Democracies depend upon the people’s trust in their elected leaders. Joe Biden has squandered the trust that the voters gave him when they elected him president in the 2020 election. Furthermore, Biden has insulted the intelligence of the voters by denying facts in plain view and attempting to redefine the meaning of words that don’t serve his political narrative.
One of the first words Biden and his supporters redefined was inflation, which they sought to minimize last year as “transitory,” long after it became clear to almost everyone else that the excessive spending in Biden’s Covid relief bill had helped unleash an inflationary spiral that quickly spread throughout the economy.
The economic experts of the Biden administration, including Federal Reserve Chairman Jay Powell and former fed chairman Janet Yellin, who is now Biden’s Treasury Secretary, discredited their own professional reputations by pretending that inflation would go away by itself, and that it was not undermining the strength of the US economy, and leading it into recession.
Once the reality of inflation became undeniable and the Biden administration was forced to acknowledge it, the search began for the most convenient scapegoat who could deflect attention away from Biden’s policy failures as the main cause of the inflation and the recession it led to.
Russian President Vladimir Putin fulfilled that requirement admirably. He is the perfect villain for the Biden administration’s narrative exonerating itself, first for the high price of gas at the pump, and then for the other economic consequences of Putin’s invasion of Ukraine, including global food shortages and soaring prices for consumer staples at the supermarket.
When gas prices were soaring, the Biden administration insisted that it was all Putin’s fault, and that the White House could do very little to bring them down. But when the global market price of crude oil began to decline over fears that a spreading recession would depress global demand for oil, the White House was quick to claim credit it didn’t deserve for providing relief to car owners at the pump.
REVISING THE DEFINITION OF RECESSION
When confronted with the clear evidence last week that the fears of recession have been realized, the Biden administration sought to escape the political consequences by brazenly trying to revise the classic definition of the word “recession” as well.
In 1974, the late economist Julius Shiskin, whose career spanned the Census Bureau, Office of Management and Budget, and the Bureau of Labor Statistics, issued the classic definition of a recession as two consecutive quarters of economic contraction, as indicated by negative GDP growth numbers. The US economy has now met that definition. According to the Bureau of Economic Analysis, in the first quarter of 2022, GDP contracted by 1.6%. Last week, the Bureau of Economic Analysis confirmed the expectations of many respected economists by announcing that GDP in the second quarter of 2022 also contracted by 0.9%.
But President Biden and his administration refused to accept that reality. They insisted that the indicators of the US economy which still remain healthy, such as the rate of new job creation and national unemployment figures, meant that the negative GDP figures were misleading, and the country was not in recession.
Administration officials had access to the second quarter’s GDP numbers before they were made public. In an effort to discredit them in advance Federal Reserve Chairman Powell declared that he does not believe the US is in a recession because the labor market is strong and American consumers are still spending money.
On Sunday, several days after the GDP numbers were released, Treasury Secretary Yellen said in an interview that two consecutive quarters of contracting GDP are not the technical definition of a recession, but rather just the common definition. Her statement recalled the cynical evasion of President Bill Clinton, who, after he was caught lying under oath to a federal judge, told a grand jury that his guilt or innocence “depends on what the meaning of the word ‘is’ is.”
This is not new. The Biden administration has been preemptively trying to deny the inevitability of the current recession for two months. In June, President Biden said, “First of all, it’s not inevitable.” The same month, Democrat House Speaker Nancy Pelosi falsely declared that the economy had improved. In July, Treasury Secretary Yellen crossed the line between being deliberately misleading and knowingly telling an outright lie when she said flatly, “This is not an economy that is in recession.”
BIDEN MAKES THE LIE OFFICIAL POLICY
Biden made the lie official administration policy by declaring after the second quarter GDP numbers were published that “We’re not in recession,” according to the economists he respects. He also boasted that the deal announced the night before between Sens. Chuck Schumer and Joe Manchin would raise taxes and force the wealthy and “the largest corporations in America to pay their fair share,” and those tax increases would not hurt the economy because, according to Biden, it was not in recession.
At his first press conference after the GDP decline was announced, Biden continued to reject the idea that the country was in a recession. “That doesn’t sound like recession to me,” he said, and then left the podium before White House reporters could ask him any follow-up questions.
The New York Times and the Washington Post, which have been supporting Biden all along, were quick to adopt his false economic narrative. Paul Krugman, the in-house Times liberal economist, warned that “it would be foolish to declare that we’re in a recession” just because of two negative GDP growth numbers for two quarters. Instead, Krugman declared, it is “the people who actually decide whether we’re in a recession,” repudiating his own authority as a professional economist.
LETTING THE AMERICAN PEOPLE DECIDE
But there is an element of truth to Krugman’s declaration. The American people do not make their conclusions about the state of the economy based upon a pair of GDP growth numbers, or the decision of the eight academic economic experts who make up the Business Cycle Dating Committee of the National Bureau of Economic Research, and who meet to discuss such matters in Cambridge, Massachusetts, not far from the Harvard University campus.
Real people judge the state of the economy by their real-world experiences with it. Ask a restaurant owner about how they survived the Covid lockdowns, and they will tell you about the steady customers they lost, their supply chain problems, the doubling or tripling of their raw food costs, their soaring utility costs, and their difficulties in finding and keeping their workers.
