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In her latest column for the Washington Post, Catherine Rampell called on Democratic lawmakers who want to blame other sources, such as the Federal Reserve, for the bad economy rather than come up with policies to lift Americans out of an economic downturn.
Like President Biden and other government officials, Rampell claimed she doesn’t believe the US has entered a recession, despite the economy entering its second consecutive quarter of negative GDP growth — the traditional marker of a recession.
Still, she admitted that as far as the economic numbers are concerned, the Democrats in Congress “sound the alarm so they can avoid responsibility for the inevitable political consequences.”
Rampell argued that if recession fears are so high, these scapegoat lawmakers “should emphasize this risk in order to prepare for the potential humanitarian fallout (eg patching up the battered safety net).”
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The author stated, “They don’t want to take the blame for an economic collapse. So they preemptively blame the Federal Reserve, which raised interest rates again this week in an effort to curb inflation.”
Meanwhile, “aids to President Biden and the White House are trying to reassure Americans that no recession is on the horizon. There’s nothing to see here, they continue to say, pointing to strong job growth as the rest of the outlook darkens.” she wrote. , marking the two competing visions in the party.
Rampell pointed to several examples of the alarming, debt-shifting Democrats. Senator Elizabeth Warren, D-Mass., has warned of a ‘Fed-manufactured recession’ and has stated that the Fed tightening will only succeed in ‘laying many people off and making families poorer’.
She also mentioned Representative Pramila Jayapal, D-Wash., who has “suggested that the Fed is jeopardizing Biden’s promise to ‘grow the economy from the bottom up and off the middle,'” and the central bank admonished “the urge to resist raising interest rates further.'”
The Federal Reserve does have influence over monetary policy, and that’s where “the greatest risk of a recession right now lies,” Rampell acknowledged, adding that the institution can’t do much and it’s “in an almost impossible position.” is in’.
“Inflation needs to fall quickly before it becomes deeply entrenched in the economy and expectations of price growth trigger even more price growth,” she explained, adding that “rate hikes remain the most powerful tool available to achieve that goal.”
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On Wednesday, the Federal Reserve “raised its benchmark interest rate by 75 basis points for the second straight month as it tries to contain scorching inflation,” TBEN Business reported.
Rampell’s point was that the Democrats could “remove some pressure from the Fed” if they “really want to reduce the chances of a recession.” In this way, the fate of the economy ‘does not come down solely to monetary policy’. She added, “As I’ve often noted, Congress and the president have some tools to ease inflation (modestly).”
The columnist noted that Democratic lawmakers could do things like “repeal Trump-era tariffs,” “solve bottlenecks in the legal immigration system that contribute to labor shortages,” or “suspend shipping restrictions that reduce the cost of shipping goods by sea.” increase, including oil.”
“Instead, many Democrats spend their time demagogues about stupid things like ‘corporate greed,’ which will not affect inflation one way or the other,” she claimed, adding: “Worse, some are pushing policy. that could further increase demand, such as tax cuts or broad student debt forgiveness.”
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Rampell also warned Democrats are considering introducing “price controls,” which “would hinder supply.”
However, if the Democrats have done such things, they can always blame the Fed even more. Rampell concluded, “Those kinds of moves would force the Fed to raise rates even more aggressively. Which, again, makes a recession more likely. At that point, those same Democrats will presumably say, ‘I told you it was the Fed’s fault! ‘”