WASHINGTON, D.C. — Inflation numbers continue to increase, and so does Sen. Joe Manchin’s frustration about the issue.
“Everyone should be wound up,” Manchin (D-W.Va.) said February 10 on MetroNews’ Talkline radio program. “This is avoidable. This is self-inflicted. Now is not the time to be putting more fuel on the fire, let’s start putting the flames out.”
On Thursday, the federal Bureau of Labor Statistics issued its latest Consumer Price Index. It rose 7.5 percent in January, the highest since it hit 7.6 percent in February 1982. The CPI – which measures a number of goods ranging from gasoline and health care to groceries and rents – jumped 0.6 percent in the one-month period from December.
Food and energy prices both increased 0.9 percent from December to January, and the 12-month rolling average for energy shows a 40 percent increase.
Manchin also issued a statement about his concerns.
“For months, I have been ringing the alarm bell about inflation,” he said. “Once again, we are witnessing that the threat of inflation is real. There is not a corner of this nation where hard-working families are able to escape the noticeable impact of this ‘inflation tax.’
“Inflation taxes are draining the hard-earned wages of every American, and it’s causing real and severe economic pain that can no longer be ignored. It’s beyond time for the Federal Reserve to tackle this issue head on, and Congress and the Administration must proceed with caution before adding more fuel to an economy already on fire.”
Manchin said it’s time to get serious about the nation’s finances.
“As inflation and our $30 trillion in national debt continue a historic climb, only in Washington, D.C., do people seem to think that spending trillions more of taxpayers’ money will cure our problems, let alone inflation,” he said. “It’s time we start acting like stewards of our economy and the money the American people entrust their government with. Now, more than ever, we must remember it is not our money, it’s the American people’s money.
“It is not our economy, it’s their economy. We all have a responsibly to do all that is possible to roll back inflation and manage our debts because the longer we or the Federal Reserve waits to act, the more economic pain will be caused.”
Manchin cited inflation as a key reason he couldn’t support President Joe Biden’s Build Back Better plan.
“If you get behind the eight ball in debt, you’re going to make cowardly decisions,” he told Talkline host Hoppy Kercheval. “We’re getting to the point we’re not managing the debt of the nation. Make corrections now before it becomes too painful, which is everything I’ve been saying for the past year.”
Manchin also said the Fed needs to look at raising interest rates.
“It’s the only way they’ve ever been able to control it (inflation),” he told Kercheval. “If you don’t, it’s just going to continue to run. It’s the highest in 40 years and we’re not doing anything about it. We’re just sitting back and watching it.”
Others agree that the Fed needs to focus on its job.
“The inflation report demonstrates why monetary stability is priority number one,” Wayne Winegarden, a senior fellow in business and economics for the Pacific Research Institute, told The West Virginia Record.
Another issue regarding the Federal Reserve is Biden’s pick of Sarah Bloom Raskin as his nominee for Vice Chair for Supervision at the Federal Reserve Bank. Raskin, a Duke University law professor, has been outspoken in pushing the Fed and other financial agencies to use regulatory powers to stifle the flow of capital to the coal, oil and natural gas industries. She was questioned last week by the Senate Committee on Banking, Housing and Urban Affairs.
And in a 2020 New York Times opinion piece titled “Why is the Fed Spending So Much Money on a Dying Industry?,” Rasin said the Federal Reserve should use its power to withdraw capital from traditional energy sources such as coal, oil and natural gas and direct it toward emerging technologies.
If Raskin is confirmed, Winegarden said it would further signify the Fed is moving further away from its primary objective.
“The most important focus of the Fed is and should be inflation and price stability,” Winegarden said. “That needs to be job number one. And right now, they’re failing at that. Other issues are overwhelming this. They need to keep their focus on that.
“What the fed does is so incredibly important. It can be esoteric and boring, but maintaining the right amount of money for the economy is a terribly important and difficult job. You need people focused on monetary policy, not other matters.”
He also said Raskin’s nomination risks the independence of the Fed.
“You’re politicizing inflation,” Winegarden said. “You don’t want politicians playing games with this. But the flip side is staying out of the politics. If you’re on the Fed board and saying you need political independence, you also have to be politically independent.
“There is a danger this nomination demonstrates that we would be taking the Fed away from its very important role and jeopardize its independence by inserting it in political issues that need to be resolved in the political realm.
“We shouldn’t bastardize the role of the Fed by allowing them to get into politics. They’re independence is important, and they have the obligation to be independent.”
Winegarden said Manchin should see the impact all of these factors would have on West Virginia.
“You would hope that Senator Manchin would consider these impacts because his constituents are at risk,” he said.
The president and CEO of a trade association supporting coal-fueled electricity agrees about Raskin and her anti-fossil fuel views.
“This position is responsible for developing the Fed’s supervisory and regulatory priorities and, as such, influences financial institutions which are a source of capital for the fossil fuel industry and other sectors of the economy,” Michelle Bloodworth of America’s Power said in a February 6 letter to members of the Senate Committee on Banking, Housing and Urban Affairs. “While Ms. Raskin might be qualified in other respects for this position, her views nonetheless indicate a disturbing bias against fossil fuels and a fundamental lack of understanding about the benefits of coal-fired electricity.”
Bloodworth also cited the 2020 New York Times piece, calling Raskin’s comments there “unfortunate statements.”
“The statements … by the nominee become self-fulfilling if they are reflected in the Fed’s priorities,” Bloodworth wrote. “Sending signals or adopting policies that undermine the financial community’s confidence in fossil fuels will harm the nation’s fleet of coal-fired power plants, the coal industry, its employees, and the supply chain that supports this essential resource. This also harms electricity consumers.
“We urge the committee to ensure that nominees do not hold views or support policies that are biased against investments in any energy resource — regardless if it is coal, gas, oil, nuclear, hydro, other renewables, storage technologies, or energy efficiency — because a diverse resource mix is the best way to ensure reliable, affordable, and secure energy supplies.”