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ANALYSIS | Joe Biden and Jeff Bezos are locked in the stupidest fight in history

2022-05-17T23:26:38.193Z

The discussion between the president of the United States and Jeff Bezos on the causes of inflation stands out for both its awkwardness and its simplism.



Biden tweet draws criticism of Bezos for "misinforming" about inflation 1:13

London (CNN Business) --

Among the many silly, boring, agenda-driven exchanges happening on Twitter at any given moment, the one taking place between the president of the United States and the world's second-richest person stands out as much for its clumsiness as well as for its deliberate simplism.


If you've been away from Twitter lately, first of all: congratulations.

This is a quick summary of the feud between Jeff Bezos and President Joe Biden.

On Friday, Biden tweeted that the way to bring inflation down is to "make sure the richest corporations pay their fair share."

Bezos, founder of Amazon, an absurdly rich corporation, took issue with that.

He fired back, saying tying corporate taxes to inflation is "just misleading."

The White House replied, and then Bezos replied again.

In short, Bezos believes that the federal stimulus payments caused the inflation.

Biden says corporate greed is to blame.

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  • How long will inflation last?

    The answer is in the past

They are both right.

And both are exaggerating their positions.

The truth is that inflation does not have a single cause.

Did the nearly $2 trillion in stimulus for families and individuals fuel demand for goods and contribute to the highest inflation in the last 40 years we're living?

Yes.

The consumer price index was below 2% in Biden's first full month in office.

Stimulus checks started arriving in bank accounts in March 2021, when the annual inflation rate rose to 2.6%.

In April, it reached 4.2%.

In May it exceeded 5%, in October 6% and now it exceeds 8%.

That's a point for the Bezos team.

(Though it's worth noting that unemployment went from 6.2% when Biden took office to 3.6% today, indicating a recovering economy.)

But did companies like Amazon enjoy record profits last year and continue to raise prices for consumers to protect their margins?

Of course.

  • ANALYSIS |

    Prices continue to rise and CEOs win

What neither Biden nor Bezos mention in their tweets are the myriad factors behind persistent global inflation.

Factors such as supply chain disruptions and shortages that are still being worked out due to the unprecedented global shutdown of the world economy two years ago.

Another force that no one seems to want to mention: the Federal Reserve's unprecedented intervention in financial markets that began in the spring of 2020. When the pandemic hit the United States, the Fed unleashed an avalanche of easy money while cutting interest rates. down to almost zero to avoid an economic collapse.

The policy, enacted under the Trump administration by Trump-appointed Fed Chairman Jerome Powell, kept stock markets frantic into 2021, as Bezos certainly knows: Amazon was arguably the biggest beneficiary of the pandemic economy, though its Stocks have been hit along with other tech stocks in recent months.

  • The price of gasoline in the US could reach $ 5 per gallon: these are the factors

Oh, and there's also a ground war in Eastern Europe that is disrupting world markets, sending food and energy prices through the roof.

In China, millions of people have been placed under strict Covid lockdowns, denting consumer demand and paralyzing manufacturing in the world's second-largest economy.

And if that wasn't enough: there remains an unresolved and psychologically complex imbalance in the labor market that is forcing companies to spend more on wages and other benefits.

Despite Biden and Bezos hinting that inflation can be fixed if businesses stop being greedy or the federal government stops spending so much money, there is no easy cure.

InflationJeff BezosJoe Biden

Source: cnnespanol

All news articles on 2022-05-17

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