Fact Checking of False and Misleading Media Claims Blaming Americans for Rising Prices and the Supply Chain Crisis
In recent days, prominent media commentators and various media took this false attack on the very people who suffer from the bad decisions made in Washington. In particular, a New York Times article published on Tuesday blamed the state of the economy, labor shortage, supply chain problems and inflation not on irresponsible policy choices in Washington. , but at the feet of hardworking Americans trying to provide for their families.
Joel Griffith, a researcher at the Roe Institute for Economic Policy Studies at the Heritage Foundation, corrects the record on the patently false claims made by The Times:
Claim 1: The Fed is not to blame. “Monetary policy takes a long time to affect consumer prices, so it is not certain that the inflation picture would be drastically different now if the Fed had already started raising rates.”
Griffith: âWithout a doubt, the Federal Reserve’s policy is contributing to the very high inflation spurt. The central bank has âboughtâ billions of assets (with new digitally âprintedâ money), effectively funding much of the explosive federal spending by buying public debt. These funds circulate throughout the economy. One of the most inflationary actions of the federal government funded by the Fed has been paying companies not to fire people, paying banks not to evict people, paying mortgage companies not to take people’s homes and paying people not to work. Government spending has fueled demand at a time when restrictions, valid health concerns and fear have suppressed supply. Bad government policy should not be underestimated when discussing the root causes of the soaring inflation that Americans are experiencing. “
Complaint n Â° 2: The demand for products in the United States is at the root of the supply chain crisis. We should lower our expectations. âThe supplies of many products are actually higher than they were before the pandemic. The problem is that the demand is increasing even more.
Griffith: âBlaming ‘high demand’ for the supply chain crisis is absurd. Government policies effectively suppress the supply of goods. For example, the significant bottlenecks this year, including ensuring this turkey is delivered from the farm to your table, are caused by the ongoing COVID vaccine mandates; tighten environmental regulations on the trucking industry; old diesel trucks are increasingly banned from the roads in California; labor shortage among drivers, warehouse workers and retail workers (caused by government policies); and the costly remoteness and capacity restrictions of processing plants. A tsunami of government spending contributed to the surge in demand, while government policies simultaneously hampered the supply and transportation of these goods. The government essentially cut supply while stimulating demand with heavy spending.
Claim 3: The pandemic is to blame because it has crippled the global economy. âWhen the pandemic shut the world off in 2020, business operations officials concluded: We must do everything we can to survive. “
Griffith: âThe pandemic has not ‘closed the world’. Governments have shut down large parts of the world. Businesses have been forced by governments to comply with oppressive restrictions, which has led to many companies going bankrupt. Erratic, unpredictable and arbitrary decisions by government bureaucrats have made even short-term planning almost impossible. Of course, some state governments have reopened their companies quickly or refused to impose closings. These regions benefited from a much better economic environment, Florida, Utah, Georgia and Texas, while the rest of the country remained mired in a deep recession, especially New York, California, New Jersey and Hawaii.
Claim # 4: Americans are to blame for the labor shortage after choosing to leave the workforce. “Many of us have chosen to stop working or to work less.”
Griffith: âIt’s like the arsonist blamed the firefighters for not getting to the scene quickly enough. Governments have forced many businesses to shut down completely or significantly scale back their operations. Many of these employees are barely “elected” to stop working. Instead, their jobs have disappeared due to the criminalization of their jobs by governments. Schools in many parts of the country have closed for much, if not all, of the school year or have imposed spontaneous and unforeseeable interruptions. This made employment difficult for many parents. In addition, many of those who previously worked in the child care industry have left. Again, the parents hardly “chose” to stop working.
âIn addition, federal unemployment premiums combined with state unemployment benefits have enabled the majority of unemployed Americans to earn more outside of work than working, which has been a strong deterrent from returning to work, by especially when combined with multiple federal stimulus checks. Now, private vaccine warrants and a threatened federal mandate are pushing many more people out of the workforce. In short, ill-advised government policies have reduced the number of people willing to work. This artificial shortage drives up the cost of labor.