On the latest episode of CNBC’s “Squawk Box,” Transportation Secretary Pete Buttigieg replied to a question about whether the Biden administration can take credit for lower inflation rates after previously attributing them to other factors such as Russia and “Putin’s cost hike” by saying that “we responded with a description of the things that we had been doing” while recognizing that there are “many things that contribute to this.”
“Inflation, it is coming downward now, and the current administration including President Biden is going to claim credit for it dropping down,” said co-host Joe Kernen. “My main concern is that, whenever we’ve discussed it in the past, nobody has ever claimed responsibility for the country’s high inflation rate. It wasn’t the money spent on COVID. It affected the entire world, it’s all over the place, and there’s nothing we can do about it since it’s global inflation and Putin’s price rise. However, now that it is decreasing, it is like, Look what I did, I reduced inflation. And that is illogical. It is not logically sound.”
“I don’t believe that’s exactly fair for a lot of reasons,” Buttigieg retorted. “First of all, these global comparisons, yeah, we highlighted that inflation in the U.S. wasn’t something that was occurring only in the United States; it was happening throughout the world. But we also highlighted all the ways in which we were outperforming many of our international counterparts. This was especially true when it came to our economy, which recovered from COVID at the fastest rate among wealthy nations, and I believe it is still true today in our fight against inflation.”
“The second point is that anytime we were asked, What are you doing regarding inflation? We answered with a list of the actions we were taking that we believed would have an impact. Therefore, I believe it to be entirely fair game, especially considering that when we announced the Inflation Reduction Act a year ago, some individuals claimed that it would result in higher inflation. Now that inflation is declining, I believe it’s crucial to emphasize the following: We had an inflation issue, we enacted an Inflation Reduction Act, and now inflation is declining. Even while we acknowledge — just as we did before — that there are many factors involved in this, how could we not point to that series of events?”
Kernen interjected to inquire about the Inflation Reduction Act’s real implementation.
“Well, look, it is certainly — you know, individuals were claiming that this will cause markets to instantly react by shifting in directions which are likely to be inflationary,” Buttigieg said in response. “That obviously didn’t take place. The work our government has done in both the short and medium term to deal with issues that we know cause inflation is another item I’d want to highlight. So, for instance, in my field of transportation, we discuss supply chain difficulties a lot, am I correct? Ensuring that we invest for the short, medium, and long terms. You handle supply chain problems, which reduces shipping costs. Inflation was fueled in part by rising shipping costs. And I believe that some of the work we did there is beginning to bear fruit. Regardless of whether we’re discussing supply chains in general or inflation in general, it isn’t a case of mission achieved.”
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