Just to stay in business, small entrepreneurs have had to make sacrifices, working longer hours and accepting reduced profits because they know that they can’t pass along all their extra costs to their customers.
For many, waiting for the pandemic disruptions to subside became a test of endurance. When some small business owners ran out of patience or financial resources they were forced to close their doors forever, leaving a gap in their communities that will never be filled.
But the Biden administration offered no help. When inflation started driving up prices, the administration dismissed the problem as “transitory.” When gas prices became unaffordable, Biden denied that his anti-fossil fuel policies were responsible, and refused to change them.
BIDEN REALLY DOESN’T CARE
While Biden repeatedly claimed that he feels the pain of the American people from inflation and recession, he certainly hasn’t acted like it. Often, he would then turn around and tell the same Americans that the pain they are felling is not real. When Bill Clinton told the American people “I feel your pain,” he didn’t say, “You guys don’t understand what’s going on.” That’s why it they believed him.
Meanwhile, the mainstream media continues to accept the Biden administration’s excuses, blame-shifting, and wrongheaded policies, while remaining largely oblivious to the misery they are inflicting on middle class and working-class American families.
Even those fortunate ordinary people, who are not yet feeling the pain of inflation and recession in their own lives, recognize the frustration and fear of those around them, and many fear that they may be next when their savings accumulated during the pandemic run out.
That is why so many American voters, including many disillusioned Democrats, have lost their respect for Biden and his presidency, and why 75% of surveyed Democrats don’t want Biden to run for a second term in 2024. He is governing America as an elite liberal who cares more about his liberal agenda than he does about the needs and wellbeing of the people.
LIBERAL AGENDA WRECKING THE COUNTRY
By following that agenda, the Biden administration and congressional Democrats have been systematically wrecking America for the past 18 months. They launched a war against America’s fossil fuel industry, shut down the Keystone pipeline, blocked domestic oil and gas exploration, and destroyed America’s energy independence. When that led to fuel shortages and soaring gas prices, instead of loosening the restrictions on American producers, Biden embarrassed us all by going to the world’s most notorious despots and begging them to pump more crude oil.
Biden compromised America’s sovereignty and national security by inviting a tidal wave of illegal immigrants and drug smugglers to cross our open southern borders, while ignoring his obligation as president to enforce federal immigration laws.
Biden sided with the teachers’ unions over the needs of this nation’s schoolchildren by keeping the schools closed due to Covid much longer than necessary. When parents objected to the extended closures and their liberal curriculums the schools were teaching their children, Biden’s attorney general labeled them domestic terrorists.
When Biden couldn’t get his liberal social and climate change agendas through Congress, he used executive orders to impose them by expanding the authority of the regulatory state, in a run around of the Constitution’s separation of powers.
Biden’s reckless spending policies, triggering the highest rate of inflation in more than 40 years, have hit hardest the poor and working-class Americans, whose interests Democrats have traditionally claimed to represent.
And now, in a last-ditch effort to save Democrat candidates from disaster at the polls in the midterm elections as voter payback for their past 18 months of failures, Democrat party leaders are doing what they do best: finding new ways to spend more taxpayer money. Their latest climate change and health care schemes will be paid for by increasing the tax burden on America’s most successful industries, and imposing price controls on expensive prescription drugs.
There are many problems in our health care system that need to be addressed, and high drug prices is one of them. But destroying the profitability of the drug companies creating lifesaving new medications to pay for more Obamacare health care subsidies is certainly not the right answer.
FEDERAL RESERVE DESERVES SOME OF THE BLAME
As tempting as it may be for the political enemies of the Biden White House to blame its spending policies entirely for the runaway inflation and recession, Nobel Prize-winning economist Milton Friedman declared that the root cause of inflation is “too much money chasing after too few goods.” That is still true. During the 2020 and 2021, the last year of the Trump administration and the first year of Biden’s term, the US Treasury and the Federal Reserve printed and spent over $13 trillion in new cash.
The Federal Reserve funded much of that monetary growth by doubling its holdings of government debt instruments from just over $4 trillion in early 2020 to just under $9 trillion today — primarily by creating dollars out of thin air to buy up the newly-issued government debt securities.
By keeping interest rates artificially low — near zero percent — long after the US economy no longer needed that kind of stimulus, the Fed encouraged the Biden administration to continue its reckless spending policies, financed by the issuance of new Treasury notes paying very little interest.
American consumers were flooded with excess cash from federal stimulus payments at a time when the economy was partially shut down and incapable of producing the goods needed to satisfy the consumer demand that all that excess money had created. Biden’s $1.9 trillion Covid stimulus bill, passed when the economy was already recovering from the Covid lockdowns, was the monetary “straw that broke the camel’s back.” It created more consumer demand for goods while discouraging laid off worker from going back to work to produce them. The combination supercharged the forces of inflation, which once unleashed could not be easily contained as long as the Biden administration kept feeding with more federal spending.
The Biden administration and its economists sought to justify its continued spending using Modern Monetary Theory, which claims that the federal government can spend as much as it wants and run up national debt without suffering any negative consequences. But runaway inflation and the recession which followed were the real-world consequences of all that excess deficit spending.