Joe Biden got his start in politics in the 1970s and appears determined to recreate the world as it existed back then.
Misguided federal policies have pushed energy prices to punishingly high levels. Americans are struggling with inflation. Radical Muslims are holding American citizens hostage in the Middle East. Our adversaries, including Russia, are on the march. Even bell bottoms are making a comeback.
And, now, the pièce de résistance of the 1970s is also making a comeback: stagflation.
Stagflation. It’s a term that most young people and plenty of not-so-young people have probably never heard before because it’s been nearly 50 years since the U.S. suffered this leftist policy-induced madness. A combination of stagnant economic growth and high inflation.
It’s something that liberal Keynesian economists say can’t happen. Inflation, they say, is caused by a too-hot economy and a tight labor market. A sluggish economy should push prices down.
And yet stagflation did happen then, and appears to happening again, thanks to massive spending and growth-choking taxes and regulations imposed by the Biden administration.
Last Thursday, the Bureau of Economic Analysis reported that GDP growth in the first three months of the year was an anemic 1.6%, well below the consensus forecast. The next day, the “personal consumption expenditures” price index, a key policy barometer for the Federal Reserve Board, climbed 2.8%, higher than anticipated, marking the third-straight month in which prices went up faster than expected. In other words, inflation was accelerating during the same months the economy was flatlining.
Other signs of an economy in trouble: More than 5,400 companies have announced mass layoffs since the start of the year. The list includes Tesla, Ford, Nike, Cisco, Sony, Northrop Grumman, Apple, UPS, American Airlines, Microsoft, Macy’s, Google.
And while President Biden keeps patting himself on the back for “historic” job growth, the latest Bureau of Labor Statistics report shows that all the gains last month were part-time jobs.
“In the past three months, the economy has hemorrhaged 1.9 million full-time jobs,” notes economist EJ Antoni. The “growth” is largely from people taking second or third jobs, which get counted by the BLS as a “new” job. “Double-counting is a massive hole in the supposedly solid labor market,” he points out.
Now, suddenly, all those reassurances from the press that the economy is doing fabulously well – Paul Krugman on April 9 wrote that “The truth is that the U.S. economy is a remarkable success story. Don’t let anyone tell you that it isn’t.” – have turned into . . .
- “Fears of stagflation are mounting in the U.S.,” says CNN.
- “U.S. growth slowdown, with inflation spike, raises early stagflation risks,” says TheStreet.
- “With inflation still high and economic growth slowing sharply, we could be heading toward stagflation,” says Fortune.
- “GDP report spurs stagflation fears, with growing risk of Fed rate hike seen,” says MarketWatch.
JPMorgan Chase CEO Jamie Dimon told the Economic Club of New York last week that “I worry it looks more like the ’70s than we’ve seen before.”
As we’ve pointed out in this space repeatedly, the Biden economy is far worse than the Biden administration and the corrupt media have been claiming. There’s a reason why the nation is so despondent and why consumer confidence is in the toilet.
It’s time to cancel “Joe’s ‘70s Show” and reboot “Morning in America.”
— Written by the I&I Editorial Board
Once Paul Krugman writes a story, it’s time to believe the opposite, which is more likely the truth.
It is somewhat acceptable to be a cheerleader for what you want, but when your record is so historically wrong, it’s time to abandon what you are being told. Krugman has a history of being wrong more often than right. At this point in his career, he seems to be more of a cheerleader than an honest analyst of the facts.
I do respect an analyst that will go out on the limb as often as Krugman has throughout his career. But when his opinion starts to interfere with the facts, and he turns toward his expectations of what will happen, he has often missed the boat.