The blowback from President Joe Biden’s weekend remarks about prices rising “just an inch, hardly at all” continued during the week, with the House Oversight Committee hearing from one of its members during a session on Sept. 22 on corporate profiteering that “the White House is now measuring inflation in inches,” and is downplaying the pain of high prices on American households.
The critical remarks were made by Rep. Michael Cloud (R-Texas), ranking member of the Subcommittee on Economic and Consumer Policy, which is part of the House Committee on Oversight and Reform. The subcommittee was on Thursday discussing the role of corporate profiteering as a contributor to inflation.
“First, inflation was because of Putin. Then it wasn’t,” Cloud said. “Then it was transitory… and then it wasn’t. Then it was at zero percent just a couple days before jamming the Inflation Reduction Act through Congress, which actually doesn’t reduce inflation.”
“After trying to redefine what recession means with all-too-complicit media willing to carry their water, we find out Sunday in a bizarre interview that the White House is now measuring inflation in inches per month and that Biden seems content with the inflation Americans are dealing with,” Cloud continued.
The Republican lawmaker’s comments were in reference to an eyebrow-raising interview that aired on CBS’ “60 Minutes” program on Sept. 18, in which Biden downplayed the inflationary pressures facing American families.
The president said in the interview that inflation over the past few months “hasn’t spiked” and that the monthly rate of inflation was negligible.
“The inflation rate month to month was just … an inch, hardly at all,” Biden said in response to a question by interviewer Scott Pelley, who noted that the most recent Consumer Price Index (CPI) came in at an annual 8.3 percent—which is close to a multi-decade high—and that Americans were “shocked by their grocery bills.”
Grocery store inflation—based on the “food away from home” category in the CPI data—shot up by an annual 13.5 percent in August, the fastest pace in 43 years.
The president replied to Pelley’s question by calling for “perspective” and focusing on the month-over-month rate of inflation in August—which was 0.1 percent—rather than the year-over-year pace of 8.3 percent.
Biden’s remarks on inflation sparked a flurry of critical takes from Republicans and others. The president’s remarks also stood in stark contrast to statements made by Federal Reserve Chair Jerome Powell, who during a press conference on Sept. 21 essentially contradicted Biden by saying that inflation was “running too high” and that despite “some supply-side healing” inflation “has not really come down.”
Diminishing Purchasing Power
During the subcommittee hearing, Cloud argued that the Biden administration’s messaging on inflation was misleading.
“The purchasing power for families in America is diminishing, and for all practical purposes, because of inflation, they’ve lost one month’s income a year,” Cloud said.
The Republican lawmaker added that he was glad the subcommittee was tackling the issue of inflation because “in some ways, it’s a recognition of what the White House has been denying all along, that inflation in this country is real and having a real impact on the American people.”
There’s been widespread debate about the causes of the inflationary wave that has engulfed American households. Typical factors singled out include unprecedented levels of fiscal and monetary stimulus, pandemic-related supply-chain dislocations, and the war in Ukraine.
Subcommittee Chairman Rep. Raja Krishnamoorthi (D-Ill.) said at the opening of Thursday’s session that one factor that is often overlooked is the role of corporate profiteering.
“There are, however, other factors that contribute to inflation that have not received enough attention,” Krishnamoorthi said. “One of those factors is extreme price hikes—in other words, corporations raising prices far more than required to offset higher costs, even when accounting for shifts in supply and demand, resulting in the highest profit margins we have seen in over seventy years.”
The Democrat lawmaker cited a study that showed 80 percent of Americans view excess corporate price hikes as one of the factors driving inflation.
Recent data from the Department of Commerce showed that a measure of profit margins of U.S. companies in the second quarter reached its widest since 1950, suggesting that prices charged by businesses were exceeding the inflation-related jump in business input costs like materials and labor.
While Krishnamoorthi said the intention of the hearing was not to vilify corporations, as “American innovation is the backbone of our economy, and many corporate leaders deserve praise for creating jobs and growth,” he said the reality is that many corporations are today raising prices more than necessary to cover costs.
Excess corporate profits come at the expense of the American consumer, Krishnamoorti said, adding that the purpose of the hearing was to “shine a light on these harmful practices.”