John Oliver explains inflation by listing the actual causes of it outside of election rants
John Oliver came back from the summer break to walk Americans through inflation and explain what the cause actually was while politicians on both sides are blaming each other.
The "Last Week Tonight" host began with the 2020 COVID-19 crisis, which drove up demand and killed the supply chain. He illustrated this by showing a large frog statue with its legs spread, and painted with "a hand-applied emerald Verde patina."
If there are only three "giant" frogs left and everyone wants one, then they can charge higher and higher prices.
So, during the 2020 COVID crisis, a number of Americans decided to buy bicycles to stay in shape. Since 90 percent of bicycles come from China, it meant the supply chain shortage drove up the cost of bicycles. So, when Democrats note that the pandemic is part of the inflation problem, Oliver noted they're not far off. His explanation, however, is that it's only a piece of the problem.
While the supply chain issues are taking much longer to resolve, another factor leading to inflation has nothing to do with President Joe Biden or the stimulus package that Democrats passed, despite what Sen. Ron Johnson (R-WI) says on Fox.
"Wow, that's some pretty heavy fire there," Oliver said, responding to Johnson. "Calling something a tax on the middle-class is one of the best ways to make it look bad just after calling it a close associate of Prince Andrew. Blaming Biden's stimulus package has become a common refrain on the right when discussing inflation. And the reality is, there is a kernel of truth to it."
He explained that because money was sent to Americans, Americans spent the money.
"But that is not the only reason. As strange as it sounds, many people saved money during the early days of the pandemic simply because we were all stuck at home. By one estimate, 'households accumulated $2.5 trillion in excess savings' during the pandemic," Oliver said, quoting The Hamilton Project. "To the extent that people were spending money, it mostly wasn't on services like flights or hotels or restaurants. Instead, it went to goods like furniture appliances or, I don't know, some steamy, watercolor, rat erotica. I'm just describing what most people did in 2020."
The idea that everything would be fine were it not for Biden's stimulus ignores what it would have looked like in America without it.
"It not only protected low-income workers who were in real trouble, it also helped us avoid a COVID-induced financial crisis," said Oliver. "While most economists say, in hindsight, we could have made it more targeted and precise. So, we didn't increase the money supply more than we absolutely had to, it is very important to note that according to one estimate, without the American Rescue Plan the economy would have come close to a double-digit recession in spring 2021" as Moody's said.
That means two things are true, the government stimulus did contribute to inflation, "but it was also a necessary intervention."
The biggest reason that there should be to dispute the GOP claims that Biden is the cause of inflation is that inflation is happening around the world right now. Britain and Germany have had four-decade highs in their inflation. In seven other European nations, it's expected to surge past double-digits, the New York Times reported. Biden had nothing to do with the laws or stimulus in those countries. So, by the GOP's logic, Joe Biden and the American Rescue Plan caused inflation all over the world.
When it comes to Biden blaming Russia's Vladimir Putin for inflation it isn't true either, because it was going on before Putin invaded Ukraine. As Oliver pointed out, however, it certainly exacerbated the problem, particularly when it comes to fuel. The U.S. is making fuel at the largest rate than it ever has, but when you have Europeans willing to pay more than the U.S. it means the demand goes to the highest bidder. In the U.S. Americans, aren't willing to pay $10 a gallon for gas, whereas in Norway they are.
When it comes to the allegations of corporate greed, it's the same story. They've always been greedy. So they didn't cause the inflation, but corporate greed is certainly making things worse.
"Companies will shamelessly profiteer the same way a dog will make a meal out of its own ball sack," said Oliver. "If left to its own devices that's just what it's going to do."
To recap, he explained, "rising prices are due to a ton of factors like a pandemic, a stimulus, changed spending patterns, supply chain issues, the war in Ukraine to just name a few. And anyone loudly saying 'the one thing is the cause of inflation' is either lying or has absolutely no idea what they're talking about."
See the video below at about the 15-minute mark:
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