A favorite word in the Biden White House is “transitory.”
If you’re looking in the Merriam-Webster dictionary, transitory means “of brief duration,” or “tending to pass away.” Transitory gets used to describe the vast array of issues facing the United States economy at the moment, and the Biden administration wants you to believe that every pain you’re experiencing will be short-lived.
Treasury Secretary Janet Yellen continues to repeat the transitory line on inflation and supply chain issues at the moment. But even she’s starting to give more wiggle room. “I believe it’s transitory. But I don’t mean to suggest that these pressures will disappear in the next month or two,” Yellen told CBS Evening News.
It depends on what the meaning of “short-lived” means. It’s not forever, but it’s also not just a few months. It’s somewhere in-between.
Atlanta Federal Reserve President Raphael Bostic is going further, saying “he and his staff will no longer refer to inflation as ‘transitory,'” according to MarketWatch, “because the current ‘episode’ of inflation could persist for quite awhile, perhaps well into 2022 or beyond.”
There’s a two-fold reason we’re seeing a change of tune on the issue of inflation now. First, we’re now ten months into the year with increasing inflation every step of the way. Prices are pushing higher, supply is still feeling a crunch, and the risks to more inflation issues continuing going up instead of abating.
It was fine to argue things were transitory in February; it’s a harder sell in October when everyone knows the issues will persist through the first quarter of 2022 with little relief in sight.
The second reason is that the causes of inflation aren’t going anywhere, and the bottlenecks are so backlogged. It will take months to clear the issues. It’s easy to see that inflation and supply chain issues will continue unabated for the next six months, and beyond that, who knows.
According to a survey by the Wall Street Journal of economists, “Uncomfortably high inflation will grip the U.S. economy well into 2022, as constrained supply chains keep upward pressure on prices and, increasingly, curb output, according to economists.”
Retailers are already warning that they might be unable to get products on the shelves and into consumers’ hands in time for Christmas, and there’s nothing they can do about it.
On top of all these issues, oil and energy prices are hitting multi-year highs, and energy scarcity, in general, is impacting both the supply and energy markets. One of the drivers of higher prices in the United States is California, where the state is scrambling to find replacements for energy since they’re shutting down nuclear and natural gas-powered plants, leading to a drop of 10% of their overall energy production.
So how long will it take to move beyond “transitory” and return to normal? As former President Bill Clinton once said, it depends on the meaning of what the word “is” means. It depends on how much leeway and time you give for this to become a story in the news and a significant disruptor in American life that people want to be fixed ASAP.
We’re already approaching the political point where inflation matters and impacts decisions in politics and elections. Biden started his administration with a 35% disapproval rating, but now he’s underwater.
According to the latest RealClearPolitics averages of polls over the weekend, Biden now has a 52% disapproval rating. The trendlines continue moving in the wrong direction for the president.
You can overlay pretty much any chart of inflation over that same period, and the more inflation numbers go up, the more Biden’s number tank. Obviously, there are other storylines in that time, where Biden’s failed leadership has dominated the news coverage. Inflation is — at times — an invisible drumbeat in the background, driving growing unrest with the American public.
Inflation is an invisible tax. The White House may like trumpeting higher wages or higher Social Security checks, but with costs going up every month, increased salaries and cost of living increases can’t keep up.
Combine all of this with supply chain bottlenecks growing and a White House nowhere to be found until recently. You get the toxic mix of politics for the president.
Nothing about his moment suggests the problems will let up until well into 2022, at the earliest. A year and a half of higher prices, supply chain disruptions, employee shortages, and more aren’t most Americans’ definitions of a short-term problem.
Clicking your heels three times and shouting, “Transitory! Transitory! Transitory!” won’t make the problems go away. But that seems to be the game plan for the White House.
Ignoring a problem and hoping it goes away is how they’ve handled the pandemic, Afghanistan, inflation, and more. It may work in dealing with the press, but with cratering approval numbers, Americans aren’t buying it.