Senate majority leader Mitch McConnell and his party have spent much of the Trump era accusing the Obama administration of allowing inflation to rise, creating extra burdens for the middle class.
So which version of inflation do you believe?
Don’t be misled by price growth. Consumer prices accelerated at an annual rate of 4.2% in January and February. That’s the biggest jump in nearly a decade.
Everyone notices this. So do Republicans, who are determined to blame Barack Obama for rising prices and who are intent on next year’s midterms making this a central issue.
Just last week, Senate majority leader Mitch McConnell tweeted his disdain for Federal Reserve chair Janet Yellen for “inflating our skyrocketing debt, discouraging savings and forcing everyone to pick up the tab for President Obama’s failed economic policies”.
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Stark statistics of upward price change do create a problem for Republicans, because many Americans do indeed pay more for clothes, cars and health insurance every month.
Many economists and political observers draw a distinction between the inflation measured by the US central bank and that measured by other government agencies, such as the Bureau of Labor Statistics. To repeat, the United States has now experienced a five-year period of inflation consistently above 4%. Republicans tend to see that as “accelerating” and risk pushing some Democrats into hitting a sweet spot and becoming more anti-tax than they might otherwise be.
Democrats and many Fed members, on the other hand, see it as speeding up an overall decline.
Inflation may be accelerating, but that is less a problem for Democrats than a political opportunity. Many Republicans, by contrast, would see it as heralding a return to recession and their old club, the Democratic party.
Republicans can’t afford to ignore this issue because of the small number of seats up for grabs in 2019, when the midterms will take place. They won’t want to scare away voters and give themselves a reason to respond to it.
Economic conditions are important to voters. The unemployment rate has remained well below 4%, which could be because wage growth is growing, which is desirable. The post-2007 housing crash and financial crisis mean many will be cautious about spending.
The influence of Donald Trump on the economy and the economy-related political debates has not yet been well measured. The Republicans would do well to learn from that, because they are losing the battle of public opinion on inflation right now.