Steven Rattner, a former economic adviser for President Obama, blasted the Biden administration in a New York Times guest essay for getting the critical issue of inflation "so wrong," while reminding Democrats he and other economic experts "warned" them about this.
The U.S. Consumer Price Index is the highest it's been in 30 years, with prices up 6.2 percent from a year ago.
Rattner, who served as counselor to the Treasury Secretary in the Obama administration and has donated hundreds of thousands to Democrats, according to Federal Election Commission findings, asked, "How could an administration loaded with savvy political and economic hands have gotten this critical issue so wrong?"
He said it started with the $1.9-trillion coronavirus relief package President Biden signed this year.
"The original sin was the $1.9 trillion American Rescue Plan, passed in March. The bill — almost completely unfunded — sought to counter the effects of the Covid pandemic by focusing on demand-side stimulus rather than on investment," he wrote. "That has contributed materially to today’s inflation levels."
"They can’t say they weren’t warned — notably by Larry Summers, a former Treasury secretary and my former boss in the Obama administration, and less notably by many others, including me. We worried that shoveling an unprecedented amount of spending into an economy already on the road to recovery would mean too much money chasing too few goods," Rattner added.
Rattner also rejected Biden's pledges that his Build Back Better will help alleviate the problem. White House national economic director Brian Deese recently argued the $1.75 trillion social spending and climate package would help get people back to work and in turn "reduce price pressures."
"By providing affordable child care, affordable elder care, we’re going to help get those people back into the workforce, which will reduce price pressures while also reducing the practical costs that Americans face," Deese said. "That’s the case we’re going to make and that’s the case why delivering right now for the American people is the right thing to do."
But Rattner referred to it as "a package that front-loads spending while tax revenues arrive only over a decade." He cited research from the Committee for a Responsible Federal Budget, estimating that the plan would likely add $800 billion or more to the deficit over the next five years, "exacerbating inflationary pressures."
Rattner instructed the White House to start adopting "fiscal discipline," which he argues should include tax increases.
In recent weeks the media has warned Americans that this holiday season may be the priciest in decades.
"Inflation Rate Set to Spoil Holiday Season for Struggling Families," Bloomberg News reported.
"Inflation means Thanksgiving dinner will cost extra this year," a CNBC headline read.
"This Year's Thanksgiving Feast Will Wallop the Wallet," the New York Times wrote.
Rattner suggested the inflation rate will continue to harm Democrats at the polls in upcoming elections.