In the past few days, we have received convergent and conflicting news regarding the American economy.
We all understand that Presidents spin economic news in their favor. “Spin,” that is. Biden, on the other hand, creates totally false narratives. He redefines terms. He tells wholesale lies.
Although it was inadvertent, Biden revealed his messaging problem. JPMorgan Chase Chairman Jamie Dimon, the Federal Reserve, the International Monetary Fund, and prominent economists flew warning flags of continued high inflation and the likelihood of a significant recession.
So, what was Biden’s response? He assured the nation that there will be no recession — but if there is, it will be a short one.
It reminded me of an example of bad parenting – telling the child to NOT take any cookies out of the cookie jar but if they do, to clean up any mess.
The first problem with Biden’s assurance is that according to traditional economic standards, the economy has already dipped into a recession – meaning negative growth in two quarters. The Biden administration discarded that factual report by simply saying the traditional standard does not apply.
In one recent month, Biden declared that there was “zero inflation” because it did not increase that particular month.
Inflation was raging at 8 percent as he said that. But goods and services were still going up … and up … and up.
Weeell … that is one way to get rid of inflation and a recession. Just close your eyes and say it does not exist. Biden is doing that again. It is also the same denial strategy that he has applied to the inflation that would not arrive – and then would be mild and short lived.
And when the inflation was severe and prolonged, he claimed that it had nothing to do with his government spending policies — too much money chasing too few goods. Plus his actions drastically cut American oil production sending pump prices through the roof and causing supply chain problems.
Then there was his claim that 70 percent of Americans would have Covid shots by June of 2021 – not even close today. But I digress.
Biden has taken full credit for the recent reduction in gas prices by flooding the market with America’s Strategic Oil Reserves. He does not mention that for the sake of national security, he is going to have to purchase a lot of higher priced oil and gas to restore the Reserves (more inflation).
The fed has been raising interest rates at a record pace to tame inflation.
Based on the lack of success, they are going for another round or two of interest rate hikes. That means the people will pay more for the goods they buy– and more in interest on the credit cards they use. It will also create unemployment and a drop in the stock market. (Think of all those retirement accounts losing money).
Now we have the latest inflation report – and it has increased. The overall inflation rate increased to 8.4 percent. BUT … the inflation rate for the essentials – the Consumer Price Index — is at 13 percent. If you purchased a $400,000 home s year go, your monthly payment was approximately $1600. Today it would be $2600.
While Biden continues to paint a rosy picture of the American economy, the future is not looking good for the average consumer. Most experts say that inflation will continue well into 2023. Even worse, they see a nasty recession next year.
Most of Biden’s good news about the economy is designed to limit any backlash against Democrats in the upcoming midterms elections. A lot of folks are already casting ballots – and the latest inflation report is a disaster for Biden and Democrats. Even worse, it is the last report before the November election — less than four weeks away.
The current economy – and the prospect for the future – is not looking good for the American consumer. Biden’s only political option at this point is to paint a pretty picture and hope that American voters will believe what he tells them rather than what they see with their very own eyes in the real world.
I have always had trust in the collective wisdom and good judgment of the American people. That is why I am sticking to my predictions of a very good day for Republicans on November 8th.
So, there ‘tis.