On Friday’s broadcast of MSNBC’s “The Last Word,” White House Council of Economic Advisers member Jared Bernstein responded to a question on whether spending by the Biden administration contributed to inflation by saying there were supply issues and that while Federal Reserve policy and government spending “Absolutely” created more demand, that demand helped created a strong labor market.
Bernstein began by saying, “Inflation is a global phenomenon, and Joe Biden’s not president of the globe. If you ask yourself, well, what did happen in every country over the past couple of years, and of course, the answer is COVID-19. And, as you’ve mentioned, it wreaked havoc on supply chains across the globe, especially during a period where we were importing a lot of manufactured goods, that helped to contribute to the inflation problem.”
Later, host Ali Velshi asked, “What do you say to people who say you all caused some of this inflation stuff by giving everybody money when you got into office?”
Bernstein responded, “I think when you look at some of the supply concerns we mentioned earlier, that’s very much related to the inflation. Look, I think that fiscal policy and monetary policy, what the fiscal authorities on the Federal Reserve were doing, was very much trying to fight off the deepest recession that we’d seen since the Great Depression. And this was a real success under the American Rescue Plan. We haven’t had a chance to talk about this today, but we learned today that there are now 22 states with record low unemployment rates below 3%. That is a record, going back to when those data start in the mid-70s. That relates directly to shots in arms and checks in pockets that this president did when we got here. So, did we help to create more demand? Absolutely. Did that demand help to build the strongest labor market we’ve had in generations? No question that it has.”
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