Joe Biden’s inflation-fighting efforts have largely been made up of jawboning corporate executives about “profiteering,” blaming Russia, and trotting out surrogates to tell the American people it’s not his fault.
Instead of arguing about fault, why doesn’t Biden just fix it?
Related: Yes, It’s Biden’s Inflation
Fixing inflation is a difficult path, to be sure. It would not be popular in his own party. And it would be a hard sell to most Americans regardless of party.
But it’s better than flashing smoke and mirrors at the people, pretending to be doing something about inflation when, in fact, Biden knows that the only way to fight the beast is to inflict pain on the victim.
The Federal Reserve must lead the charge of reducing inflation. After dumping $4.8 trillion into the economy during the recession and continuing to buy mortgage-backed securities as recently as two months ago, the Fed is finally taking inflation seriously by raising rates and reducing its balance sheet. This will be painful but necessary.
Yet much more can be done. President Biden continues to insist that he is working tirelessly to reduce inflation, but his administration has worsened the problem and refused to make the difficult choices that may anger its allied interest groups.
The first thing that should be on Biden’s agenda is putting a halt to all talk of passing a “Build Back Better” bill. It was the uncontrolled spending spree that let loose the inflation monster in the first place, and piling on another two trillion dollars — especially since the economy appears to be growing and unemployment is getting better — is just madness.
The pandemic is over. People are going to continue to get sick. Some will die. But pretending we need to spend another two trillion dollars to “recover” from the pandemic or “stimulate the economy” because of the pandemic is lunacy.
Second, reverse other inflation-causing policies. The Biden administration has hiked tariffs on Canadian lumber and added tariffs on other building materials. It renewed President Donald Trump’s tariffs on solar panels, extended the tariffs on Chinese imports and imposed tariff quotas on steel. It imposed Buy American provisions raising the cost of infrastructure and is working to expand Davis-Bacon policies that raise the cost of government contracts.
Davis-Bacon or prevailing wage regulations are a sop to the unions since the Labor Department picks what wages are “prevailing” in a specific area. They are invariably union wages.
But the biggest problem that Joe Biden could fix almost immediately would be to take control of our ports and begin to untangle a backlog of shipping containers created by many factors but exacerbated by union rules that made the backlog inevitable.
Finally, clear up the shipping backlog at our ports. This requires addressing the local unions that have long limited the number of workers and hours and fought productivity-enhancing automation and technology (such as automated cranes) out of fear it would cost union jobs.
A real inflation-fighting program would anger the far left, labor unions, and every interest group in America by cutting the government gravy train. But if Congress were to do that, it’s possible that prices would begin to moderate in a matter of months and cool inflation permanently in a few years.
It’s been done before. There’s no reason we can’t do it again.