Inflation climbed at the fastest pace in 40 years across the economy, driven in large part by higher energy prices themselves driven in large part by Joe Biden’s energy policy toward Russia and inability to use obsequiousness get OPEC to pump more oil (while leasing less federal land for oil and gas drilling than any president since the end of World War II.) The last time inflation reached over nine percent was 1981 when Ronald Reagan took over from Jimmy Carter. Fueling the inflationary jump was the energy index, which rose 7.5 percent compared to a year ago and contributed nearly half of the overall increase in inflation. That index includes prices for fuel, oil, gasoline and electricity, and it’s up 41.6 percent for the year, the largest 12-month increase since April 1980 under President Jimmy Carter. The consumer price index was 9.1 percent higher earlier this summer than last. There are fears sources of strength in the economy — like the labor market and consumer spending — won’t be enough to fend off another recession. Yet the Fed may need to work more forcefully to slow the economy by raising interest rates, which the central bank has done multiple times this year already. Biden called on Americans to sacrifice, especially at the gas pump, to help win the war against Putin in Ukraine.
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It’s the Economy Again, Stupid
One of the most succinct campaign slogans of the modern era came out of the 1992 Clinton campaign: “It’s the Economy, Stupid” picking up on feeling Americans were less concerned with the incumbent’s apparent foreign policy success (remember Desert Storm?) than the nation’s changing economy. Clinton spun his personal concern for voters’ well-being off this, with the catchphrase “I feel your pain.”
Things seem headed for some sort of through-the-looking glass style repeat in 2024, as the incumbent is hoping to sell voters on the strength of the economy when they are more than skeptical. Bidenomics’ thrust seems to be “The Economy is OK Unless You’re Too Stupid to Notice.”
Bidenomics, the word itself the meddling of two of the incumbent’s vulnerabilities: he is Joe Biden, age “the crypt keeper” and the economy is just fine if you don’t look at it. Not much can be done with the first liability, but the second opens the door for Donald Trump to run on a populist version of the economy that could leave Biden looking uninformed and out of touch.
The economic world of Joe Biden is best characterized by the New York Times, acting nearly as his spokesperson that things are bright if only you were not so stupid as to be looking at the wrong numbers. So Bidenomics calls out how in 2020 the average wage of workers who still had a job shot up, without talking about how those who laid off, disproportionately service workers. Growth in wages for everyone was then held down because those low-wage workers were being rehired. Biden fanboy Paul Krugman actually went as far as writing in the Times “Until recently I thought everyone — well, everyone following economic issues — knew this.” Stupid voters, not keeping up with the Times. “There are two big questions right now about the U.S. economy,” says Krugman. “One is why it’s doing so well. The other is why so many Americans insist that it’s terrible.”
A dumb line of reasoning seems to attract progressives. One coined the term “vibe-cession” last year to describe the gap between the common perception and cherry-picked economic indicators. Others insist it’s poor perception and political polarization that are mostly to blame. Then there is good old social media and its whack misinformation, reinforcing the “bad economy belief.” A former Federal Reserve economist quoted by, of course, the Times, wrote that a “toxic brew” of human bias for negative information and the attention economy lead to consumer pessimism. If only those rednecks who don’t subscribe to the New York Times could see the view from up there.
The problem down here is economic reality, off limits in Bidenomics. Start with inflation. Things cost more, with some of the highest jumps in inflation-driven prices in decades (excepting the pandemic, there hasn’t been a year with average annual inflation above four percent since 1991.) But even after years of the Fed raising interest rates (see mortgages, below) inflation coming down does not fix the everyday problems of Americans. “Inflation” as economists define the term is nearly meaningless to most voters, because it excludes food and energy prices, two significant parts of any household budget. To include those parts of most voters’ lives, you’re looking for the Consumer Price Index, which includes everything but which rarely appears in feel-good tales of the Biden economy. Even then watch the magician’s hands closely; prices at the pump are down more than 30 percent since their peak last year but still up considerably since Biden took office. Some 74 percent today say they’re at least somewhat worried that the cost of living will climb so high that they will be unable to remain in their community.
Now about those mortgages. As the Fed raised interest rates to buffet inflation, loan costs rose in kind. Average monthly payments on a new home jumped to $3,322 in the third quarter of the year, data from real estate investment firm CBRE shows. It means it has risen 90 percent since the final quarter of 2020 — just before Biden took office in January 2021 — when it was $1,746. Home ownership is becoming a unattainable dream to many Americans as average monthly mortgage payments are now nearly double what they were when Biden took office. Interest rates above seven percent and soaring house prices mean buyers are facing one of the least affordable markets in recent memory.
