What He Said

 Jon Chait asks a question that I have been trying to figure out for a while now. Why hasn't Biden repealed Trump's tariffs to combat inflation? Chait correctly identifies inflation as the biggest problem facing Biden and the single greatest threat to his presidency and therefore arguably the future of American democratic governance.

There are two main sources of inflation: energy and the broad issue of "supply chains." Energy is largely beyond his control, unless he can assassinate Vladimir Putin and end the war in Ukraine. Some of the supply chain issues of the lingering pandemic are also beyond his control. He can't control China's lockdowns, for instance.

The tariffs were designed by Trump to "bring jobs back to America." The problem is that bringing jobs back isn't really the problem right now. Employment is high, wages are rising...there is no need to protect American workers, it's American consumers who need help. This is always the double edged sword of global trade: lower wages but also lower prices for consumer goods. Right now, lower wages are not the issue.

The idea that these tariffs are being held hostage to China Hawks seems weird because we still have tariffs (as far as I know) on Canadian lumber, because Trump hated that Ivanka got all hot for Justin Trudeau or something. But it appears that Biden actually INCREASED tariffs on Canadian lumber. Like...doubled them. Right in the middle of a housing crunch. Those tariffs are going down in August, but none of this makes any sense, if you're trying to fight inflation. 

Energy is the biggest driver of inflation right now, and there's not much Biden can do about that. Energy increases add cost to everything that is being transported to markets. But tariffs are making it even harder to bring prices under control.

There's an argument that Biden "overlearned" the lesson of 2008-9 of under-stimulating a recovery and has overstimulated the economy. You could argue that he has, in fact, overlearned the lesson of Clinton, Sanders and Trump - that free trade leads to populist demagogues. Right now we are seeing the limits of that demagoguery. 

Biden needs to address inflation now for it to have an effect on the midterms. There's not enough urgency for my taste.