Inflation Report Causes Atlantic Magazine to Sit Shiva for Bidenomics

The May inflation report, released Friday, revealed that the consumer price index rose 8.6%. This is the highest monthly growth since December 1981. AtlanticThe magazine appeared to be in a state that bordered on panic, as if it was going into mourning.

Gone were the sort of heady days of last summer when administration hacks, quoted approvingly by much of the liberal media, would smugly declare that any increase in inflation was merely “transitory.” These times of self-reassurance are now replaced by the despair that Friday’s title describes. Atlantic reveals, “How Did They Get Inflation So Wrong?”

You can almost hear a very sad rendition of “Taps” playing in the background as author James Surowiecki delivers an article that sounds like a sad obituary for Bidenomics.

In March 2021, when inflation hawks were arguing that the Biden administration’s $1.9 trillion stimulus plan was going to overheat the economy, Yellen called the risk of inflation “small” and “manageable,” and a couple of months later said, “I don’t anticipate that inflation is going to be a problem.” She wasn’t alone. For much of 2021, Federal Reserve Chair Jerome Powell said that he thought inflation would be “transitory,” and even as inflation rose above 6 percent, the Fed kept interest rates near zero. Its initial interest rate hike occurred in March 2022.

The author didn’t suggest Powell or Yellen be replaced, as they had shown complete ineptitude. 

The inflation report on Friday has brought additional sorrow:

Along the way, that thing Yellen thought was not going to be a problem became a huge one—not least, politically. Indeed, with today’s news that inflation in May was 8.6 percent (previously at 8.3 percent), it is arguably the biggest problem that the Biden administration faces—high prices are overshadowing pretty much everything else about the U.S. economy. Only 3.6 percent of the population is unemployed. Last week, Labor Department reported that 390,000.00 more jobs were added in the United States. The average gasoline price is now at $5 per gallon.

Surowiecki’s loss caused him to be more vulnerable and made a shocking admission.

…the Biden administration and the Fed were, in some sense, fighting the last war—that being, in this case, the Great Recession of 2008–09. The U.S. economy experienced a slow recovery after the severe economic decline that occurred over the past two years.Average GDP growth between 2009-2016 was about 2 percent annually. The unemployment rate, at nearly 11% in October 2009 was higher than it was four years later. However, median earnings have increased slowly.

Under Ben Bernanke the Fed had reduced interest rates to nearly zero and kept them there. They also tried to inject money into the economy with the acquisition of many assets. This was called quantitative ease. These measures did keep the Great Recession from becoming another Great Depression, but it wasn’t until 2016 that the economy really took off.

What happened to slow GDP growth in 2016? And, what is it that “the economy truly took off” following that year’s events? Surowiecki might be able to answer that question, which he mentioned after the Bidenomics funeral.