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Republicans have no inflation policy, but they’re loving inflation politics

Hugh Jackson: “Inflation hurts, but at least it has given GOP politicians some fresh material.” (Image by Golnar sabzpoush rashidi from Pexels, courtesy of the Nevada Current)

“Sky-high inflation,” said (Nevada U.S. Senate candidate) Adam Laxalt, while rattling off “failures of Joe Biden’s agenda” in a statement to CNN.

Citing “historically bad inflation” while hammering the Democrats’ Build Back Better agenda, the National Republican Senatorial Committee says “vulnerable Democrats like … Catherine Cortez Masto have already made clear where they stand: they’re 100% on board with Joe Biden’s war against the middle class.”

Nevada news publications assure readers that one of the “headwinds” against Democratic Gov. Steve Sisolak’s reelection bid is inflation.

And Republican politicians all over, along with honorary Republican Joe Manchin, warn that if Democrats make child care, elder care, health care and housing more accessible and affordable – just some of the provisions in what the GOP calls Biden’s “socialist” Build Back Better legislation – inflation will be even worse.

Republicans in Nevada and the nation are supremely confident – downright cocky, in fact – about the prospect of huge victories up and down the ballot in next year’s elections, in no small part because of inflation.

OK, the GOP doesn’t have much in the way of policy positions on fighting inflation.

But judging from the manner in which they relish talking about it, and more specifically, blaming Democrats for it, Republicans appear to have a very strong political position on working families paying more for goods and services: GOP politicos sure hope that doesn’t end anytime soon, lest voters don’t care about it anymore come election time next year.

Blaming the president and other simple pleasures

To be fair, there is one inflation-related policy argument that Republicans make. They warn that increased government spending under Biden and the Democrats is a big reason prices have gone up. And they contend the aforementioned Build Back Better bill will only send prices even higher into the sky.

Republicans traditionally have preached an anti-government political philosophy. You don’t have to agree with them to respectfully understand why their ideology, sincerely held, would lead them to oppose the activist government reforms in BBB, even now that the legislation has been dramatically whittled down from the Biden administration’s original vision.

And politics being politics, if that’s what we’re still calling the fiasco of idiocracy that is the public sphere in the 21st century, it’s not realistic to expect Republicans to discuss thoughtful explanations for rising prices, from supply chain snags, to ongoing pandemic influences on supply and demand, to companies flat out taking advantage of an inflationary Zeitgeist so they can price gouge.

Why bring up any of that stuff when blaming Biden and Democrats is so much easier and much more politically potent? Especially since — and Republicans are counting on this – voters, most of whom have very busy lives that don’t involve analysis of inflationary pressures, prefer the simplicity of blaming the president?

The prevailing political analysis is right: If inflation stays high into the summer, the Democrats are toast in the midterms, nationally and here in Nevada.

But however politically fortunate for the GOP, that doesn’t mean Republican explanations for inflation are any more accurate than their sloppy and false explanations for high gas prices.

Voters might even discover that the GOP’s lazy talking points, if they manifested as actual policy, would have some nasty consequences.

CTC, ARP, BBB, and GOP BS

Here’s a case in point, involving America’s sweetheart Adam Laxalt and a man Laxalt hopes to call a colleague, Utah Republican Sen. Mike Lee.

“Democrats’ reckless spending has driven inflation to a three decade high,” Lee said when a group of congressional Republicans issued a politically motivated report on inflation in mid-November. [Editor’s note: North Carolina’s Thom Tillis has been beating the same drum.]

Economists can – and do – argue over what impact Democratic spending, reckless or otherwise, has had on inflation. But if you buy the argument that government spending under the Democrats is responsible for inflation, there’s one glaring program that would be the leading suspect: the expanded child tax credit under the American Rescue Plan.

The tax credit has put money directly into the pockets of millions of Americans, including more than 350,000 families representing nearly 600,000 children in Nevada. The tax credit is scheduled to expire at the end of this month, by which time Nevada working families will have collectively received roughly $900 million in direct monthly payments.

Much if not most of the rest of ARP money is still in the process of being administered. It either hasn’t been spent yet, or is only starting to spread through the economy, and so could not have been responsible for any government-fueled overheating this year that Republicans blame for inflation. The same of course goes for the bipartisan infrastructure bill which was signed into law only last month.

Disrupted distribution of goods, the impact of delta over the last few months, corporate profiteering … there are multiple angles to today’s inflation, and the degree to which federal spending under Democrats has contributed to it is highly debatable.

But inasmuch as government spending is to blame, the child tax credit must far and away be the biggest culprit (especially since federal pandemic unemployment benefits stopped not long after families started getting the tax credit’s direct benefits).

No Republicans in Congress voted for the child tax credit.

But do Republican politicians want to get rid of it?

Enter Adam Laxalt. A few weeks ago the Democrats’ Senate Majority PAC ran an ad against Laxalt saying our hero “even opposes the expanded child tax credit for working parents.”

And did Laxalt stand up straight and say youbetcha I oppose that inflation-causing Democratic socialism? No. His campaign got lawyers to try to bully TV stations to remove the ad (with little result), specifically arguing that Laxalt has never said he opposes extending the tax credit, which is set to expire this month but would be extended under the House version of the Build Back Better Act.

The lawyers said it wasn’t fair for an ad to attack him on specific provisions of a bill that hasn’t been enacted yet.

Curiously, such a sense of cautious discretion has not stopped Laxalt from repeatedly condemning the entire — and still unpassed — Build Back Better bill as “radical” (but not in a nice way).

Laxalt has as yet declined to state his position on the child tax credit.

So to recap: In that dimension of the universe inhabited by Republicans, Democrats’ reckless spending is responsible for inflation. But not so responsible that Republicans have the guts to oppose the one spending program that more than any other would have been responsible (if it was).

Evidently Laxalt and the GOP aren’t that concerned about inflation.

Sobriety check

Ah but the $1.9 trillion Build Back Better Act would be even bigger than the American Rescue Plan. Not only would it spend billions on child care, elder care, health care, housing and multiple other programs and initiatives, it would also extend the child tax credit. And don’t forget the $1 trillion bipartisan infrastructure act. Surely all that influx of government money into the economy would cause prices to rise, right?

Several analysts have given the subject consideration and come to a powerful conclusion: Meh.

As one executive put it to Reuters, since the spending in both bills is spread out over a decade (or more), they “should not have any real material impact on inflation.”

“The bills do not add to inflation pressures, as the policies help to lift long-term economic growth via stronger productivity and labor force growth, and thus take the edge off of inflation,” added Moody’s Analytics economist to the political stars (of both parties) Mark Zandi.

The same Reuters story quotes a Fitch Ratings executive predicting the BBB and the infrastructure bill together “will neither boost nor quell inflation much in the short-run.”

Those assessments, rendered by people who are driven by financial bottom lines, are more sober than the rantings of Republicans who in this day and age seem ready to recklessly embrace anything, or anyone, even violent insurrectionists, for short-term political gain.

Hugh Jackson is the editor-in-chief of the Nevada Current which first published this commentary.

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