The low unemployment Biden touts does mean more Americans are working but says nothing about mediocre wages, underemployment, and those forced into two or more jobs to make ends meet. A Blueprint/YouGov poll on the economy found just seven percent of respondents were principally concerned about the availability of jobs, while 64 percent were most worried about prices. Bidenomics, of course, famously focuses on jobs created. Even then the numbers are slippery; the vast majority of this touted job growth comes from restoring job losses from the pandemic. Check instead the broader unemployment rate that includes underemployed and discouraged workers, nearly twice as high at seven percent as Bidenomics claims. And watch claims of rising wages — most rises have been negated by inflation growing at an even faster pace.
Perhaps most significantly among economic perceptions is voters’ view of the future. A poll from March found that just 21 percent of respondents felt confident life for their children’s generation will be better, matching the record low since this question was first asked. In 1990, 50 percent of those asked felt life would be better for their kids. The national debt, which was $5.7 trillion when Bill Clinton was in office, has reached $33 trillion. This constitutes a form of intergenerational theft; rising interest costs will eventually require higher taxes or cuts in federal programs or both.
Food prices are up almost six percent under Bidenomics. Some 59 percent of parents will spend more than $18,000 per child on child care in 2023. The overall average manufacturer’s suggested retail price of new vehicles in the 2023 is $34,876, 4.7 percent higher than last year. Average annual health insurance premiums increased seven percent in 2023. The average family premium has increased 22 percent since 2018.
The Biden people have it just 180 degrees wrong; perception does matter and is not “wrong.” And it does not matter that some of the economic effects listed here are not Joe’s “fault.” Past experience shows the guy in the Oval Office takes credit or accepts fault for what happened on his watch, at least in most voters’ minds. This is because while a few economists are voters, very few voters are economists. What the economy feels like at the checkout, at the end of the month, at the pump, matters most and will drive voting choices. So a recent poll found just two percent of registered voters said economic conditions are “excellent,” with only 16 percent saying they were “good.” A majority of voters already trust Trump more than Biden on the economy. You just can’t tell the voters they are wrong, all is actually well, when it is not. Bill Clinton called it in 1992, Donald Trump will surely emphasize it this year but Joe Biden hasn’t heard it yet in 2024 with the election only about ten months away: it’s the economy stupid.
Copyright © 2024. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
A 2022 to Remember, Ukraine Edition
Looking back at 2022, at what did and did not happen, really tells us what was important, hindsight and all that.
Things that Did Not Happen in 2022
Joe Biden did not explain why the U.S. is at war in Ukraine.
Any nuclear war.
Regime change in Russia.
Ukraine winning the war.
The Russians running out of missiles, men and tires.
No American diplomacy has been tried to conclude the war in Ukraine.
Things That Did Happen in 2022
Among the things causing the greatest pain are the highest gas prices ever recorded in the United States, topping $5 a gallon across the country at one point. Gas purchases on their own may make up only a relatively small portion of most families’ budgets, but the spike in gas, oil and diesel prices has left businesses with higher costs that will force them to raise prices on their customers and pull back on new investments. It risks a slowdown in consumer spending, as households cut back on other expenditures. Energy is so crucial to the functioning of the economy broadly that the price increases bring along higher prices in many other sectors, only adding to inflation. Meanwhile, U.S.-imposed energy sanctions have played to Russia’s favor economically as oil prices rose. Things may come to a head as winter sets in in Germany and that natural gas from Russia is missed. But that is a domestic German problem the U.S. is likely to simply poo-poo away (once economic powerhouse and U.S. competitor Germany showed its first negative foreign trade imbalance since 1991, a nice bonus for America.) Things got so loose that “someone” needed to blow up the Nordstrom 2 pipeline to make the point with Germany that it may have to do without Russian energy to maintain the fiction sanctions will bring an end to war.
There can be no denying the greatest rise in food prices since May 1979, during the Carter administration. The biggest price rises were in the most basic of goods: egg prices soared 39.8 percent, flour 23.3 percent, milk rose 17 percent and the price of bread jumped 16.2 percent. Chicken prices jumped 16.6 percent, while meat rose over six percent. Fruits and vegetables together are up 9.4 percent. Overall, grocery prices jumped 13.5 percent. And don’t look for relief eating out; restaurant menu prices increased 7.7 percent. Eating at home is the answer, even though rent is up over seven percent. Why is everything so expensive? Food prices are affected by global events, such as the war in Ukraine, which affects the costs of wheat and other core commodities. Prices are biting above their weight because of the largest decline in real wages in four decades, since, you guessed it, the Carter days.
