Claim: Biden’s false claim about inflation was really just making the point that the causes of inflation were already in place when President Joe Biden took office.
Verdict: False and misleading.
White House Press Secretary Karine Jean-Pierre on Wednesday said that President Joe Biden’s false claim that inflation was at nine percent when he took office was intended to point out that the causes that led to inflation reaching that high were in place when he took office in January of 2020.
Biden this week repeated the false claim that inflation was at nine percent when he took office. It’s a statement he first made in an interview last week with CNN’s Erin Burnett. This week he repeated the falsehood in an interview with Yahoo! Finance.
“I think inflation has gone slightly up, it was at 9 percent percent when I came in,” Biden said during the interview. “And, it’s now down around 3 percent percent.”
The year-over-year rate of inflation was 3.5 percent in March, the latest data available when Biden gave the interview. On Wednesday, the Labor Department said inflation had ticked down to 3.4 percent. Inflation has not been three percent or lower since March of 2021. When Biden took office, the consumer price index was up 1.4 percent compared with a year earlier.
In a press conference on Wednesday, Jean-Pierre was asked about Biden’s repeated inflation lie by Fox Business Network reporter Edward Lawrence.
“I want to ask you about how the President talks about inflation. Two times over the past two weeks, the President said inflation was nine percent when he came into office. Is the President misleading Americans on that? Or does it — just not realize that inflation was 1.4 percent when he came into office?” Lawrence asked.
Jean-Pierre replied that the president’s claim should not be taken literally. He was saying inflation was nine percent in order to make the point that the “factors that caused inflation” were in place when he took office.
“The point that he was making is that the factors that caused inflation were in place when he walked into the administration when he took office,” Jean-Pierre said.
Jean-Pierre said that the four-decade high inflation was an inevitable result of the pandemic and the reopening of the economy.
“Reopening after the pandemic unavoidably increased inflation by unleashing pent up demand. Inflation increased quickly as we reopened,” Jean-Pierre said.
Verdict: False and misleading.
Biden did not make a claim about the causes of inflation. He said that inflation was nine percent when he took office, which is false. The consumer price index’s year-over-year rise did not reach nine percent until June 2022, nearly a year and a half after Biden took office.
Jean-Pierre’s argument that the factors that led to inflation rising to nine percent, the highest rate since 1981, were already in place before Biden took office is misleading and contradicts President Biden’s earlier statements about inflation.
“There’s nobody suggesting there’s unchecked inflation on the way. No serious economist,” Biden said, falsely, on July 19, 2021.
This was untrue. At the time, economist Larry Summers had been warning for months that the Biden administration’s free-spending policies would push up inflation. In an interview on CNN, Summers explained that the Biden administration’s American Rescue Bill made the mistake of pumping up demand too much without taking steps to increase supply. That had triggered inflation.
Summers was the Treasury Secretary under Bill Clinton, the director of the National Economic Council under Barack Obama, the chief economist of the World Bank, and had been president of Harvard University.
That is an old falsehood but it bears on Biden’s latest lie. If the factors that would cause inflation were already in place, why was Biden insisting that inflation would not be a problem in the summer of 2021?
Jean-Pierre’s argument that reopening unleashed pent-up demand that made inflation “unavoidable” suggests that the American Rescue Plan’s $1.9 trillion stimulus was not only unnecessary but irresponsible in 2021, as Summers and many Republicans said at the time. So in attempting to defend Biden’s latest falsehood, she is condemning the signature legislation of Biden’s first year in office.
It is likely that America would have experienced some rise in inflation as we came out of the pandemic lockdowns even if Biden had not spent recklessly. There was pent-up demand and American households were flush with excess savings from earlier rounds of stimulus and lockdown spending repression. Global supply chains were a mess, hindering the ability of the economy to absorb the surge in spending.
But it would not have surged as high as nine percent without the Biden administration’s policies. In March of 2021, the median projection of Federal Reserve officials for inflation was for the personal consumption expenditure (PCE) price index to rise to 2.4 percent that year and then decline to two percent the following year. If inflation had stayed that low, it still would have been the highest rate of inflation since 2011.
With Biden in the White House, however, inflation soared much higher. In 2021, the PCE price index rose 4.2 percent in 2021 and 6.5 percent the following year, the highest since 1981. The year-over-year gain in inflation measured by the PCE price index peaked in June of 2022 at 7.1 percent.
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