A former official in the Obama administration accused President Joe Biden on Thursday of being wrong on the subject of inflation by blaming rising rates on supply chain issues.
Steven Rattner, a former counselor to the Treasury secretary during the Obama administration, wrote in an opinion piece for The New York Times that Biden was being misleading when talking about the recent inflation spike. Biden said in an interview with NBC News last week that global supply chain issues caused by the ongoing COVID-19 pandemic were the main cause for increased prices for consumers.
"Supply issues are by no means the root cause of our inflation. Blaming inflation on supply lines is like complaining about your sweater keeping you too warm after you've added several logs to the fireplace," Rattner wrote. "The bulk of our supply problems are the product of an overstimulated economy, not the cause of it."
During the interview, Biden specifically noted that a shortage of semiconductors was hurting auto manufacturing and causing a rise in car costs.
He told NBC, "The reason for the inflation is the supply chains were cut off, meaning that the products, for example, automobiles — the lack of computer chips to be able to build those automobiles so they could function; they need those computer chips. They were not available."
Rattner said that although there are ongoing supply chain issues, this inflation is primarily caused by large levels of demand due to increased consumer spending, possibly due to the multiple stimulus payments sent out during the pandemic.
"It's a classic economic case of 'too much money chasing too few goods,' resulting in both higher prices; and, given the extreme surge in demand, shortages," he said.
Theodore Bunker ✉
Theodore Bunker, a Newsmax writer, has more than a decade covering news, media, and politics.
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