That, in turn, points to a broader problem with the way the federal government treats inflation. Not only is it downplaying the real inflation rate, it is camouflaging its own misdeeds. It is actions taken by the federal government—including the Biden administration, the Trump administration, Congress and the Federal Reserve—that have landed us in our present inflationary mess. Over the past several years, a bipartisan array of government officials, elected and unelected, have coalesced around a series of half-truths to paper over this fact.
The primary reason for the reduction in our purchasing power is not the supply-chain disruptions occasioned by government responses to the COVID pandemic, let alone Vladimir Putin’s invasion of Ukraine.
For one thing, supply-chain disruptions only affect certain prices. A shortage of circuits needed to build computers, for example, can’t explain the rise of the price of dining-room tables. A decline in the supply of wood can’t explain why laptops are ticking up. Fed officials know this.