“You cannot spin the economy,” Congressman Tom McClintock warns the Biden administration as it plumps for its budget. Secretary Yellen is on the hill touting Mr. Biden’s “historic economic recovery.” Chairman Powell of the Fed, meantime, seeks to soothe markets with visions of “a kind of economic and financial win-win,” as Politico put it. They both gloss over persistent inflation and the staggering run-up in the national debt.“Everybody knows in their own lives how they’re doing,” Mr. McClintock adds, “and if you try to spin them, you just end up looking foolish.” Good advice from the Coast congressman for Ms. Yellen and Mr. Powell. They are largely ignoring the Fed’s failure to bring inflation down to its 2 percent target — not to mention budget projections showing an epic rise in federal debt. That, itself, is a root cause of price increases.Insofar as Ms. Yellen deigns to acknowledge the inflationary spiral sparked by President Biden’s policies — including federal overspending — it underlines Mr. Biden’s misguided attempts to ease the symptoms while eschewing a cure. “I recognize that many American families still face challenges such as high prices,” she croons. “So we are taking additional actions to bring down the costs of key household expenses like energy and health care.”In effect, Ms. Yellen is saying, rather than fixing the underlying causes of today’s inflation, the administration is offering band-aids. One is more federal spending, posing as “investments,” in green energy boondoggles rather than opening the spigots on America’s fossil fuel resources, which would immediately offer relief to motorists and homeowners. Another band-aid is imposing price caps — an affront to the free market — on drug companies.The $7.3 trillion budget that Ms. Yellen was on Capitol Hill to defend to skeptical lawmakers is slated to add another $1.8 trillion to the national debt. That’s despite the alarm sounded by the Congressional Budget Office that the skyrocketing debt poses “significant risk” to America’s economic outlook. The interest payments alone are projected to jump to 6.3 percent of gross domestic product by 2054, the New York Times reports.As for Mr. Powell, his comments yesterday — “the most important one-man show on Broadway,” says our Larry Kudlow — was a master class in prestidigitation as he waved off the last two month’s “hotter-than-expected inflation reports,” as Politico described them, and enticed investors with hopes of interest rate cuts later in the year. The inflation numbers “haven’t really changed the overall story,” Mr. Powell explained.The Fed chairman averred that inflation is “moving down gradually on a sometimes-bumpy road toward 2 percent.” How, exactly? Well, Mr. Powell says, it will be a result of lower prices in “goods, housing and services,” according to Politico. “Some combination of those three things,” Mr. Powell says, “and it may be different from the combination we had before the pandemic.” Yet, he assures, it “will be achieved.” That was enough to send markets soaring.Which brings us back to Mr. McClintock. If Wall Street is happy about Mr. Powell’s economic estimates, the mood on Main Street is dour. That’s because even if the rate of price increases has slowed, the cumulative effect of Mr. Biden’s inflation has wreaked a trail of havoc for American consumers, who are paying more for everyday products. This is chronicled in the Wall Street Journal, which reports “widespread malaise” among Americans over prices.The Journal points to a Pennsylvania man who is “shocked” by the price of deodorant. “My brain just cannot rationalize paying twice as much,” he says. Two-thirds of Americans say inflation is moving in the wrong direction, the Journal says. “It’s unfair, and it’s not sustainable, and nobody will explain it,” a substitute teacher tells the Journal. Inflated prices are “souring the national mood,” the Journal says, despite Mr. Powell and Ms. Yellen’s attempt to spin it.