Declines across the stock market have affected not only those who invest or passively hold stock in 401(k)s but the parent companies they work for and shop with. This time last year, January 3, the first day of market trading in 2022, looked like just another day in a stock rally that began when Barack Obama was still president. The S&P 500 hit a record high. Tesla rose 13.5 percent and came close to its own all-time peak. That day turned out to be the end of a market that for over a decade had gone mostly in one direction, the S&P 500 rising more than 600 percent since March 2009. The S&P 500 began the year’s final trading session of the year almost 20 percent below where it was at peak. The year overall was the worst annual performance since when the housing crisis in 2008 took down the market. Central banks drove markets this year because of inflation, which was also pushed by energy prices and massive spending in Ukraine.
There’s some good news to add to the economic dullness and dismalness. NPR reports 70 percent of Americans polled support continuing a range of economic and military assistance to Ukraine. Those polled also supported the statement “that they might have to pay higher gas and food prices if we continue to assist Ukraine,” and said “we should stick with Ukraine for as long as it takes rather than urge them to cede some territory to create a cease-fire.” And the Blackrock investment firm has agreed to help rebuild Ukraine after peace breaks out. Blackrock already coordinates Ukrainian investment in the U.S.
Oh, and there’s more that happened in 2022 to remember. Many large cities experienced their worst crime waves since the 1990s. Covid remains a part of life. The southern border is a mess. Diseases of despair, suicide, alcohol, and drug overdoses have driven a drop in our life expectancy. But we’re not gonna blame all that on Biden, too?
Copyright © 2024. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
Biden at 500 Days
The Joe Biden administration at about 500 days in office tests the limits of those who claimed 501 days ago “anybody” would be better than Trump. With the threat of nuclear war now well alive, Biden presides over the highest gas prices, the worst inflation, and the saddest stock market in lifetimes. It is not morning in American as much as late Sunday afternoon and raining.
Start with the record breaking vacation time. It became a meme during the Trump years to criticize him for weekends at Mar-a-Lago, and to point out how much the Secret Service paid him for their accommodations. Yet as he marks Day 500, Biden is preparing for another weekend scram, on track to take more vacation than any other of his predecessors. So far since taking office Biden spent 191 days away from the White House vacationing in either of his two Delaware properties, at Camp David or on Nantucket. Trump spent 381 days on vacay but over four years. Go Joe!
And as for those Secret Service room bills, they pay them for every president, as the Service is prohibited from accepting “gifts,” even the free accommodations necessary to protect the president. At Biden’s home in Delaware he charges the Secret Service $2,200 a month rent for a cottage on his property. He made $66,000 in total off the Service in 2013; contemporary figures are not available but they tally up, just like Trump and the others. Hillary bought a second house in upstate New York just for the Secret Service anticipating her victory in 2016.
But what of the time Joe Biden has spent in the office, how have the 500 days gone so far? Biden succeeded primarily in engineering a new form of war in Ukraine, not quite Cold and not quite Hot. Not Cold as in 1945-1989, because American Special Forces may soon be on the ground in Kiev and American ships in the Black Sea, and Ukrainians have boasted how American intelligence and targeting information have killed Russian ships, tanks, and generals. With no regard to what leakage into the global black arms market might mean, Biden is sending billions of top-notch weapons into the nation with the avowed aim of bleeding out Russia. When something like this was tried in Afghanistan in the 1980s, the U.S. had the common courtesy to do it through the CIA and keep at least some of it secret. No more. Vladimir Putin, in return, has reminded the world several times he has nuclear weapons he is not all that opposed to using. Joe Biden has succeeded where presidents since 1989 have failed — he sends Americans to bed at night worrying about nuclear holocaust. And that is his greatest foreign policy accomplishment absent the clusterfutz evacuation from Afghanistan and a soon-to-really-happen trip to forgive the Saudis for their sins and become the first president since the 1970s to overtly beg for more oil.
(For the record Trump was the only president in some 20 years who did not start a new war during his term, and the only one in that same rough time period who made an effort to seek peace with North Korea, a country Joe Biden continues to ignore as official policy. When asked in Seoul if he had a message for Kim Jong Un, Diplomat-in-Chief Biden said “Hello. Period.”)
