Issues & Insights

Bidenomics’ Build Back Better Blunder

Air Force Historical Support Division

Swedish socialist economist Assar Lindbeck is semi-famous for saying that “in many cases rent control appears to be the most efficient technique presently known to destroy a city – except for bombing.” It’s becoming clearer that one of the most efficient ways to destroy the U.S. economy, outside of bombing the country, is to put Joe Biden in the White House.

Economic growth in the third quarter was a meager 2%, the Commerce Department reported Thursday, the most feeble increase of the pandemic recovery. Some economists had forecast a gain closer to 3%, leaving many disappointed. As the Asia Times accurately summed it up, the U.S. “economy ground to a halt.”

The economy grew 33.8% in the third quarter last year, after two straight quarters of GDP losses due to ill-advised lockdown policies. It grew 4.5% in the fourth quarter, and 6.3% in the first quarter of 2021, when Trump economic policies were still in effect. A healthy 6.7% increase followed in the second quarter, but now that Biden’s economic policies have had a few months to stew, the economy looks to have a case of sclerosis.

Blame Biden’s inflation and the supply-chain crisis that has exploded on his sleepy watch. But don’t discount how much the White House and congressional Democrats’ tax-and-spending plans have negatively impacted growth.

One of the more common beliefs among Americans is that a stock market crash caused by greedy investors brought on the Great Depression. But a close look at the history shows that the markets watched, and reacted to, Washington’s actions in the months leading up to Black Tuesday – Oct. 29, 1929.

Washington’s discussions over the spring and summer of that year were focused on trade policy, which eventually produced 1930’s Smoot-Hawley Tariff. The market rallied and fell, as did industrial production, depending on how events were perceived.

“We know that market participants do not wait for a major law to pass, but instead try to anticipate whether or not it will pass and what its effects will be,” economist Alan Reynolds wrote four decades ago in an essay that documented Washington’s missteps on the way to the Depression.

In his book “The Way the World Works,” the late Jude Wanniski tied “the successes of the tariff, and its setbacks, to drops and surges in the stock market,” says historian Larry Schweikart, and argued “that the crucial vote occurred on Oct. 28, 1929, when the tariff bill cleared its final committee hurdle.”  

The predictable defensive responses from businesses to the law’s “inescapable tax,” according to Wanniski, were layoffs, raised prices, and cuts in production. 

It’s not unreasonable to conclude that current economic players are reacting to the Democrats’ plans to spend more of other peoples’ money than has ever been spent before, as well as the tax hikes that will be needed to fund their job-destroying wealth redistribution schemes. They know the damage that five new entitlement programs, inflated debt, and punitive taxation, will do, and are taking evasive measures.

Thursday’s GDP number needs to be a part, and no small one, either, of the back-and-forth over the Biden-Democrat plans. A stiff slap of reality might even wake up more Democrats than Sens. Joe Manchin and Kyrsten Sinema.

— Written by the I&I Editorial Board

Will You Help Us In The Fight For Free Speech?

Issues & Insights was founded by seasoned journalists of the IBD Editorials page. Our mission is to provide timely, fact-based reporting and deeply informed analysis on the news of the day -- without fear or favor.

We’re doing this on a voluntary basis because we believe in a free press, and because we aren't afraid to tell the truth, even if it means being targeted by the left. Revenue from ads on the site help, but your support will truly make a difference in keeping our mission going. If you like what you see, feel free to visit our Donations Page by clicking here. And be sure to tell your friends!

You can also subscribe to I&I: It's free!

Just enter your email address below to get started.

Share

I & I Editorial Board

The Issues and Insights Editorial Board has decades of experience in journalism, commentary and public policy.

5 comments

  • From the strongest economy in a century to stagflation ala the 70’s. Quite an accomplishment for the DiMarxoKKKrazis!

  • Biden is in a race to quickly execute Democrat wishes of a Cloward-Piven demise of the American economy while he is still coherent enough in his steep mental decline to relish the glory of what he has done.

    Passage of the two gigantic “transformative” inflation bills will be the “go big” capstones of the plan. Sen. Chris Murphy (D-Utopia) says that President Biden, “will be the ‘most consequential president in history.’” If he and they have their way, he will be consequential in the same way two airplanes were to the twin towers and for the same purpose.

  • You should examine that 2% GDP number.

    “Business investment picked up in Q3, reversing two quarters of decline, but even that’s a false glimmer of hope. Both fixed investments and structures declined, and equipment investment dropped by 3.2%. The entirety of the jump in this category came from a 12.2% increase in intellectual property investment. That doesn’t portend any significant expansion in business operations in the near term.”

    Those first two items are real dollar investments, and they dropped by 3.2%. IP investment is non-monetary, and is just an evaluation of the values of things like trademarks, patents, etc – very non-rigorous. We think our patent value has grown xx this month.

  • Summer 2020’s burning of urban business districts is emblematic of how the Democrats regard the economy. Marxist ideology is their mantra and mother’s milk, to the exclusion of all else. Their model government is Bolshevik Russia under Lenin and Stalin, where diktats and brute force replaced market forces. They close energy pipelines and squelch production, and are too mathematically ignorant to make the connection to higher prices.

Subscribe to Issues & Insights via Email

Enter your email address to subscribe to I&I and you can receive notifications of new articles in your email. It’s simple, and free.

Join 5,534 other subscribers

We Could Use Your Help

Will you help us fight for honesty in journalism and against the tyranny of the left? Issues & Insights is published by a team of volunteers who believe in free speech and in quality journalism. If you like what you see, leave a donation by clicking on the Tip Jar above. You can also set up regular donations if you like. Ad revenue helps, but your support will truly make a difference. (Please note that we are not set up as a charitable organization, so donations aren't tax deductible.) Thank you!

About Issues & Insights

Issues & Insights is run by the seasoned journalists behind the legendary IBD Editorials page. Our goal is to bring our decades of combined journalism experience to help readers understand the top issues of the day. We’re doing this on a voluntary basis, because we believe the nation needs the kind of cogent, rational, data-driven, fact-based commentary that we can provide. 

%d bloggers like this: