Republicans and the conservative media began blaming Joe Biden for skyrocketing inflation and gas prices just a few months into his presidency.  Who doesn’t recall the incessant rebukes for creating the “highest inflation in 40 years” and gas prices in excess of $5 per gallon?

Republicans point to excessive spending by Biden and the Democrats as the cause of skyrocketing inflation.  In particular, the American Rescue Plan Act and the Inflation Reduction Act created trillions in new spending that “overstimulated the economy and provided slush funds for Democrats’ radical agendas.” 

As to spiraling gas prices, Republicans blame Biden’s cancellation of the Keystone XL pipeline, along with a host of other actions to promote his green agenda and reduce the production of fossil fuels.

Republican narratives blaming Biden don’t stand up.

Numerous fact checks have refuted claims that Biden is responsible for high inflation and gas prices (e.g., see Politifact and FactCheck.org).  My own analysis acknowledges that federal spending was “a factor” contributing to high inflation, but that several other factors were primarily responsible. Those factors include massive economic disruptions due to Covid-19, supply chain problems, Russia’s invasion of Ukraine, actions or inactions by the Fed, and profiteering by American businesses.

As to gas prices, the Keystone XL Pipeline was not even in production at the time the permit was cancelled.  US Field Production of Crude Oil returned to pre-pandemic levels in 2022.  The US Energy Information Administration (EIA) projects that 2023 and 2024 will bring new records in crude oil production.  

Recently, I uncovered additional evidence that Biden and the Democrats are not responsible for high inflation and gas prices. I decided to investigate US inflation and gas prices over time, in comparison with other countries.  I started by comparing the US and Canada, in terms of the Consumer Price Index (CPI) and gas prices.  In the graph below, I display the CPI of Canada (red) and the US (blue) going back to 2012, using the chart wizard on Countryeconomy.com.

What jumps out on this graph is how similar the two countries are in terms of the ups and downs of the CPI. When the Canadian inflation rate increases, the US inflation rate increases.  For instance, when the US rate peaked at 9.1% in June of 2022, the Canadian rate reached a high of 8.1%. Similarly, when the Canadian rate decreases, the US rate decreases.  Since 2017, the Canadian rate has tended to be just below the American rate.

Obviously, spending by Biden and the Democrats has no effect on the Canadian CPI.  Yet, the Canadian CPI went up precipitously between the last half of 2021 and the first half of 2022. If Biden’s spending was the primary cause of the US CPI increase during this period, and we know that this spending didn’t affect the Canadian CPI, what caused the Canadian jump?  The fact that the US and Canadian CPI’s tracked each other in the usual historical pattern suggest that the inflation increase in both countries during this period was primarily due to factors other than Biden’s spending (e.g., Covid-19 disruptions, supply chain issues, Russia’s invasion of the Ukraine (February 2022), and profiteering by businesses).

To confirm, I went to the website of the International Monetary Fund (IMF Data Mapper). I examined the US inflation rate against the average inflation rate of the world’s 18 advanced economies, going back to 1980.  Again, I found that the inflation rates track one another closely over time.  The average rate for the 18 economies spiked between the last half of 2021 and the first half of 2022, just as it had done for the US.   

As to gas prices, below I display average gas prices (regular) in Canada (red) and the US (blue) over six years (2017-2023, using the GasBuddy Gas Price Charts.   

Again, what jumps out on this graph is how similar the two countries are in terms of ups and downs of gas prices.  Canadian gas always costs more than US gas (usually about $2.00 per gallon more, due to higher gas taxes in Canada).  When the price of gas goes up in Canada, the price of gas goes up in the US.  And, when the price of gas goes down in Canada, the price of gas goes down in the US.  These trends occurred during both the Trump and Biden Administrations. 

Biden and the Democrats clearly do not control Canadian oil production or prices. Yet, the price of gas in Canada clearly spiked during the last half of 2021 and the first half of 2022.  This suggests that other factors were mostly responsible for the increase in US gas prices, including supply chain problems, OPEC actions, Russia’s invasion of the Ukraine, and profiteering by oil companies. 

As the original narratives lost steam, Republicans created new narratives to blame Biden for other economic woes.

The June 2023 inflation report from the Bureau of Labor Statistics indicates that the Consumer Price Index (CPI, 12-month percentage change) dropped to 3%.  Thus, since June of 2022, the inflation rate has dropped from 9.1% to 3%. Going back to 2017, the graph below shows that the inflation rate has almost returned to pre-pandemic levels.

