Congressional Democrats Just Offered Their Best Inflation Plan Yet

Democrats have been struggling to respond to the highest inflation America has seen in 40 years. Many on the left are pushing a bogus “greedflation” narrative that blames rising prices on corporations’ desire to maximize profits, as if that were some new phenomenon. Others have proposed to compensate consumers for higher prices with cash handouts that will likely only make the problem worse. And Republicans, who sharply criticize Democrats’ approach to inflation, have offered no constructive ideas of their own for tackling the problem. Thankfully, the moderate New Democrat Coalition (NDC) came forward today with a pragmatic 24-page Action Plan to Fight Inflation — and it’s the best inflation-fighting blueprint to come out of Congress yet.

Fighting inflation requires an understanding of what drives the problem. First, supply chain disruptions caused by the COVID pandemic reduced the availability of goods and services. Then demand for those goods and services, bolstered by excessive government stimulus, reached unprecedented levels as the world began returning to normal. The result: too many dollars chasing too few goods and services, thus driving up prices. The problem was only made worse when Russia’s unjustifiable invasion of Ukraine cut off food and fuel exports.

The Action Plan would strengthen global supply chains and increase price competition by reducing tariffs and other barriers to trade. Tariffs not only raise prices for consumers by adding a surcharge on goods produced in whole or in part from overseas, they also enable domestic firms to raise their prices without increasing supply because competition is reduced. Industries that are entirely domestic are also more vulnerable to sudden contractions in supply that create shortages, as the United States recently experienced with the catastrophic baby formula shortage. Strengthening global supply chains will help prevent similar crises from arising again in the future.

Democrats' unpopular anti-tech crusade 

President Biden’s policies have helped to subdue the COVID pandemic and put people back to work. But he’s getting little credit because Americans are transfixed by soaring prices for fuel, food and other necessities.

Inflation hovers like an alien spaceship over the Democrats’ midterm election prospects. U.S. voters say they trust Republicans over Democrats to handle it, by a whopping 19 points. They also give Republicans a 14-point lead on managing the economy.

To make matters worse, some congressional Democrats are pressing for a vote this summer on ill-conceived “antitrust” legislation aimed at dismantling America’s most innovative and competitive tech companies.

With inflation eating away at working families’ purchasing power, it’s hard to imagine a more effective way for Democrats to show they are out of touch with voters’ everyday economic struggles.

Yet again, party leaders again are letting the progressive left’s ideological zeal dictate their economic agenda. That’s triggered private grumbling by some Senate Democrats facing competitive re-election campaigns this fall. California Democrats who represent lots of tech workers understandably are balking, too. In general, however, the party’s pragmatic, pro-growth wing, which should be a forceful champion for U.S. high-tech innovation, has yet to find its voice.