Orszag misses the mark on what caused the recent inflation (“The Real Story of Inflation,” Nov. 14). While he’s right that it wasn’t just all Biden’s stimulus"
He misses the mark becasue none of it was becasue of the stimulus. Fiscal policy shifts resources between uses. Only the Fed affects aggregate demand.
Blinder was perfectly right not to mention inflation in his analysis of Biden-Harris. Presidential Administrations do not (although Trump may aspire to) run macroeconomic policy. The Fed properly created inflation to help the economy recover from the COVID/Putin shocks. If they created more than necessary (as I believe it did), that is its bad.
Harris was an not entirely innocent bystander becasue the Biden Administration from the beginning failed to distance itself from macroeconomic outcomes and apparently _actually believed_ that the Trump-Biden deficits affected aggregate demand! An administration cannot claim undeserved credit for recovery without getting unfairly blamed for inflation.
Orszag misses the mark on what caused the recent inflation (“The Real Story of Inflation,” Nov. 14). While he’s right that it wasn’t just all Biden’s stimulus"
He misses the mark becasue none of it was becasue of the stimulus. Fiscal policy shifts resources between uses. Only the Fed affects aggregate demand.
https://thomaslhutcheson.substack.com/p/inflation-supply-demand-neither
Blinder was perfectly right not to mention inflation in his analysis of Biden-Harris. Presidential Administrations do not (although Trump may aspire to) run macroeconomic policy. The Fed properly created inflation to help the economy recover from the COVID/Putin shocks. If they created more than necessary (as I believe it did), that is its bad.
Harris was an not entirely innocent bystander becasue the Biden Administration from the beginning failed to distance itself from macroeconomic outcomes and apparently _actually believed_ that the Trump-Biden deficits affected aggregate demand! An administration cannot claim undeserved credit for recovery without getting unfairly blamed for inflation.