Janet Yellen and Nancy Pelosi have come to the White House to discuss policy and political responses to inflation.
B: So, you’re here to help us deal with stagflation!
Y: Not exactly. We’re a long way from the late seventies.
B: The Republicans don’t think so. They’re making me out to be the new Jimmy Carter. What a load of malarkey!
P: I agree, Mr. President. Things aren’t nearly as bad as they were then, and the problem will go away in time.
B: I remember those days. I bet you do, too. It seemed some new group was marching on Washington to demand more money every day. The country was falling apart. The economy’s not that bad now, although the political situation is worse, with Trump and all.
P: That’s about the size of it.
B: So what can we do that we haven’t already done?
Y: Unfortunately, not much–what we need is patience and an end to the war.
P: Patience is in short supply these days.
B: But surely we can do something–particularly on gas prices.
Y: You’ve jawboned the Saudis and released oil from the reserve. Public responses to high prices will take care of the rest. Prices are already coming down. Not that we’re getting much credit for it.
B: What about food?
Y: Rising prices are tied to the war, the weather, and oil prices. There is an issue with oligopolies in the food industry that could be addressed, but it would take years. The only possible way to deal with it now is by jawboning.
B: Rent?
Y: Supply problems were caused by high prices for materials, local government regulations, and a lack of construction workers after the Great Recession. You could deal with the last one by encouraging immigration. As an aside, you could also reduce prices in a variety of ways by getting rid of the Trump tariffs.
B: As you know, those are both politically sensitive areas, and I can’t do anything on immigration on my own. Nancy, do you have any ideas?
P: We need to do a better sales job with the economy we have. The important thing here is that the Republicans don’t have any idea of how to deal with inflation. All they want to do is cut taxes, which would make things worse. We also need to explain that inflation is a worldwide problem; it wasn’t caused by anything we did here.
B: Anything else?
P: You can blame big, greedy corporations for driving up prices. Go on TV every night, single out the worst offenders, and show the public you’re really on this issue. They need to see what looks like leadership, even if it doesn’t have any direct and immediate impact on inflation.
B: I’ll consider it. Thanks for coming. (They leave)