President Biden yesterday gave a speech talking about his success in providing “economic security” for Americans. Let’s have a look at this statement. For one, Mr. Biden’s bragging about job creation. Including today’s 263,000 increase in non-farm payrolls.
Trouble is, these are not new jobs. They are people returning to work after the pandemic. If the pre-pandemic Trump trend had been in place, we’d be up 6 million or more newly created jobs. Not just breaking even post-Covid.
For another, the jobs aren’t paying. Today, for example, production worker wages increased 5.8 percent over the past year, which is normally a strong gain. Problem is, the inflation rate is more than 8 percent. So real wages fell for the 18th straight month.
That’s the soft underbelly of the Biden economy. That’s a key reason for the kitchen table revolt that will be such a big factor in the November elections. High inflation from excess federal spending and money printing, and the war against fossil fuels is killing the economy.
Mr. Biden inherited an economic boom from his predecessor Donald Trump, and in a little over a year Mr. Biden’s big government socialism turned that “boom” into a “stagflationary bust.”
The economy actually shrank in the first half of this year, with more than 8 percent inflation. That is not economic security. Meanwhile, stock markets are falling, interest rates are rising, and housing is in a deep recession.
Then, there’s the energy fiasco. Mr. Biden has essentially stopped permitting, new fracking, and pipelining. So oil prices are hovering around $100 a barrel, and after a brief respite, gas at the pump is moving up again.
The Biden “Green New Deal” policies basically say “it’s OK to drill, and produce oil and gas anywhere around the world except the United States.” If you think that’s an odd policy, you’d be right. If you think that’s a stupid policy, you’d also be right.
First, Mr. Biden went hat in hand to Saudi Arabia, but that didn’t work out so well as OPEC+ cut back production. He’s still trying to get a nuclear deal with Iran that would include unlocking their oil. Now he’s also back to begging with Venezuela — another stellar democracy loving American ally. Not.
Just to make sure there’s no on-shoring of American energy production, the Bidens are now seeking a complete block on Federal offshore fossil fuel drilling and perhaps new leases.
Wait a minute! They’re also contemplating a ban on natural gas/diesel/refined product exports.
This of course would increase prices, cause a loss in American GDP, force refinery closures, and choke off energy supplies to American allies overseas at their time of greatest need. Did someone say stupid?
On top of all this, the Bidens have decimated the Strategic Petroleum Reserve as their desperate election-year oil selling in order to implement political price-fixing at the pump has taken out about half of the petroleum reserves.
Remember, our strategic reserve was set up years ago in response to an Arab oil embargo that devastated the American economy. Could it happen again? Well given the OPEC + decision to cut production, side with Russia, and poke a sharp stick in Mr. Biden’s and America’s eye, you can’t rule a new embargo out, can you?
Did someone say energy security? Economic security? National security? Oh, by the way, we just hit $31 trillion in federal debt, which comes to about 125 percent of GDP.
The new inflation expansion act, which featured $400 billion worth of green new deal tax credits, has recently been upgraded to a potential $800 billion worth. The student loan cancellation cost estimate started out around $200 billion by the White House but has since been raised to as much as $1 trillion by outside experts.
You know, as a supply-sider, I never really worried so much about debt because I knew lower tax rates would produce more than enough growth and revenues. Then again, I’m starting to rethink because I’ve never seen 125 percent debt to GDP ratio before.
Hard to quantify the economic impact, but I’ll just generalize, it can’t be good. Did someone say economic security? Energy security? National security? Did someone say stupid? Can’t wait for the cavalry to come!
Larry Kudlow was the Director of the National Economic Council under President Trump from 2018-2021. His Fox Business show "Kudlow" airs at 4 p.m &. and his radio show airs on 770 ABC from 10:00 a.m. to 1:00 p.m.
From Larry Kudlow’s broadcast on Fox Business News.