You know you’re in trouble when your pitch comes up as a no-sale even among your friends. The efforts by Joe Biden and Jen Psaki today to blame Vladimir Putin for inflation and rapidly rising fuel prices failed to convince Barack Obama’s auto-bailout czar. Steve Rattner offered a single tweet that punctured this White House buck-passing narrative, but it was enough:
Well, no. These are Feb #'s and only include small Russia effect. This is Biden's inflation and he needs to own it. https://t.co/WsJjn6picV
— Steven Rattner (@SteveRattner) March 10, 2022
Rattner makes a point that I raised earlier in my analysis of the CPI index report this morning. The invasion of Ukraine began on February 24th, which at most left five days in the month where the war might have impacted consumer prices. I say might because consumer prices don’t react immediately to world events, and even commodities-market reactions can lag. For instance, the oil futures prices that serve as a marker for consumer pricing didn’t really move up for a couple of days after the invasion:
Oil didn’t jump up, in fact, until February 28, the last day of the month. Prior to that, oil prices entered the month at $88.20 and wound up at $91.59 on Friday, February 25th — an increase of only 3.8%. That’s pretty significant, and it ended up being right about the level of increase in energy prices for the entire month. However, it pales in comparison to the 14.5% increase in oil prices in January, and the 50.9% increase in oil prices between Biden’s inauguration and the end of 2021.
Furthermore, energy inflation isn’t even the biggest component of the CPI spike. What does Vladimir Putin have to do with rents, or furniture, or car repairs?
Food prices rose 1% and food at home jumped 1.4%, both the fastest monthly gains since April 2020, in the early days of the Covid-19 pandemic.
Energy also was at the forefront of ballooning prices, up 3.5% for February and accounting for about one-third of the headline gain. Shelter costs, which account for about one-third of the CPI weighting, accelerated another 0.5%, for a 12-month rise of 4.7%, the fastest annual increase since May 1991.
Many price increases are the **highest ever recorded** by @BLS_gov
New cars & trucks +12.4
Dry clean +9.5%
Baby food +8.4
Full service restaurant +7.5
Pet supplies +7.5
Car repair +6.7
— Heather Long (@byHeatherLong) March 10, 2022
So yes, the new talking points are staggeringly dishonest, and it’s not the first time Rattner has called Biden out for it. Almost a month ago, Rattner attacked Biden’s dishonest attempt to blame the supply chain for inflation, back when Putin didn’t make himself into a bete noire:
In an interview with Lester Holt of NBC last week, President Biden hewed closely to his talking points on inflation, which over the past 12 months has risen at its fastest rate in 40 years. “The reason for the inflation is the supply chains were cut off,” he insisted, as he has done several times before.
Well, no. That’s both simplistic and misleading.
For starters, the supply chains have not been “cut off,” just stretched. And supply issues are by no means the root cause of our inflation. Blaming inflation on supply lines is like complaining about your sweater keeping you too warm after you’ve added several logs to the fireplace.
A month later, it’s clear that this is the same old song from Biden about inflation being everyone else’s fault but his own. Rattner’s not buying it — and neither should anyone else.