Let me direct your attention to a piece written, a little over a week ago, by the august Editorial Board of The Washington Post. The headline reads:
Congress and Biden have to help the Fed fight inflation
Note that the Board — in all its august-ness — is putting this imperative out there, without a shred of irony, two weeks before a midterm election. Even as Republicans everywhere are screaming “inflation” — with multiple exclamation points — in all media, all the time. Even as they pair that word with fraught adjectives of every stripe — ‘runaway,’ ‘relentless,’ ‘record-breaking,’ ‘crippling.’ Even as they make it into a bogeyman to terrify their idiot base into voting democracy out of office.
But there’s no Republican argument so pathetic that the Post can’t give it voice. To the Board, these midterms are just one more clickbait-friendly, revenue-generating “horse race.” Nothing matters except who’s ahead, who’s behind, who’s fading, and who’s surging.
And of course it’s not just the Post. I could have zeroed in on any number of pieces in The New York Times, or in any of dozens of “mainstream” news outlets now hyperventilating about inflation.
This is just the latest variation on the “Democrats in disarray” theme. These so-called journalists simply cannot write the word ‘inflation’ without putting ‘Biden’ or ‘Democrats’ — or both — in the same sentence. Usually in the headline. Usually implying that both are somehow falling short.
In this particular article, the Board begrudgingly admits that the administration has done a reasonable job on the economy. That they’ve played a bad hand fairly well. That they can hardly be faulted for the current spasm of inflation. And that Republicans are “not offering much in the way of a concrete anti-inflation plan” — a grotesque understatement.
But despite all this faint praise, the Board nonetheless feels compelled to call on Biden — again, two weeks before the midterms — to use fiscal policy to “help the Fed.”
As if a coherent fiscal policy were possible in the next two weeks. As if responsible stewardship of the economy weren’t being sabotaged at every turn. As if the nonstop lies coming from the entire right-wing media complex would allow for any sober discussion of fiscal options. As if there were actually a functioning legislature that could weigh those options.
I won’t subject you to the whole article, which, despite the disingenuousness of the headline, makes a reasoned but pompous case for Congress engaging in fiscal legislation, aimed at sanding down the rough edges of the Fed’s monetary policy.
Let’s briefly review the difference between monetary and fiscal policy.
Monetary policy is about the Federal Reserve. It’s about the Fed tinkering with the money supply — usually by raising or lowering interest rates — so the economy can adjust to changing conditions. This is necessary, but not sufficient, since interest rates are a sort of sledge-hammer — minor adjustments can have major consequences. Raising rates too high might slow inflation, but it could also trigger a recession, a prospect now being wildly oversold by the media to stir up controversy in the final stretch of the midterm horse race.
Fiscal policy is a different animal. It’s mostly about Congress, about using legislative action to heat up or cool down the economy. When there’s a slump, Congress can approve new public projects — infrastructure, for example — to inject money into the hands of businesses and consumers. When there’s a boom, new legislation can be tailored to dampen the effects of the resulting inflation. The trouble with fiscal policy, effective as it can be, is that it presupposes a willingness of legislators to legislate. Good luck with that.
Generally speaking, monetary and fiscal policy should be working in tandem to keep the economy on an even keel — something we all want, but can’t always have.
Or, as the article acknowledges:
…[M]any factors beyond Mr. Biden’s or Congress’s control fueled inflation — especially Russia’s war on Ukraine… [W]hat we are calling for is reasonable fiscal discipline. Until inflation is defeated, fiscal policy should push in the same direction as the Fed, with no new major spending that isn’t fully or mostly paid for with higher taxes or reduced spending elsewhere in the budget.
Major spending? Higher taxes? What world do they live in?
Not that there’s anything wrong with what they’re saying, just with the context in which they’re saying it. The Post knows perfectly well that fiscal policy barely exists anymore. It’s yet one more tool of modern government that’s been effectively destroyed by Republicans. The accomplishments of the Biden administration — which are damn near miraculous — might just have been the last gasp of real fiscal policy, and it never would have happened without Democratic control of both houses of Congress. Both parties are supposed to be interested in the well-being of the nation’s economy, but only one actually is.
The Post is also fully aware that Republicans stonewall all legislation, no matter how sensible, how urgent, or how badly their own constituents need it. They assume their voters are stupid, and they’re seldom disappointed.
It’s not like inflation isn’t a real story, and a real cause for concern. It’s just that it’s the only story Republicans want to tell, they're telling it dishonestly, and mainstream news outlets are dishonestly helping them tell it.
As national issues go, inflation is emphatically not on a par with, say, the trashing of reproductive rights, or the accelerating pace of climate catastrophes, or the deliberate demolition of democratic institutions.
And yet, “responsible” mainstream journalists are feigning an urgency that doesn't exist, just to keep the horse race exciting. If democracy should happen to die in the resulting darkness, that’s just collateral damage.
So yes, we can expect prices to go up for a while. But inflation, like most economic issues, is famously oblivious to politics. It has a life of its own, and it answers to neither party.
Should it be part of an honest debate about real issues? Absolutely, if there were such a thing.
But in the meantime, what’s most galling about this ginned-up hysteria is the media’s complicity in turning inflation — an important but marginal issue — into The End of Life as We Know It.
Just so Democrats can be blamed for it.