Over the last two years, Americans have grown more accustomed to bare shelves at grocery stores, higher prices at the pump, and delayed deliveries as a result of the COVID-19 pandemic and its disruption of virtually every facet of American life. While a novel virus and repeated quarantine added roadblocks to securing the everyday necessities, these disruptions are now compounded by a new challenge: Inflation.
At a 40-year high, inflation is causing increased prices across all sectors of the economy, leaving America’s families with less money in their pockets. It is rightly front-and-center in today’s policy conversation. But as our nation struggles, policymakers must ground the debate in economic realities and avoid oversimplifying the issue. Our best shot at combating these inflationary challenges and delivering relief to millions of Americans hinges on this.
There’s no doubt inflation is complicated. Labor shortages and costs, demand increase, and supply-chain issues all contribute to inflationary pressure in our economy. There is no single driver nor is one industry to blame.
Unfortunately, the White House has pointed the finger at big agriculture, alleging that a handful of companies have used their market power to push up prices, resulting in increased costs for Americans not only at the grocery store, but across the economy.
But this line of attack misses the mark. While examining the effects of industry concentration is always laudable and warranted, we cannot assume it tells the full story. No singular industry can cause economy-wide inflationary pressures. A number of factors are to blame for the rising costs of food, and blaming one industry that happens to be an easy target will only compound the challenge before us.
President Biden won the election on an inspiring message of bridging divides and forging a path of national unity. He has already shown his commitment to putting politics aside with the historic passage of the bipartisan infrastructure law. Now, he should do the same when it comes to addressing our economic headwinds. Democrat or Republican, we all have a lot to lose by ignoring the true causes of inflation.
As former Secretary of Agriculture, I understand the importance of taking decisive and thoughtful action on policies affecting our country’s food sources because Americans quite literally rely on them to survive. During my time at the Department of Agriculture, I became known as the ‘food safety Secretary’ because I made safe access to nutrition a priority. After an E.coli outbreak at Jack-in-the-Box restaurant locations, we quickly implemented inspection reforms and worked to craft consumer-friendly protein processing practices—inspection reforms that remain in place today. During my tenure at USDA, we also invested half of the agency’s budget on food security programs like school lunches and what is now known as the Supplemental Nutrition Assistance Program (SNAP). And we ensured every town in America with less than 50,000 residents had access to water. I have seen firsthand how rural communities in particular are hit hard when food prices and safe supply are affected.
That is why it’s imperative that policymakers take an honest look at the root causes of inflation.
Many respected economists point to supply-chain issues as a major contributor to inflationary pressures. For instance, Itay Goldstein, a corporate economist and Economics Professor at the Wharton School of the University of Pennsylvania, argues that supply-chain blockages and delays drive prices up, especially when consumers want the same item. Other economists blame labor shortages, and in turn, labor costs, for inflation. Larry Summers, who served as Secretary of the Treasury for President Clinton and the Director of the National Economic Council for President Obama, sees job vacancies as a worrying accelerant of inflation. Jason Furman, another prominent Obama administration official who served as Chairman of the Council of Economic Advisers, finds higher prices unsurprising, given the drastic increase in demand.
Without a doubt, inflation is affecting all Americans, and the most vulnerable among us are bearing the brunt of it — as will always be the case when economic pressures abound. But blaming a handful of companies for a broad and complex challenge will neither solve the problem in the near term nor unite the country in the long term. Now is the time to bring Democrats and Republicans together, and there is no one more equipped to do so than President Biden. I am confident in his ability to get this right.
Mike Espy is the former Secretary of the United States Department of Agriculture, and a former U.S. Representative from the 2nd District of Mississippi. He currently serves on the board of the One Country Project and works as a private sector attorney, counselor, and agricultural advisor at Mike Espy, PLLC and AE Agritrade, Inc.
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