What the Biden plan gets right on inflation

Joe Biden laid out his plan for fighting inflation today in a Wall Street Journal op-ed. The knock on it is that he mostly acknowledges that taming high inflation is largely out of his control. But the strength of Biden’s plan is what it doesn’t contain: He avoids the most common policy mistake that politicians make in response to inflation.

Here’s Biden’s inflation-fighting plan in a nutshell:

• Let the Fed do its job: He says the US Federal Reserve has a “primary responsibility” to fight inflation and vows not to interfere. And he agrees with the Fed’s assessment that inflation is the top economic challenge in the US right now.
• Address supply shortages throughout the economy: He urges Congress to pass clean energy tax credits and investments that he claims would lower energy costs over time, and notes that he released oil from the Strategic Petroleum Reserve earlier this year. He points to his recently announced housing policy, which aims to increase the number of homes being built in order to lower prices. He also nods toward lowering drug prices (a plank in the Build Back Better bill that hasn’t made it through Congress) and mentions cracking down on exorbitant fees for ocean freight to address supply chain issues.
• Lower the deficit: In addition to winding down pandemic relief programs, he proposes eliminating tax loopholes in order to raise more revenue.

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