As to gas prices, GasBuddy reports the US average retail price per gallon of regular gas went from $5.02 per gallon on June 15, 2022, to $3.53 per gallon on July 15, 2023. The graph below depicts average per gallon prices since 2018. While prices definitely dropped during the pandemic, and while prices definitely peaked in June of 2022, they are only about 50 cents per gallon higher than they were in 2018 and 2019. 

With inflation and gas prices returning to near-normal levels, the original narratives are no longer compelling.  Republicans have thus revised their narratives to blame Biden for other economic woes. 

Jason Smith, the Republican Chairman of the House Ways and Means Committee, succinctly captures many of the new talking points:

“Small businesses and workers are being harmed by weak economic growth and the Fed hiking interest rates to combat inflation created by Democrats’ reckless spending. Even job growth is darkened by the fact that wages have not kept up with a 15.5 percent increase in prices since Joe Biden took the Oath of Office. For 26 straight months, wages have not kept up with inflation, shrinking the value of every paycheck bit by bit. Meanwhile, rising interest rates have made the American Dream of buying a house or expanding a small business a fantasy for many.”

In August of 2022, I predicted Republicans would abandon the high inflation and gas price narratives and shift to the narratives described above. To combat inflation, the Fed has adopted a series of interest rate hikes designed to cool down the economy along with the rate of inflation.  As a part of this “tough medicine”, it is known that GDP growth will slow, the country could enter a recession, loans will be less affordable for businesses and individuals, job growth could slow, and unemployment could spike.  In essence, Republicans have taken the “tough medicine” effects of interest rate hikes by the Fed and pinned them on Biden. 

The new Republican narratives are also flawed and misleading.

The new narratives are spurious for several reasons.  First, as has been shown, spending by Biden and the Democrats was not the primary cause of high inflation and gas prices.  Second, it is the Fed that has raised interest rates, not Biden and the Democrats.  Third, the Fed is an independent body not controlled by the President. 

In addition, the statistics used in the narratives are questionable and outdated.  The “15.5% increase in prices since Biden took office” is a statistic recently invented by Roll Call reporter David Winston, which he calls the “Presidential Inflation Rate.”  This statistic is not in common use.  Also, both the 15.5% increase in prices, and the 26 straight months where wages did not keep up with inflation are measured from the time Biden took office until February 2023.  Since that time, the inflation rate has dropped substantially and wage growth has exceeded the rate of inflation. 

Biden and the Democrats have spun narratives taking credit for positive economic developments.

While the party out of power tends to blame the President and his party for economic woes, the President and his party tend to take credit for improving the economy.  President Biden and the Democrats have crafted a set of narratives claiming credit for several positive economic developments.  Here are some taken from Joe Biden’s White House.gov website and various press releases or speeches:

• Nearly 11,000,000 jobs have been created since Biden came into office, constituting the highest two years of job growth in history
• Under Biden, the unemployment rate reached a historically low 3.5% (lowest level in 50 years)
• President Biden rescued the economy and changed the course of the pandemic
• Biden brought inflation down from a 40-year record high of 9.1% to 3% currently—all in just 1 year
• Joe Biden helped bring gas prices down more than $1.60 from their summer 2022 peak
• President Biden rebuilt our nation’s infrastructure with the Infrastructure Investment and Jobs Act, which will create millions of new jobs in America
• Biden claimed that the US had the fastest growing economy in the world in June of 2022

But most of Biden’s narratives are also flawed and misleading.

Here, briefly, are some reasons why the narratives described above are problematic:

