One economics professor is claiming that President Biden isn’t to blame for inflation. He said the blame lies elsewhere. However, he does agree that some of Biden’s policies have and will harm U.S. citizens. In other news, Janet Yellen, the U.S. Secretary of the Treasury, said the passing of the Infrastructure Investment and Jobs Act and consideration of broader investments in childcare, education, health care, and housing are helping build the economy that America can and should have. She said the nation is not overinvesting, adding that now is the right time to make these investments. She said the crucial question isn’t, “What if we make these big investments?” It’s, “What if we don’t?”
National Review/Casey B. Mulligan
Inflation Is Not Biden’s Fault
President Biden’s policies, actual and aspired, have and will impose many harms on American citizens. Inflation is harmful too, but most of the blame for that lies elsewhere.
President Biden’s agenda includes historically large amounts of redistribution from workers to those out of work and to members of politically connected organizations from those out of favor. Such policies reduce work, investment, productivity, and ultimately our living standards.
Controlling inflation is largely the responsibility of the Federal Reserve, which is legally independent of both the president and Congress. Inflation is, by definition, the rate of decline of the value of a dollar — a “Federal Reserve Note” as it says above George Washington’s portrait. The value of a dollar is determined by the supply and demand for those notes relative to the goods and services produced in the economy.
The “blame Biden” faction says that his policies have created shortages of many goods and services (I agree), which supposedly increases their prices relative to Federal Reserve Notes. But the policies also increase their prices relative to the goods and services where policy is not creating shortages. It’s a mistake to focus just on the goods in short supply, when all consumer goods and services count in the Consumer Price Index (CPI), and it is ultimately up to the Federal Reserve whether the notes in circulation grow more or less than the supply of consumer goods and services.
You can read the full story, here.
Janet Yellen: Biden’s infrastructure plan is a down payment on the economy America can – and should – have
For more than a generation, America has underinvested in the public goods that are the foundation of our economic growth: infrastructure, education, childcare.
Our funding for them has been on a downward trajectory for nearly forty years. In 2019, it was about three-quarters of what it was in the 1970s. On Tuesday, the United States Senate began to turn the page on this unfortunate chapter in our economic history and, with two pieces of legislation, started building the economy that Americans should – and can – have.
The first development happened in the late morning when the chamber passed the Infrastructure Investment and Jobs Act, which – as its name indicates – will commence the largest modernization of American infrastructure since Eisenhower built the Interstate Highway System.
Its history is written in concrete and fiber optic cable. In addition to repairing roads and extending transit lines, the bill will connect every home to broadband internet and dot the American landscape with half-a-million electric vehicle charging stations, part of a down payment on a greener, more resilient economy.
Read her full message, here.
Kitco News/Neils Christensen
Gold price testing resistance just below $1,800 following 1.1% drop in U.S. Retail Sales
U.S. economic activity appears to be losing some momentum as U.S. consumers made significantly fewer purchases in July. However, weaker than expected retail sales numbers are having little impact on gold as prices test resistance just below $1,800 an ounce.
U.S. retail sales fell 1.1% in July, down from June’s revised increase of 0.7%, according to the latest data from the U.S. Commerce Department, released Tuesday; the data significantly missed expectations as economists were forecasting a 0.2% rise.
This is the second time in three months that consumers have cut back on spending.
The gold market is trying to find some traction following the disappointing numbers. December gold futures last traded at $1,792.60 an ounce, up 0.16% on the day.
Meanwhile, core retail sales, which strips out auto sales, dropped 0.4% last month, down from June’s revised reading of 1.6%. Economists were expecting to see a 0.2% increase.
You can keep reading, here.