In perhaps the biggest understatement of 2022, Biden’s Secretary of Treasury (and Obama’s head of the Federal Reserve) Janet Yellen admitted today that she was “wrong” last year when she said that inflation would not be a problem.
Yeah, Janet, pretty severely wrong.
Janet claims that “new information” and “unpredictable events” lead to continued inflation which she couldn’t have predicted in 2021. And yet, a lot of other economists (who are not employed by a Party mouthpiece through the mainstream media) did very much predict the major inflation issue. Including, hilariously, Fannie Mae economists in December of 2021 (though they still way underestimated it). But here private sector economists predicted the 8% inflation rate we are seeing in real time.
Further, policy makers like Senator Rand Paul seem to have had a pretty strong grasp on the situation back in 2021. In fact, in an interview in November of 2021 when asked what’s going to come and what the Federal Reserve should do he said:
It seems, almost, like Janet willfully ignored the very obvious indicators of inflation (like those indicated by Senator Paul: over-printing money, massive government stimulus, interest rates held too low for too long, all of which increase overall debt holdings…literally textbook indicators of inflation) and pretended like everything would be fine at the expense of the American people but to make sure and prop up party propaganda.
Even now, Janet and her team are burying their heads in the sand by using an inflation figure that no one else uses which happens to be much lower than the number every other economist uses to measure inflation. Everyone uses consumer price index (CPI) but the Treasury insists on using the personal consumption expenditures (PCE) gauge which is essentially able to exclude- unbelievably – food and energy. It also relies on an ever changing “basket of goods” on which price changes are measured. This means that (if not excluding food in the measure) if grapes get too expensive and customers start buying apples instead, the basket updates to reflect apple prices and the higher grape price is not accounted for in terms of an inflation indicator. Analysts at the Federal Reserve argue that it’s a more agile, up-to-date measure of what consumers want but in reality it just buries the uncomfortable truth about unaffordability in the market. Though the Federal Reserve has used PCE for the past 10 years, it was a change actually made by Janet Yellen in 2012 under President Obama.
So basically Janet Yellen, the woman tasked with knowing how to predict and react to nationwide market issues, either refuses to do it correctly or does not know how. Apparently Senator Paul, who is not an economist and who has not been tasked with managing the nation’s market volatility, would do a better job.