{"id":1038019,"date":"2021-11-20T21:14:25","date_gmt":"2021-11-21T02:14:25","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1038019"},"modified":"2021-11-20T21:14:29","modified_gmt":"2021-11-21T02:14:29","slug":"psakis-no-economist-assertion-draws-some-inflation-dissenters","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/psakis-no-economist-assertion-draws-some-inflation-dissenters\/","title":{"rendered":"Psaki\u2019s \u2018No Economist\u2019 Assertion Draws Some Inflation Dissenters"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fpsakis-no-economist-assertion-draws-some-inflation-dissenters%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1038019&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>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\u2019t go as far as it once did, should Americans worry that injecting another $1.85 trillion into the economy might increase inflation?<\/p>\n<p>No, Jen Psaki told Peter Alexander this week. And why not? Well, the White House press secretary <a href=\"https:\/\/www.whitehouse.gov\/briefing-room\/press-briefings\/2021\/11\/15\/press-briefing-by-press-secretary-jen-psaki-november-15-2021\/\">explained<\/a> to the NBC News correspondent, \u201cbecause no economist out there is projecting that this will have a negative impact on inflation.\u201d<\/p>\n<p>Of course, that isn\u2019t 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\u2019s National Economic Council isn\u2019t entirely the point. At issue more broadly is the fulfillment of something Joe Biden said back in April 2020.<\/p>\n<p>\u201cMilton Friedman,\u201d he said <a href=\"https:\/\/www.politico.com\/news\/2020\/04\/25\/joe-biden-green-stimulus-207848\">as a candidate,<\/a> \u201cisn\u2019t running the show anymore.\u201d And nothing could be truer now that Biden is the president.<\/p>\n<p>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.<\/p>\n<p>\u201cThere\u2019s no doubt inflation is high right now. It\u2019s affecting Americans\u2019 pocketbooks. It\u2019s affecting their outlook,\u201d Brian Deese, director of the National Economic Council, told Chuck Todd on NBC\u2019s \u201cMeet the Press\u201d Sunday. \u201cBut it\u2019s important that we put this in context. When the president took office, we were facing an all-out economic crisis.\u201d<\/p>\n<p>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\u2019s other economic advisers, Jared Bernstein and Ernie Tedeschi, dismissed early inflation warnings and predicted that price increases \u201cshould fade over time as the economy recovers from the pandemic.\u201d <a href=\"https:\/\/www.whitehouse.gov\/cea\/blog\/2021\/04\/12\/pandemic-prices-assessing-inflation-in-the-months-and-years-ahead\/\">That was in April.<\/a><\/p>\n<p>But lingering inflation hasn\u2019t lessened the administration\u2019s appetite for spending\u2014 witness the $1.2 trillion infrastructure plan signed into<\/p>\n","protected":false},"excerpt":{"rendered":"<p>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\u2019t 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, \u201cbecause no economist out there is projecting that this will have a negative impact on inflation.\u201dOf course, that isn\u2019t 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\u2019s National Economic Council isn\u2019t entirely the point. At issue more broadly is the fulfillment of something Joe Biden said back in April 2020.\u201cMilton Friedman,\u201d he said as a candidate, \u201cisn\u2019t running the show anymore.\u201d 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.\u201cThere\u2019s no doubt inflation is high right now. It\u2019s affecting Americans\u2019 pocketbooks. It\u2019s affecting their outlook,\u201d Brian Deese, director of the National Economic Council, told Chuck Todd on NBC\u2019s \u201cMeet the Press\u201d Sunday. \u201cBut it\u2019s important that we put this in context. When the president took office, we were facing an all-out economic crisis.\u201dThe 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\u2019s other economic advisers, Jared Bernstein and Ernie Tedeschi, dismissed early inflation warnings and predicted that price increases \u201cshould fade over time as the economy recovers from the pandemic.\u201d That was in April.But lingering inflation hasn\u2019t lessened the administration\u2019s appetite for spending\u2014 witness the $1.2 trillion infrastructure plan signed into law this week or the $1.85 Build Back Better plan that\u2019s still pending in Congress. The White House has shooed away concerns in recent weeks by pointing to a letter from 17 Nobel laureates who predict that the spending \u201cwill ease longer-term inflationary pressures\u201d and to analysis by Moody\u2019s Investor Services that reached the same conclusion.\u201cThey\u2019re all wrong,\u201d said Steven Hanke, a professor of applied economics at Johns Hopkins University. He doesn\u2019t deny that supply chains are backed up or that there may be pent-up demand. But Hanke told RealClearPolitics that those are \u201cad hoc excuses.\u201d Inflation is being driven by \u201cthe money supply which has increased by over 35% since COVID, an unprecedented explosion since World War II.