Let’s review the inflation facts. Using the Consumer Price Index (CPI), year-over-year inflation was 1.4 percent in January (see below). By the time of the October report, for the year-to-date it was running at a 7.5 percent annual rate. This is not just attributable to the rise in food prices (from 3.8 to 6.3 percent) or energy costs (from a negative 3.6 percent to 35.6 percent). Core (non-food, non-energy) inflation is also up from 1.4 percent to 5.5 percent.

Shelter, food, and energy are over one-half of the average household’s spending. Inflation on this bundle is up from 1.5 percent to 7.6 percent so far this year. Of these, however, energy (7 percent of the average budget) is the least important. Shelter (33 percent) and food (14 percent) are far more important.

So, where are the administration’s efforts focused? You guessed it, energy – especially gasoline. It is an even odder focus because oil-based products are the most likely to fit the administration’s “it’s the pandemic and will quickly fade” mantra about inflation. After all, the price of West Texas Intermediate oil futures briefly went into negative territory last year (-$36.98 on April 20, 2020) and a year ago had only recovered to the mid $40s, about one-half of the current price.

Nevertheless, the president has pulled out all the stops on the oil and gas front. A while back he penned a letter to the Federal Trade Commission (FTC) asking it to look into “mounting evidence of anti-consumer behavior by oil and gas companies.” Does anyone really believe that there has been a sea change of behavior since January that explains the double-digit shift in price inflation? More generally, does the White House think it is convincing to go “on an offensive in which the administration would amplify criticisms of large firms in heavily concentrated industries for passing higher prices on to consumers”? My guess is that by and large people have the same (low or high) opinion of those firms now that they had in January; it’s just not convincing that in the past 10 months there has been a dramatic change in the ability to charge high prices across the entire economy.

The absence of any compelling economic logic has not stopped the president from doubling down on the oil focus and announcing that the administration would release 50 million barrels of oil from the Strategic Petroleum Reserve (SPR). The SPR is the last refuge of every desperate administration. Fifty million barrels is a bit more than 4 days of current domestic production. Even when combined with other countries’ releases of reserves, this will be easily offset by the Organization of Petroleum Exporting Countries (OPEC). It will accomplish little.

The reality is that inflation can be controlled quickly, but only by raising taxes on the broad middle class, shutting off the monetary spigot, and otherwise knocking down demand – but at the risk of recession. That’s not politically palatable, so expect a continued focus on policies that are small and substantively pointless.