Carney: Leftwing Economists Say Inflation Is 'A Really Good Sign'

John CarneyNovember 11, 2021

A far-left advocacy group wants to convince you to joyously embrace the decades-high inflation currently gripping the U.S. economy.

“Is inflation running rampant? No,” says Rakeen Mabud, identified chief economist of an outfit called the Groundwork Collective that is sponsored by a dark money leftwing funding group, in a video posted to Twitter by a different leftist group called Invest in America. “So these one-time price increases are the result of returning consumer demand and a sign of economic recovery.”

She goes on to say that inflation is a “really good sign.”

Anne Price, a colleague at yet another leftwing pressure group called the Insight Center, appears in the video to say that the “reality is that mildly elevated inflation is actually a signal that things are going well.”

REMINDER: Inflation is always complicated, often harmless, and sometimes even a good thing! But don’t take it from us — here’s @Rakeen_Mabud, @AnnePriceICCED, and @Jhumpa_B debunking some of the GOP’s inflation disinformation: pic.twitter.com/SQvr7MdbWX

— Invest in America (@InvestNowUSA) November 10, 2021

Mildly elevated? Inflation is running at the worst level in more than three decades and several times the Fed’s target of two percent. The price of a used car is up more than 25 percent. The price of meat is up 14.5 percent.

One-time price increases? Inflation has been running above the Federal Reserve’s two percent target for eight consecutive months. Business expectations for inflation in the year ahead are at their highest point in data going back a decade. Mark Zandi, the Biden-supporting chief economist at Moody’s Analytics, recently said inflation will remain high until at least next November.

The GOP’s inflation disinformation? The figures showing decades-high inflation come from the Department of Labor, currently headed by Biden appointee Martin Walsh. Atlanta Fed president Raphael Bostic recently declared that it is clear inflation is not transitory.

Carney: Leftwing Economists Say Inflation Is 'A Really Good Sign' 1

One time price increases?

We’ve been warning for months that the Biden administration and Fed officials had it wrong when they said inflation would be transitory. Now even Joe Biden has realized that downplaying inflation is a loser and is now admitting “it’s a real problem.”

The irony of this campaign coming from self-styled “progressives” is that inflation’s toll gets harder the further down you go on the income scale. As I explained back in April:

Inflation weighs particularly hard on those at the lower end of the income scale. A much larger share of income goes into current consumption, so higher prices squeeze budgets more. Meager savings are much more likely to be in low-interest paying bank accounts than in equities or inflation hedged investments, so they are vulnerable to to the deterioration of the buying power of the U.S. dollar…

The lower third of household incomes spend more on transportation than the upper two thirds, according to long-running data from Pew Charitable Trusts. In 2019, transportation costs—of which the price of gasoline is a major component—accounted for 17 percent of all household expenditures, according to Statista, the second biggest category after housing.Food is third in line after transportation and housing, accounting for 13 percent of household spending.

The wealthiest Americans—including the folks who back these leftwing groups—have most of their wealth in stocks and real estate, asset classes that tend to do very well in inflationary periods. You probably have noticed that home prices and stock prices are hitting record highs.

What I wrote in April is even clearer today:

Inflation, particularly food and gasoline price hikes, acts as a regressive tax, hurting low-income households more than higher-income households. In fact, higher income households are likely net beneficiaries of inflation.

Biden, who won office on a promise to combat inequality and only hike taxes on very wealthy Americans, has presided over a stealth inflation-tax hike over lower-income households.

Welcome to Biden’s America, where the poor pay more.