It’s not the first time that Joe Manchin has gotten crosswise with the White House on messaging, but it might be the most dramatic example yet. The Biden team started off their record-inflation day by helpfully reminding everyone that criticism of Joe Biden amounted to lèse majesté, and maybe even treason:
— Jesse Lee (@JesseLee46) April 12, 2022
Uh … what?
The dotted line is Putin’s invasion of Ukraine.
Oh, wait, it’s not.
It’s Biden’s inauguration. pic.twitter.com/4JYsxGBqDd
— Brad Polumbo 🇺🇸⚽️ 🏳️🌈 (@brad_polumbo) April 11, 2022
It’s been a long, strange trip from “dissent is patriotic” and “the resistance” on the Left to “criticizing our Dear Leader is treasonous,” eh? The criticism in this case is well earned, especially for the gaslighting attempts to claim that inflation only became a problem when Vladimir Putin invaded Ukraine. As the above chart shows, annualized inflation went above the 2% target used by the Federal Reserve immediately after the passage of Biden’s bloated American Rescue Act in March 2021, and with the exception of a short pause in the late spring has been accelerating ever since.
No lesser figure that Barack Obama’s lead economic adviser made the same point in much more granularity. Jason Furman’s Twitter thread pointed out some reasons for limited optimism, but also emphasized that inflation in the US has not just been accelerating for a year, but that it’s outpaced EU inflation to boot:
U.S. inflation remains *much* higher than euro area inflation. This is the 12-month change in core HICP, a somewhat comparable measure for the two economies.
The US has consistently been ~4pp higher than Europe. That is a HUGE difference. pic.twitter.com/pboWfRluRR
— Jason Furman (@jasonfurman) April 12, 2022
If this was truly a “Putin price hike,” the Europeans would have been hit much harder by it. After all, they actually import large amounts of energy and food from the Russian Federation and its former satellites, including Ukraine itself. Instead, their inflationary wave is less than half of ours, and even the spike over the last two months has been lower.
Of course, Furman has insisted for months that the inflationary wave is in large part the responsibility of Joe Biden, not Vladimir Putin. Last week Furman was just as critical about the White House “ranting” over “corporate greed” as an explanation, too. That may make Furman a Putin stooge in the eyes of Biden’s Council of Economic Advisors, but that would be news to Obama and pretty much everyone else as well.
It would definitely be news to Joe Manchin, who wasted no time in shutting down that line of argument. Manchin also dropped a big hint that Chuck Schumer’s bid to pass more spending under reconciliation is probably dead as well:
Manchin: “It is a disservice to the American people to act as if inflation is a new phenomenon. The Federal Reserve and the Administration failed to act fast enough, and today’s data is a snapshot in time of the consequences being felt across the country.”
— Manu Raju (@mkraju) April 12, 2022
And in another bad sign for Democrats hoping to re-engage with Manchin over a new domestic package, he said: “Here is the truth, we cannot spend our way to a balanced, healthy economy and continue adding to our $30 trillion national debt.”
— Manu Raju (@mkraju) April 12, 2022
Can’t wait for the White House to explain how both Furman and Manchin are stooges of Putin for pointing out that inflation didn’t start at the end of February 2022. In the meantime, Manchin’s taking some heat for not voting for the price controls in the Build Back Better spend-o-rama, an argument for which the White House tried to provide pre-emptive support yesterday:
The White House has also repeatedly pointed to policies included in the Build Back Better package that Sen. Joe Manchin (D-W.Va.) killed late last year ― giving Medicare the power to negotiate prescription drug costs, providing subsidies for child care ― as possible solutions. But the chances of resurrecting portions of the package remain somewhere between nonexistent and murky.
Kildee, for his part, says the government should suspend the gas tax and allow a higher blend of ethanol in gasoline during the summer months. “Not everyone agrees with me on that,” he quickly added.
There was little unanimity among House Democrats on the issue. Rep. Veronica Escobar of Texas pointed to the child care and prescription drug negotiation provisions in the Build Back Better package.
All of these are gimmicks, not solutions. We spent a few years in the 1970s proving that price controls are a disastrous approach to inflation. Instead we need policies that encourage supply increases and flexibility, especially on oil and natural gas. The first step there would be to rescind Biden’s EO 13990, which re-imposed all sorts of red tape on exploration, extraction, and refining as part of Biden’s explicit efforts to shut down any new drilling in the US. A dynamically elastic domestic oil and natural gas supply would moderate prices and withdraw a significant part of the exponential impact of fuel prices on consumer goods and services. Longer term, we need to right-size our budget and income to produce actual balanced budgets, including entitlement spending, to eliminate monetary expansions like we saw over the last dozen years.
That’s not playing Putin’s stooge. It’s sound advice, which is why it sounds so foreign to Biden and his team.