Inflation Not Due to Supply Chain, Price Gouging

President Biden is wrong when he doesn’t recognize energy inflation, wage inflation, excess government spending, and monetary policy as the causes for today’s inflation.

President Biden continues to blame the high inflation on supply chain disruptions. Lately, he has put additional blame on businesses that he says are price gouging. The reality is that neither has much of an impact on inflation.

Today’s 7.5% inflation is partially caused by energy price and wage inflation, which are driving up costs for business. But the inflation is mostly caused by excess demand created by huge federal government deficits and a shockingly irresponsible Federal Reserve expansionary monetary policy.

It’s not difficult to see why those are the reasons for the extraordinary inflation. Let’s try an easy-to-understand explanation.

Simply put, prices rise when at the current price, the market is willing and able to purchase more goods than business is willing and able to produce. In other words, suppose at a price of $100, the market demand is for 10 units and the supply is 10 units, so the market is in balance.

Biden Fingers Supply Chain

President Biden would say that because of the supply chain disruptions, only 8 units are produced. So, if the demand is…