Follow-Up on the Inflation Spike: Too Much Credit or Blame for Economic Policy

In popular opinion in America, there is always too much credit or blame of the incumbent President of the United States for all economic matters, which ignores the role of other parts of the federal government, namely the Congress and the Federal Reserve, (the central bank with the main authority to guarantee the stability of the currency). The Trumpified Republican Party and some Trumpist conservatives are blaming inflation on President Joe Biden and the Democrats, despite the bipartisan and external causes that I enumerated in my three-post series on the current increase of inflation (price increases) earlier this month. I also note the reasonable debate over whether the Trump-appointed Federal Reserve Chairman was late in cutting interest rates to slow economic growth and thus the current spike of inflation, but generally the focus is always on the President. There is also too much credit or blame for the federal government particularly, which ignores the role of the 50 States and of international governments, and for government in general, which ignores the role of other internal or external causes, like natural disasters, labor troubles, innovations, etc. Crediting or blaming the incumbent president for temporary economic conditions is also foolish politics, as conditions can change within months. The Federal Reserve will tame inflation relatively within several months and then the party in power will have been set up unintentionally by its opponents who blame it for inflation to claim the credit, whether it deserves it or not. But the Fed’s monetary policy will be a solution that reduces economic growth, which the opposition party will then complain about. What goes around comes around in such politics. Liberals and Democrats blamed George W. Bush in 2005 for the spike in oil prices that were a side-effect of greater world economic growth, which increased demand, even as the American economy prospered and now they are receiving similar criticism. It would be both better policy and better politics if politicians across the political spectrum educated voters better on economics, fiscal and monetary policy.