Here’s the Real Reason Inflation Keeps Surging

Inflation just hit yet another high. Consumer prices rose 7.5 percent from January 2021 to January 2022, new data show. That’s the highest level in 40 years!

Cue the political blame game.

With the public deeply concerned about inflation, you can expect Democrats like Joe Biden and Elizabeth Warren to double-down on their absurd deflections blaming “corporate greed” and “monopoly power” for the ongoing price surges. (Spoiler alert: that’s not it. At all. Economists almost all dismiss this notion out of hand, because corporations are no more greedy or monopolistic today than they were 5 or 10 years ago). 

Republicans will undoubtedly blame the Biden administration. On this front, they’re not so off-base. The president’s “solutions” for inflation are a complete joke, and he has signed into law trillions in deficit spending that is surely playing a role in the ongoing surge in prices. He has also made energy and other specific goods more expensive with foolish overregulation.

Still, the biggest culprit in all this is the Federal Reserve.

The nation’s central bank has created trillions of new dollars out of thin air since the pandemic began. This was supposed to “stimulate” the economy, but all it really did was send more money chasing fewer goods. As any economist will tell you, that’s a textbook recipe for inflation.

Here’s a graph of the money supply. Notice anything?

Money supply

“We know what causes this and we need to hold the Fed accountable,” economist Lee Coppock tweeted. “Money supply is up 40% in two years.”

So while there are absolutely fair criticisms to be of the Biden administration over the ongoing inflation crisis, we must not let the Federal Reserve off the hook. Until we hold America’s central bankers accountable, the American people will continue to have their savings erased and their wages eroded by policy-fueled inflation.

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Brad Polumbo
Brad Polumbo
Brad Polumbo is a libertarian-conservative journalist and co-founder of Based Politics. His work has been cited by top lawmakers such as Senator Rand Paul, Senator Ted Cruz, Senator Pat Toomey, Congresswoman Nancy Mace, Congressman Thomas Massie, and former UN Ambassador Nikki Haley, as well as by prominent media personalities such as Jordan Peterson, Sean Hannity, Dave Rubin, Ben Shapiro, and Mark Levin. Brad has also testified before the US Senate, appeared on Fox News and Fox Business, and written for publications such as USA Today, National Review, Newsweek, and the Daily Beast. He hosts the Breaking Boundaries podcast and has a bachelor’s degree in economics from the University of Massachusetts Amherst.