These days, when President Joe Biden isn’t lying about being arrested during the Civil Rights struggles of the 1960s, he’s telling equally large fibs about “making progress” on inflation and the economy. Truth is, in the space of less than a year, he’s turned a recovering economy into dross.
Thursday brought yet more disastrous news about the “transitory” upsurge in inflation the media shills and Biden administration economic advisers talk about.
After Wednesday’s consumer price data showed a 7% rise in consumer prices for 2021, the highest since 1982, came worse news for producer prices: They rose a record 9.7% last year, as supply-chain issues and a massive burst of money printing by the Fed created a classic case of too much money chasing too few goods.
Yet, in a statement Wednesday, Biden claimed “we are making progress in slowing the rate of price increases.”
“Progress?” Really? As the New York Post helpfully points out: “Although Biden claimed food prices were falling, the new Consumer Price Index data indicate that food prices actually increased by 0.5% from November to December, up in total 6.3% over 12 months. The monthly rate of increase slowed from 0.7% in November.”
The supply-chain disruption and resulting shortages are also putting pressure on prices. Biden seems to want to simply declare victory and go home, saying just before Christmas: “The much-predicted crisis didn’t occur. Packages are moving. Gifts are being delivered. Shelves are not empty.”
White House Chief of Staff Ron Klain took it a step further, describing the supply-chain chaos as “an overhyped narrative.”
Recall, it was a mere six months ago that Biden poo-poohed the very idea of inflation, claiming that “no serious economist” believed there was a problem.
This is more than a game of “gotcha.” Those who didn’t live through the 1970s might not understand: inflation is one of the most pernicious, economically damaging, destabilizing and, yes, unfair results of the irresponsible, big-spending Keynesian economic policies pursued by Biden and his equally clueless Democratic allies in Congress in recent years.
Inflation is not an equal-opportunity destroyer. It is a disease that hurts the middle class and the working poor the most.
A perfect example: the surge in energy prices, following Biden’s imposition of draconian curbs on fossil fuel to reverse climate change.
Biden has been effective: His policies to destroy the fossil fuel industry have led to soaring energy prices, with the Goldman Sachs Commodity Index energy gauge shooting up 59% last year. Things aren’t getting better. Since just before Christmas, when crude oil prices stood at about $66 a barrel on the New York Mercantile exchange, they’ve spurted to about $81 a barrel, a 23% gain in just a month.
Because energy makes up a far larger share of the household income of the poor, it amounts to a massive green tax on those least able to pay it. Just wait until heating bills come due in February.
Worse still, Biden’s inflation erodes the very income that the poor and minorities rely on to survive. It’s a cruel double whammy, perpetrated entirely by the so-called Party of the Poor.
Part of the inflation data, but almost always underreported in the media, real average hourly wages fell by 2.7% from a year earlier. That’s the ninth straight monthly decline, a sign that all those who work for wages are less well off today than they were when Joe Biden and the Democrats reclaimed presidential and legislative power last year.
The middle class and the working poor have been targeted for the most severe economic punishment, all in the name of “equity” of course.
Understanding this, the Fed may soon start raising interest rates. It’s already signaled a likely rate hike in March and hints it could raise rates two or three times more by the end of the year.
Fed Chair Jerome Powell, recently renominated by Biden to serve as Fed chief, may be getting religion after seeing the latest disastrous inflation numbers.
“If we have to raise interest rates more over time, we will,” he said, distancing himself from Biden. “High inflation is a severe threat to the achievement of maximum employment.”
Unfortunately, Congress, which has already spent $6 trillion on post-COVID “stimulus,” wants to spend even more – doing further damage to our economy. Brian Riedl of the Manhattan Institute estimates that, based on Congress’ current wish list, U.S. federal debt could soar from “just” $17 trillion before the pandemic to $44 trillion.
Presidents matter when it comes to inflation. Just as Presidents Richard Nixon and Jimmy Carter received, and deserved, discredit for the inflation that caught fire and burned through the economy during the 1970s, Biden and the current crop of spendthrift far-left Democrats deserve equal opprobrium.
History tells us we will need a president as strong, decisive and clear-minded as Ronald Reagan to break the back of inflation this time. Clearly, Joe Biden isn’t the one.
— Written by the I&I Editorial Board