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Within Biden’s frustration with skyrocketing prices

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When President Biden came to talk about lowering gas prices for the Iowa biofuel plant in April, he stood in front of a large tractor and declared that “biofuels now have a role,” and announced plans to expand ethanol use. In the summer.

But in private, Biden dismissed the policy as ineffective and questioned the value of the trip, according to two people familiar with the conversation. After returning to the White House, he took his senior staff, including Chief of Staff Ron Klein, to the Oval Office, asking questions about the purpose of the event.

Biden was worried before publication that it would exacerbate ethanol’s ability to cut gas prices and harm their climate targets, with people saying the condition of anonymity to discuss private conversations. But Agriculture Secretary Tom Wilsack and other officials urged Biden to go, arguing that it would at least help the Midwest – and the White House was desperate for ways to lower gas prices.

This episode describes the White House’s months-long challenge to reduce rising prices and the growing frustration of the president’s inability to govern. The problem has escalated over the past year, consuming the president’s top aides and threatening their domestic agenda, their international priorities and their party’s political prospects.

President Biden on Federal Reserve Chair Jerome H. May 31 Powell met with him and discussed US historical inflation. (Video: Reuters)

“Inflation is the detriment of our existence,” Biden said at last week’s Jimmy Kimmel show.

Klein and other top officials have directed agency heads to look at any and all measures they can take to reduce costs for Americans. Biden is expressing his anger internally. And some Democrats inside and outside the White House want to focus on oil and gas company greed as the focus of their fall message.

In a speech Friday at the Port of Los Angeles, Biden renewed attacks on large firms for keeping prices high enough to maximize profits, saying he wanted to “pop” someone. “Exxon made more money than God last year,” Biden said. “Exxon – Start investing and start paying your taxes.” Oil companies deny that their policies are keeping artificially high prices.

But there is little evidence that any of these are working. And some economists say the extraordinary nature of this inflationary race makes it particularly stubborn.

“I think we’re in a really difficult position, because we don’t have successful precedents to have an economy that doesn’t have low unemployment and high inflation and a recession,” said former Treasury Secretary Larry Summers. “It’s very difficult to achieve a smooth landing.”

If anything, the problem seems to be accelerating. According to the latest Consumer Price Index released on Friday, prices rose 8.6 percent in May compared to a year earlier, the highest level in 40 years. In addition, prices rose much faster last month than they did in April, prompting optimism in the White House that the country had already reached inflation.

Five charts describing the current inflation run

According to the AAA, gas prices have skyrocketed, with the national average of gallon gas exceeding $ 5.00. Russia’s invasion of Ukraine has boosted global energy markets, further disrupting supply chains that are already disrupted by the epidemic. Western sanctions against Moscow as a punishment for war have dramatically increased costs.

But Americans are experiencing price increases across the board: food, housing, airfare, medical care and clothing have all increased. And as prices continue to rise, the air of economic headwinds hides and redirects the president’s agenda on all fronts.

Sen. Joe Manchin III (DW.Va.) torpedoed the president’s extensive economic plan due to concerns over inflation. The president has shifted his approach to a major oil producer, Saudi Arabia, as a candidate to treat the country as a “pariah”. And their approval rating is declining, as voters become increasingly sour about the way they manage the economy.

A new survey by the Washington Post and George Mason University’s Schar School of Policy and Government shows that most Americans expect prices to rise over the next year and as a result, are changing their spending habits. Republicans continue to seize the matter as a testament to the failed stewardship of the Democrats’ economy, with congressional elections less than five months away now.

As administration officials conclude that they can do little to affect prices, they are at least trying to change their message – for example, promoting positive indicators in the economy, mainly record-low With the unemployment rate but Americans pacing up with the rising costs of everyday things, the argument does not seem to resonate.

The White House made a new push last month to show that Biden and his team are working hard to control inflation. The President is Federal Reserve Chair Jerome H. Hughes. Powell met with the Oval Office and wrote in the Wall Street Journal op-ed, but sent officials across the cable networks to explain the White House administration’s actions.

Biden and his aides have increasingly attacked Republicans, particularly focusing on a proposal published by Republican Sen. Rick Scott (R-Fla.), Arguing that Democrats will make things worse by increasing taxes on many Americans.

But the messaging push offered no new direct measures for lower costs.

Jason Furman, a professor at Harvard University and former top economic adviser to President Barack Obama, has long criticized the size of the coronavirus stimulus package approved by Democrats at the beginning of Biden’s tenure, arguing that it is causing inflation.

But he questioned the long-standing ban on student loan repayment and the maintenance of tariffs on China, but the administration has since done what it can to reduce costs. Restarting student loan payments and removing some tariffs, Furman argued, could help alleviate the problem.

Furman said there is a mismatch between public anger over inflation and how much Biden can do about it. “Americans are never more insane than gas prices,” he said. “This is one of the things that the White House has less power to do. It’s a global price, and it’s driven by global events.

The administration has struggled to explain how long Americans will expect rising prices, giving the false impression that rapid price increases will decrease relatively quickly. When prices began to rise significantly for the first time last year, Biden and others suggested that the economy was a resumed effect after the epidemic and that the economy would fade as it stabilized.

Biden said in July 2021 that price rises were “expected to be temporary,” a prediction echoed by top aides who promised inflation would be “stable.” In recent months, these bureaucrats have changed their tune, and at the end of last month, Biden began to say inflation was his “top economic priority.”

Furman said the administration’s initial analysis of the problem was tracked with high estimates, including the Federal Reserve. They are all wrong.

“They weren’t on the curve. You can’t look back and say, ‘Wow, that was impressive,'” he said.

The renewed engagement with Saudi Arabia is one of the most significant policy implications of rising prices, as it signals a significant deviation from Biden’s campaign rhetoric and a pledge to place human rights at the center of his foreign policy.

For months, senior White House and Foreign Affairs officials have debated whether the president should travel to Saudi Arabia, giving harsh remarks to Saudi Arabia’s human rights record, especially the murder of Washington Post contributor Jamal Qasogi.

However, after the Russian invasion of Ukraine and the month-long diplomatic mission of the Biden authorities, the president will visit Saudi Arabia later this summer and meet the real leader of the Crown Prince and Empire, Mohammed bin Salman.

Officials hope this visit will help boost oil production and facilitate peace deals in the Middle East, lowering gas prices in the process.

At the Port of Los Angeles on Friday, Biden modeled inflation as a global problem prompted by the epidemic and the persistence of Russia’s ongoing invasion, and he proposed his administration’s efforts to improve supply chains.

“Every country in the world is getting big cuts in this inflation – worse than most countries around the world,” he said. “But make no mistake about it: I understand that inflation is a real challenge for American families.”

But in a statement before the speech, Biden summed up his immediate and pressing issue: “We have to do more and quicker to reduce prices in the United States.”

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