EDITORIAL: Biden crosses fingers as inflation spikes again

As consumer prices soar, the Biden administration has taken its cue from the climactic homecoming parade scene in “National Lampoon’s Animal House” when a young Kevin Bacon’s character frantically pleads with the stampeding spectators, “Remain calm! All is well!”

With this week’s bad inflation news, however, the nothing-to-see-here-move-along approach will get more difficult to pull off.

The government on Tuesday reported that the Consumer Price Index increased 5.4 percent in June from the same time last year, the biggest jump in 13 years. The higher prices reflected a pattern across a wide swath of the economy, including tourism and travel, vehicles, entertainment and dining. The Associated Press reported that core inflation — which does not include volatile items such as food and energy — leapt 4.5 percent, the highest increase in nearly 30 years.

Defenders of President Joe Biden’s unprecedented spending sprees have argued that the inflation numbers look deceptively bad because current prices are being compared with the dismal conditions during the middle of the pandemic. That’s true. But June prices also increased 0.9 percent from May, indicating something more significant may be at work.

The White House continues to insist that any problem is “transitory” and will evaporate come fall as the economy ramps up to pre-COVID levels and more workers take jobs. Perhaps. But that’s little solace to those who getting financially hammered today every time they step behind a grocery cart.

Mr. Biden vowed he wouldn’t raise taxes on anybody making less than $400,000 a year. Given the enormous size of his “free stuff” agenda, that’s an empty vow in the long run. In the immediate future, however, inflation represents a crippling tax on lower- and middle-income workers. The longer prices inch upward, the bigger political headache this will become for the president, particularly given the fact that many Americans have never lived through periods of consistently rising prices.

Even some Democratic economists have warned about superheating an economy poised for recovery with unprecedented levels of government “stimulus” and transfer payments while the Fed maintains its easy money policies. The latest inflation numbers “and labor market tightness and the behavior of housing markets and asset prices,” Lawrence Summers, former Treasury secretary under Bill Clinton, told Politico, “are all rising in a more concerning way than I worried about a few months ago.”

But all is well, the president’s economic team maintains — and if it isn’t, they’ve got the tools to fix what needs to be fixed. So far the financial markets agree. The coming months will tell the tale.

In the meantime, Mr. Biden might do himself a favor and call Jimmy Carter.