Sen. Elizabeth Warren’s Inflation Blame Game

Her warning to the Federal Reserve is political damage control

Letter to WSJ.

"Sen. Elizabeth Warren reasons like a partisan in her not-so-subtle warning to Federal Reserve Chairman Jerome Powell (“Jerome Powell’s Fed Pursues a Painful and Ineffective Inflation Cure,” op-ed, July 25). First, while inflation is a “global phenomenon,” its composition in the U.S. differs markedly from its composition in Europe. Jason Furman notes that food and energy prices largely explain European inflation. Those numbers are elevated here, too, but U.S. price pressures are much broader.

Next, Ms. Warren repeats the canard that “Putin’s war” is responsible for inflation. Russia invaded Ukraine in February 2022. Yet consumer prices have risen faster than the Fed’s 2% target since March 2021. While the war isn’t helping, the timing clearly disproves the senator’s allegations.

Lastly, her proposed remedies miss the mark. Federally funded child care to boost the workforce? Perhaps, but real wages are already falling, and any boost to production would quickly level off. Medicare drug price negotiation? Prescription prices are rising, but not very fast. Cracking down on “price gouging”? Raising the costs of regulatory compliance for producers won’t lower prices for consumers.

We should treat Ms. Warren’s admonition for what it is: political damage control. We need lawmakers focused on holding Fed decision makers to account for inflation, not badgering them to gin up the economy before the midterms.

Assoc. Prof. Alexander William Salter

Texas Tech University

Lubbock, Texas"