\u201dAlong with John Greenwood, chief economist at the investment management company Invesco in London, Hanke likens the situation to a bathtub with three drains. The first two drains are economic growth and savings. In the absence of inflation, money that flows into the tub easily flows out of the tub through those two drains. \u201cBut if more money is flowing in than out,\u201d the two reasoned in a recent Wall Street Journal op-ed, \u201cthe level of money rises. It will eventually reach the overflow, which is the inflation drain.\u201dAn alumnus of the Reagan administration and a fervent supply-sider, Hanke notes that between December 2019 and August 2021, the supply of dollars in circulation grew by $5.5 trillion, \u201ca stunning 35.7% increase in only a year-and-a-half, driven primarily by the Federal Reserve\u2019s purchase of Treasury and mortgage-backed securities.\u201dEnter Biden and his human-infrastructure package. In Detroit on Wednesday, the president argued that his plan \u201cis fully paid for\u201d and does not increase the deficit \u201cone single cent.\u201d The spending plan would be paid for by new taxes on top earners who make more than $400,000, the administration insists. That might be true, if the bill that reaches Biden\u2019s desk includes those tax increases, an unpopular possibility currently being debated in Congress. But that\u2019s a big if: Sen. Joe Manchin, a linchpin for passage in the upper chamber, has repeatedly expressed his concerns.There are other snags. As the New York Times reports, the head of the Congressional Budget Office warned Monday that cracking down on tax evaders would produce about $120 billion, not the $400 billion Biden is relying on to cover some of the spending. While a full formal analysis is still expected, Hanke and others argue that deficit spending \u201cmakes the Fed\u2019s job a lot more difficult\u201d because when the Treasury Department issues new bonds to cover that debt, \u201cwhat are they going to do? Say, \u2018Oh, no \u2014 we\u2019re not going to buy anymore.\u2019 They are buying those bonds. That\u2019s why the balance sheet of the Fed gets bigger and bigger. And that\u2019s why the money supply gets bigger and bigger.\u201dThe notion that increased government spending doesn\u2019t carry the risk of inflation, said Michael Jay Boskin, an economics professor at Stanford University\u2019s Hoover Institution, \u201cis economically illiterate.\u201d Increased government spending adds to the total demand for goods and services, he added, \u201csuch that we are risking inflation, and the Biden administration seems to be trying divert attention. There is a risk that inflation may become entrenched. It\u2019s hard to imagine a worse outcome than an inflation spiral.\u201dChairman of the president\u2019s Council of Economic Advisers from 1989 to 1993, Boskin notes that \u201ca very large fraction\u201d of the relief payments the federal government sent out in 2020 and 2021 was either saved or has yet to be spent. \u201cThat is a lot of government spending floating around the system now in the pockets of consumers and the budgets of state and local governments,\u201d waiting to further flood the economy.On the question of inflation, illustrations of the concept abound. A flood of dollars chasing too few goods. The monetary supply as an overflowing bathtub. But anti-tax conservative Stephen Moore prefers a more colorful one: \u201cdumping gasoline on a forest fire.\u201d A member of former President Trump\u2019s economic task force, Moore questions the Biden administration\u2019s explanation for inflation, specifically the idea that the problem is pent up demand post-pandemic. \u201cBecause if that\u2019s the case, why did we spend $2 trillion earlier this year,\u201d he said of the American Rescue Plan. \u201cIt doesn\u2019t make any sense.\u201dThe White House likely won\u2019t heed his warnings or those of any naysayers. Analysis from Reagan and Bush alumni \u2014 let alone Trump advisers \u2014 certainly isn\u2019t in fashion in this administration, especially since, as Biden noted more than a year ago, Milton Friedman \u201cisn\u2019t running the show anymore.\u201dThe views expressed in this piece are the author\u2019s own and do not necessarily represent those of The Daily Wire.Philip Wegmann, RCP Staff.The Daily Wire is one of America\u2019s fastest-growing conservative media companies and counter-cultural outlets for news, opinion, and entertainment. Get inside access to The Daily Wire by becoming a member.<\/p>\n","protected":false},"author":131,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1038019","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1038019","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/131"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1038019"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1038019\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1038019"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1038019"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1038019"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}