• In terms of job creation, the US economy lost 20 million jobs due to the Covid-19 pandemic.  Most of the jobs added during Biden’s first two years simply restored employment to prior levels.  Also, Presidents and their policies are certainly a factor in job creation, but many other factors drive this condition. 
• As to the unemployment rate, it’s true that the rate reached a low of 3.4% in January 2023.  But the rate has ticked up since.  Also, during the Trump Administration the unemployment rate reached a low of 3.5%.  More important, Presidents and their policies are a factor in the unemployment rate, but many other factors are at play in producing this condition.
• In terms of the pandemic and rescuing the economy, Biden’s actions alone did not change the course of the pandemic and rescue the economy.  Stimulus measures passed during Trump’s Presidency certainly helped to rescue the economy.  Also, Trump’s actions to fast-track vaccines also changed the course of the pandemic.  Certainly, President Biden helped to rescue the economy and change the course of the pandemic; but this is not what the narrative claims.
• While the inflation rate (CPI) has declined from 9.1% to 3% in just one year, the principal reason for the decline is a series of interest rate hikes adopted by the Fed.  Biden is not the one who increased interest rates, nor does he have control over the Fed. 
• Gas prices have declined substantially since reaching their peak in the summer of 2022.  Biden did increase the supply of gas by ordering releases from the strategic petroleum reserves.  But many other factors affect the price of gas, including world oil supply, wars, OPEC policies, supply chain problems, and profiteering by oil companies.  The narrative attempts to recognize this reality by saying that Biden “helped” to bring gas prices down. 
• Clearly, the passage of the Infrastructure Investment and Jobs Act is a shot in the arm in terms of rebuilding America’s infrastructure.  Also, Biden deserves credit for securing enough bipartisan support for Congress to enact the measure.  But Biden’s promise of millions of new jobs has been debunked.  Also, Biden claimed that modernizing America’s airports, “means fewer delays that drain so much money from families and from businesses.”  This statement has also been debunked.
• The US is not the world’s fastest growing economy.   

Most partisan narratives regarding the economy are suspect because they primarily blame or credit Presidents for economic conditions which are, in fact, caused by numerous factors.

Economic conditions such as inflation, GDP growth, wage growth, unemployment, poverty, gas prices and recessions are not controlled by Presidents and their political parties.  Their combined actions and policies are certainly one of many factors that influence economic conditions.  But other factors, cumulatively, are far more powerful.  Events such as wars and pandemics, along with global economic conditions, are the real drivers.  In addition, the private sector and the free-market economy have much more influence on economic conditions than do Presidents and their political parties.

In the US, it’s typical for the party out of power to blame the party in power for practically every economic woe. Also, the party in power typically takes credit for positive economic developments. But this doesn’t mean they’re right. It’s foolish to categorically blame Biden and the Democrats for high inflation, gas prices, or slow wage growth. It’s also foolish for Biden to claim credit for reducing the rate of inflation, creating huge job growth, reducing gas prices, and lowering unemployment.  The same is true of Trump. He did not create the low levels of inflation and unemployment that existed for most of his term.  He simply took credit for trends in inflation and unemployment that were mostly driven by external factors.  Yes, both of these Presidents had a modicum of influence on economic conditions; but it’s absurd to categorically blame or give them credit for the ups and downs.   

The preoccupation with blame and credit for economic conditions is hurting the country.  Tens of millions of Americans have been duped by false or misleading narratives. The narratives stoke anger and resentment toward the elected officials and political parties who have “caused” economic woes. The obvious solution is to vote them out in favor of a candidate we support. The problem is that neither those we oppose nor those we support have any real control over economic conditions.  And the modicum of control elected officials do have is seldom exercised because of fights over blame and credit.  Thus, even if we succeed in electing our chosen representatives, they’ll be saddled with these realities. Our frustration only grows when the opposing party blames our representatives for any and all bad economic conditions.

The Way Forward

The path forward begins with questioning and discounting partisan narratives preoccupied with assigning blame or credit for ups and downs of the economy.  These narratives distort causation, and most are false and misleading.  As citizens, we need to become adept at spotting and fact checking these narratives. We also need to call them out.  Political parties and candidates won’t stop using these narratives because they help win elections. As long as one political party continues the practice, the other will not change its ways. The American people thus need to tell political parties and candidates that we’re not buying the narratives and we aren’t going to let ourselves be divided and angered.

As a second step, we need to educate the American public on some basic facts regarding the economy. First, external forces drive most economic conditions. Second, government actions and policies only partially contribute to economic woes. Third, the government has limited authority to address these woes. And, fourth, real solutions require bipartisan cooperation and coordinated action by the President, Congress, the Fed, and other entities.  We need to treat bad economic conditions as national emergencies that compel us to come together to defeat a common enemy. Our raison d’etre is to overcome the economic crisis. The preoccupation with winning elections by obsessing over blame and credit is antithetical to this purpose.

Our future will inevitably confront us with recessions, wars, pandemics, high inflation, high unemployment, and other economic woes.  There is hope if we can come together on common ground solutions to get us through these difficult times.  Blaming one another for difficult economic conditions is a foolish approach that has only divided and angered us as a country.