In other Leader of the Free World accomplishments, Biden’s actual leadership was shown when Mexico snubbed him, refusing to attend the Summit of the Americas because Biden would not also invite Cuba, Nicaragua, and Venezuela, all Cold War hissy fits Joe is keeping alive for a new millennium. “There cannot be a summit if all countries are not invited,” Mexico’s president said at a press conference. “Or there can be one but that is to continue with all politics of interventionism.” It really is 1980 again! Additional leadership has been shown in Europe, where Germany and France agreed to U.S. demands to stop buying Russian energy but just not for a couple more months, okay? To make it look like something is being leadered around they have stopped buying energy delivered by ship as a face saving gesture, just as they keep lapping up the massive pipeline delivered materials. But Biden did travel twice to Europe and declared “America is back,” so there’s that.
As for domestic achievements, everyone in America knows about Joe’s gas pains, which he disingenuously claims like a hubby caught with lipstick on his collar are not his fault. Biden apparently sees no connection between his sanctions against Russian energy (which seek to remove significant amounts of oil from the world markets) cutting supply at a time when demand is rising, and inflationary prices. The good news is the sanctions on Russia, well, no, it is not good news, Russia is still fighting away in the Ukraine which means the sanctions have so far failed in their primary function. Biden will give them more time apparently, as the U.S. is not seeking negotiations to otherwise curtail or end the fight.
Biden further sees no connection between his failure to anticipate a baby formula crisis and hungry children. A smarter Biden would have one of his interns sit down with The Google today and make a list of everything that is affected by supply and demand, and of those things, jot down which are only made in a single factory. That accomplishment alone would eclipse the rest of Biden’s domestic agenda, which consists today entirely of pretending historic inflation is Putin’s fault.
Of course that last line is not fair, as Joe did finally pass a $1.2 trillion infrastructure spending bill which in no way could have helped contribute to inflation by dumping all that money into an economy still chasing goods scarce from those naughty supply chain issues. Then there was that $1.9 trillion Covid relief bill (less than half of American approve of Biden’s Covid handling) now that everyone feels better which in no way could have helped contribute to inflation by dumping all that money into an economy still chasing goods scarce from those naughty supply chain issues. Plus wages are up, pouring more money into an already inflationary economy.
The media actually listed Joe’s Biggest Achievements for us in case they were hard to pick out, to include appointing a boatload of judges, 80 percent of whom are women and 53 percent are people of color (“judges that reflect our nation”) which in no way reflect our nation and in no way is racist because you obviously fight back against racism and gender inequality by promoting people based on race and gender. Biden also strategically secured America by overturning the Trump ban on transgender people in the military. In fact, the White House brags it has the first majority non-white Cabinet in history, with most women in the Cabinet, including first woman Treasury Secretary, first LGBTQ and Native American Cabinet officials, and first woman Director of National Intelligence as if someone was giving out prizes for those things.
But it is always best to go to the source, the White House itself with its own list of “record firsts” in Joe’s presidency. You can read them yourself, but you’ll run into the same problem everyone else does — it is all boasting with no links, sources or details attached. So we hear Joe was “most significant by economic impact of any first-year president” but with nothing more. Um, okay. A lot of the rest of the stuff, unemployment and child poverty, got better by the numbers but there is not a word about how anything Joe did caused those things. It is kinda like taking credit for a comet on your watch, especially given how much “not our fault” garbage is being tossed around when someone brings up inflation or fuel prices.
As for Democratic issues of importance like gun control, abortion rights, and climate change, the home town stuff, Biden rates a zero. The EPA continues to recommend Flint, Michigan residents use filters in their homes to remove lead. Joe has driven home the idea that unless a president has a super majority in both houses and now, the Supreme Court, you better not expect much from him. Indeed in Biden’s case he can’t even wrangle his own party, with two key Democratic senators, Joe Manchin and Kyrsten Sinema, stymieing Joe. Biden for his part predicted Republicans would have an “epiphany” after Trump left office, but that has not yet materialized. The expected Democratic midterm loss currently scheduled for November 2022 will not help. And we haven’t even talked about Biden’s Dead Man Walking lifestyle and walk-it-back gaffes.
So it has only been 500 days, plenty of time left. But to date the Biden administration has strained those statements about how anyone but Trump would be a better president.
Copyright © 2024. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
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