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The clearest thing established by the White House's attempt to downplay the swift rise in inflation is that the Biden administration is increasingly out of touch with the American people. One of their principal arguments for not worrying about inflation was that a large portion of the rise in the Consumer Price Index was driven by just a few items related to the reopening and the big drive up in used car prices. And then, if you control for "base effects" and ignore food and energy, core inflation was just 3.1 percent, the Council of Economic Advisers tweeted this week.

Well, yes. We could do one better. If you ignore all the things that went up in price, there's no inflation at all. Prices are falling if you ignore all those that held steady as well.

The thing about core inflation is that it overlooks the necessities of life. But food and fuel make up a huge part of household budgets; and when those things go up, the American public feels it. Bacon, for instance, is up almost 90 cents since Biden took office. Milk is up 5.6 percent. Used cars and gasoline are up by around 45 percent from a year ago. Major appliances are up 13.7 percent, and laundry machines are up nearly 30 percent.

In any case, this is an abuse of the concept of core inflation. The purpose of excluding food and fuel from core inflation is to smooth out month-to-month volatility, not to disguise long term trends to higher prices. And the University of Michigan's survey of consumers for July showed on Friday that the American people are not buying it, so to speak. Complaints about the prices of houses, autos, and durable goods are at their highest level ever, the survey's chief economist Richard Curtin said on Friday.

Professor Curtin helpfully explains that there are two phases that occur when inflationary psychology takes hold. In phase one, the public pulls back from purchases, aghast at the high prices, hoping prices come back down, and planning to save up money as a "precautionary hedge." That seems to be about where we are now, with consumers holding back some buying power. In phase two, consumers panic and decide to go on a buying spree in an attempt to snap up products before they become even more expensive. That, of course, creates even more inflation. According to Professor Curtin, who has been running the consumer sentiment survey for decades and might know a thing or two about such matters, phase two will begin early next year if inflation is still running high.

So there's your deadline for "transitory" inflation. If it is still going into next year, buckle up because the ride's about to get rough.

– Alex Marlow & John Carney
Breitbart News Network