Ask Republicans—who will win both houses of Congress next month—what to do about inflation, and they’ll reply: “Cut spending.” They might add cut taxes and regulations so the economy can produce more products and services, thereby lessening the pressure on prices.
But they usually omit the role of the Federal Reserve, which, as this episode of What’s Ahead warns, is a dangerous oversight. Republicans need to understand how the Fed sees its role and its assumptions that underlie its operations. Otherwise, they could be blindsided by central bank errors and get the blame for them.
Much of the financial turmoil roiling Britain is the result of blunders by the Bank of England, but the hapless government of the soon-to-be-former Prime Minister Liz Truss got tagged with the blame.
President Biden has already declared that if the GOP wins, inflation will get worse. This is typical Biden blarney. But Republicans had better be prepared to fight back and to hammer home the flaws of the Fed, particularly its unfounded belief that making people poorer is the way to fight inflation.