Inflation skyrockets and voters blame President BidenJoe BidenJudge Rejects Trump’s Request to Delay Release of Jan.6 Papers Amid Appeal On Money: Biden’s Battle with Inflation Night Defense and National Security: Russia Concerns Increase MORE.
TO Morning Consult Survey late October showed that 62 percent of registered voters believe Biden’s policies are to blame for spiking prices for everything from turkeys to gas to apartment rentals.
Guess what? They should.
Biden’s fingerprints are everywhere latest consumer price index report, which showed that prices in October rose 0.9 percent compared to a 0.2 percent increase in September. That was far worse than the consensus estimate of 0.6 percent.
If we annualize that October price increase, inflation is now at nearly 12 percent.
The Washington Post deliberately announced the sad news from the Bureau of Labor Statistics: “Inflation rises 6.2% in October, the biggest increase in 30 years, amid supply chain delays.”
Get it? These are problems in the supply chain. A complex accumulation of circumstances that Biden think most Americans are too weak to understand and over which the White House cannot exercise any control.
Liberals hope Americans buy into that narrative; after all, not even the Secretary of Transportation Pete buttigiegPete ButtigiegEquilibrium / Sustainability – Presented by Altria – SpaceX crew takes off, but the moon must wait it can be expected to scatter the stacked ships in Long Beach Harbor or to find scarce timber on its own when it is gone.
Those supply chain problems persist, sure. But when the main culprits for inflation are energy (up 30 percent from last year), accelerating rents and ongoing worker shortages, supply difficulties are not the whole story.
Political mistakes perpetrated by the Biden White House have made a serious problem worse.
For example, oil prices are higher for two reasons. First, US production has declined by roughly two million barrels per day since 2019, even as demand has recovered from the COVID-19-induced slowdown. Oil markets are global, so falling production would not necessarily raise prices, but our declining production must be offset by an increase elsewhere.
Join OPEC, which has not restored production to the level necessary to lower prices, despite repeated pleas from Biden.
Meanwhile, Biden has Did a lot to discourage a resurgence in drilling and production in the United States. It has canceled pipelines, threatened oil and gas producers with higher taxes, sidelined promising acreage such as the Arctic Wildlife Refuge, slow-paced leasing and new drilling permits, and, more recently, it imposed new rules for curbing methane that make drilling more expensive.
What sensible person would invest in the oil field in the face of such relentless hostility? Drilling activity has increased but is nowhere near where it should be at $ 82 a barrel of oil.
Another boost to inflation came from housing. Given that the “refuge” accounts for about 40 percent of the CPI, economists have warned that the rapid rise in house prices would eventually leak into higher inflation readings. In October, we saw this happen, with the increase in the cost of housing accelerating to 0.5 percent from September, an annualized increase of 6 percent.
One of the reasons why home prices have risen to almost 20 percent per year is that the Federal Reserve has continued to buy up to $ 15 billion in mortgage-backed bonds every month, keeping mortgage rates artificially low. The result has been a booming market, which has driven up home prices and now rents.
At last, the Federal Reserve has announced that it will begin slow down your bond buying program, including purchases of mortgage-backed bonds. Critics believe the Fed is behind the curve, having seriously underestimated the pressures on prices.
Biden doesn’t control the Fed, but he has made no secret of his preference for easy money policies that have helped prop up the economy and the stock market. Fed Chairman Jerome Powell’s term ends in February; Biden recently interviewed not only Powell, but also Fed Governor Lael Brainard, a well-known and Obama-appointed pigeon, for the position.
That these are the only two candidates he seems to be considering sends a clear signal. It will opt for growth over stability, even if that means inflation continues to accelerate. Sadly, Powell is listening.
Finally, Biden has not only encouraged monetary glut, he has also backed big spending packages that have put money in consumers’ pockets but also kept workers on the sidelines. The greatest shortage we have in this country today is labor. the labor participation The rate is stagnant at 61.6 percent, 1.7 percentage points below the February 2020 level.
Studies have shown that the large number of benefits contained in the Care law and subsequent relief bills, including incremental unemployment benefits, expanded child tax credits, and rent moratoriums, have offered Americans up to $ 100,000 per year while not working. These payments may have been necessary early in our recovery from the pandemic, but they are no longer needed.
TO recent analysis Biden’s proposed Build Back Better bill shows that the legislation could create even more disincentives to work, bypassing millions of Americans. This would further drive up the cost of everything.
Ultimately, inflation is the result of too much money looking for too little goods. That is what is happening now. Joe Biden is to blame for much of the problem; the voters know it.
Liz Peek is a former partner at the major Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.