Psaki’s ‘No Economist’ Assertion Draws Some Inflation Dissenters

It costs more to pay rent each month and to fill up a tank of gas every week and to put food on the table every day. So, at a moment when the dollar doesn’t go as far as it once did, should Americans worry that injecting another $1.85 trillion into the economy might increase inflation?

No, Jen Psaki told Peter Alexander this week. And why not? Well, the White House press secretary explained to the NBC News correspondent, “because no economist out there is projecting that this will have a negative impact on inflation.”

Of course, that isn’t true. There are many economists out there and some of them do warn that the Build Back Better plan will further increase the prices that dog consumers and can doom the careers of politicians. But the existence of economists with views contrary to those held by the president’s National Economic Council isn’t entirely the point. At issue more broadly is the fulfillment of something Joe Biden said back in April 2020.

“Milton Friedman,” he said as a candidate, “isn’t running the show anymore.” And nothing could be truer now that Biden is the president.

As the first year of his administration nears completion, inflation has emerged as an unwelcome accompaniment. It has not hit the double-digit levels that propelled Friedman, the late Nobel Prize laureate who warned about the dangers of an unchecked money supply, to prominence in the late 1970s. But consumer prices jumped 6.2%, years over year, in October, the biggest such increase in three decades.

“There’s no doubt inflation is high right now. It’s affecting Americans’ pocketbooks. It’s affecting their outlook,” Brian Deese, director of the National Economic Council, told Chuck Todd on NBC’s “Meet the Press” Sunday. “But it’s important that we put this in context. When the president took office, we were facing an all-out economic crisis.”

The White House argues that those inflation numbers are transitory and will eventually come down. The temporary pain that consumers feel, they contend, is the result of pent-up demand and kinks in the supply chain, not because of excesses in government spending. Two of the president’s other economic advisers, Jared Bernstein and Ernie Tedeschi, dismissed early inflation warnings and predicted that price increases “should fade over time as the economy recovers from the pandemic.” That was in April.

But lingering inflation hasn’t lessened the administration’s appetite for spending— witness the $1.2 trillion infrastructure plan signed into