where they asked…whether we created more jobs than we lost last year or we lost more jobs than we created. And a clear majority thought we lost more jobs than we created. Well, guess what? 2021 was the best year for job growth ever!”