EDITORIAL: The DC Hunger Games: Elites celebrate while economy crumbles
Someone forgot to let inflation know that Joe Biden signed the Inflation Reduction Act. If only it were that simple.
On Tuesday, the Department of Labor announced that the consumer-price index increased 8.3 percent in August compared to a year ago. That means inflation is still raging out of control, even though the monthly inflation rate is lower than the 9.1 percent mark in June. It’s important to remember that inflation is cumulative. The August 2022 inflation rate builds off the 5.3 percent inflation rate from August 2021.
Core inflation, the rate excluding energy and food, which are more volatile, increased. It was 6.3 percent last month, up from the 5.9 percent rate in June and July. Month over month, core CPI increased 0.6 percent. That’s twice the rate from July.
This means inflation isn’t just coming from high gasoline and food prices. It’s permeated throughout the whole economy. Consumers don’t need number crunchers to tell them that. They’ve been struggling to pay their bills for months.
These numbers were worse than analysts expected. That means the Federal Reserve is all but certain to continue hiking interest rates. It may even increase rates a full percentage point at its next meeting. These factors sent the stock market tumbling Tuesday.
This didn’t dampen the mood at the White House.
“Exactly four weeks ago, I signed the Inflation Reduction Act into law,” Mr. Biden tweeted Tuesday. “So today, we’re celebrating.”
Celebrate they did. The Biden administration threw a party in front of the White House, including a live musical performance. A who’s who of politicians, activists and business leaders gathered to applaud the Democrats’ spending bill. Mr. Biden and other Democratic leaders gave speeches before the adoring crowd.
Perhaps, Mr. Biden doesn’t realize that what matters is a bill’s details, not its title. Inflation is generally thought of as too much money chasing too few goods. Pumping hundreds of billions of dollars into the economy exacerbates that problem. That’s true even when the spending is called the “Inflation Reduction Act.” It’s telling that so many Democrats are more excited about how the bill will supposedly combat global warming. Not exactly what one would expect from an anti-inflationary measure.
The country has already seen what excessive government spending does, too. In 2021, Democrats’ American Rescue Plan overheated a naturally recovering economy, producing today’s runaway inflation.
Tuesday’s juxtaposition could have come straight from “The Hunger Games.” The political elite are whooping it up in the capital city while the country’s citizens endure a crumbling economy.