MUFTIC FORUM BLOG

 Biden got the message.  Anti-inflation measures are underway

Updated Nov. 23, 2021 Listening to attempts by progressives and President Biden to show how their BBB legislation, the social infrastructure reconciliation bill, and the bipartisan infrastructure legislation just passed, will deal with inflation, has severe weakness in dealing with the general horror over inflation. The short and the long of actions are the problems. These Biden initiatives are only promises for long-term solutions while the political and consumer problem is short-term, The Biden efforts are hard to grasp promises for future relief. over this next year and beyond. The bipartisan infrastructure bill was signed into law, breaking the House logjam caused by in-party conflicts. The House finally passed the BBB, the human infrastructure, social safety net reconciliation bill, and now the action moves to the Senate.   Waiting for the public to understand the argument of how the BBB and the infrastructure legislation would reduce the price increases consumers are paying at the pump and retail will run up against 2022 midterms because of the time needed to start up, to see it actually working. . These long-term solutions look to consumers like a lick and a promise, ripe for skeptics to attack.  They want credible action now. In the meantime, for the next year, inflation could be on the top short-term voter list of disgust, and fears of inflation will make the BBB passage in the Senate even more problematic.   The Congressional Budget Office score of the BBB's impact on the deficit during the ten years of the program was not that clearcut...with the hit to the deficit coming in the first five years, and the offsetting income of tax policy would not be felt until the last five years, per Steve Rattner, influential financial asset expert, on Morning Joe, MSNBC Nov.22.  What the BBB will look like after it goes through the Senate buzz saw and intraparty fights will be a work in progress over the next several months.

 Some ideas being floated around for immediate,  temporary relief are to release some strategic oil reserves. Biden embraced and acted on some of them. On November 23, Biden led major oil users including  China and India, and the US to release oil reserves to increase supply and to lower prices at the pump) Biden also announced federal regulatory action to make sure the oil companies are not pocketing their increase in margins and that the lower prices are passed on to consumers. Another idea is to roll back Trump's Chinese tariffs on consumer goods, (Trump tariffs were just passed onto consumers, and only in a few sectors did it help the US manufacturing sector.  To avoid looking like Biden is catering to the Chinese, trade-off with some unfair trade practice measures). The jump in prices in early November was mostly a supply and demand problem, too many dollars chasing too few consumer products. Importation of consumer goods, had been clogged, but requiring ports; to work 24/7 had an effect.  On Nov. 22, major retailers, including Walmart, reported their shelves were full and ready for holiday shoppers. Fed plans for raising interest rates to cool off the economy may have long-term benefits, but it just increases the pain consumers feel now with the cost of credit. On November 22, Biden nominated the continuation of the current Fed chair, a holdover from the Trump administration, signaling a middle-of-the-road, bi-partisan, cautious approach.   To address the labor shortage problem as it affects agriculture, food supply, target a temporary year-long visa program for specific sectors including restaurants and domestic, eldercare workers. To avoid looking like open borders advocates, the Biden administration could increase the funding for enforcement for visa overstays and for visa processing in general. Sunset provisions for these measures keep these temporary.