To do so, Biden must abandon his economically ignorant policies. He has demanded even more spending to help households that are suffering from the inflation that public spending itself helped create. He has also simultaneously called for an end to fossil fuels and excoriated U.S. oil and gas companies for not producing more, even though his own policies have reduced their incentive to invest. In the absence of greater domestic production, he has courted Venezuela and Saudi Arabia, seeking to persuade them to boost oil output.
The wiser approach would be to embrace an agenda of pro-growth, supply-side regulatory and tax reforms (like President John F. Kennedy), with spending controls and deficit reduction to complement the Fed’s efforts to curb inflation without causing a recession. Unfortunately, neither Biden nor the rest of his party have shown any inclination toward such policies. Instead, they are campaigning on social issues like abortion rights and gun control to gin up their base.
This is a risky approach, especially considering that the Democrats are already vulnerable on issues such as surging illegal immigration and crime. Citizens are fleeing cities historically run by Democrats (San Francisco has lost 6.3% of its population), or obtaining guns for self-defense. While the Democrats focus on social issues, voters primarily are concerned with rising prices, which are evident daily at the gas pump and the grocery store. It’s the inflation, stupid.
Michael J. Boskin is professor of economics at Stanford University and senior fellow at the Hoover Institution. He was chairman of George H.W. Bush’s Council of Economic Advisers from 1989 to 1993, and headed the so-called Boskin Commission, a congressional advisory body that highlighted errors in official U.S. inflation estimates.