ASKING THE WRONG QUESTION…. The House Budget Committee badgered Federal Reserve Chairman Ben Bernanke yesterday for quite a while, with Republicans demanding to know why he doesn’t focus more on addressing inflation. Bernanke tried to explain to GOP members that inflation isn’t the problem right now.
But Republicans refuse to believe this. Indeed, it’s been at the core of the party’s message for quite a while — stop trying to create jobs and grow the economy, since they’re not the real problem. In the GOP worldview, the economy will improve (eventually) after we lower the deficit, which will in turn stamp out inflation.
The importance of this is that those who voted for Republicans because they’re unhappy with the economy don’t seem to realize what they’ve done. The NYT‘s David Leonhardt posted this chart, showing core inflation over the last four decades. See that very low point, all the way to the right side of the chart? That’s now.
In other words, congressional Republicans — the ones handed great power because of public dissatisfaction with the economy — aren’t just offering the wrong answer, they’re asking the wrong question. They see high unemployment and weak growth, and are convinced they’re not nearly as important as inflation that doesn’t exist.
Kevin Drum has a good post on this today, explaining, “Right now, core inflation has been trending down steadily for four years and is as low as it’s been since the end of World War II. There’s no evidence that food and energy prices are feeding through to core inflation, and no evidence that there’s even a trace of broad inflationary pressure in the economy. It’s just not there. Employment and growth are our problems, not inflation.”
We can’t even have a credible, grown-up debate because Republicans want to focus on problems that don’t exist, while ignoring problems that do exist. Instead of discussing how to help boost the economy, we’re stuck in a debate about whether to boost the economy.