The false debate about inflation is made immaterial by economist Jason Furman. One should err with some inflation over unemployment.
Inflation rather than unemployment?
All In’s Chris Hayes pointed out that the Biden administration’s economic recovery has leap-frogged overall estimates. President Biden recently uncharacteristically bragged about it.
“This morning’s report caps off my first year as president,” Biden said. “And over that period, our economy created 6.6 million jobs, 6.6 million jobs. You can’t remember another year when so many people went to work in this country. There’s a reason. It never happened.”
Economist Jason Furman continued his messaging a step further. He justified the possibility of short-term inflation.
“You know, you could have a situation in which prices are low, and inflation is low, and we’ve got unemployment at seven percent, at which point everyone would be complaining about unemployment obviously and not about inflation. But it seems to me like this is the better problem to have, which is part of the key to my understanding of the macroeconomic targeting that happened here. I’d much rather have a low unemployment rate and a high inflation rate than the opposite.”
But let us be clear. Except for select items connected to the supply chain failure caused by the greed and shortsightedness of public sector corporations, there are no shortages to justify price increases on most products. And the President alluded to that. With a few statements in his speech, the President slammed the monopolistic nature of our corporations.
Do not allow the false narrative to take hold. Shortages are not responsible for today’s price increases. Is there any product you want that you are unable to get? If the answer is “no,” then increased prices, aka inflation, are caused by pricing power.
