For Joe Biden, the February jobs report provides a reason to celebrate. It looks like America is finally getting back to work. COVID is over. The recovery has begun – if you don’t look closely enough.
The Biden Boom, which someone is sure to call it eventually, is full of holes. Thanks to the American Rescue Plan, which the president talked up ad nauseam during the State of the Union Address, there were billions of dollars pumped into the economy without having anywhere productive to go. As a result, we got what the Republicans have taken to calling “Bidenflation” as prices rise at a rate many of us have not seen since the 1970s.
If you were born during or after the Reagan years – which kicked off a genuine “long boom” that continued far beyond his presidency – you’ve never seen anything like what we’re now seeing. That alone would blame the precipitous drop in Biden’s job approval numbers and why some polls are showing the Republicans leading the Democrats by as much as 20 points on the question of which party do you feel will do a better job handling the nation’s economic challenges.
As to inflation, it looks like the president doesn’t have a clue. In his speech Tuesday, he said the annualized increase in prices – which is hovering near 10 percent – was juiced upwards by the outsized impact the rise in the price of automobiles had on the total:
Last year, there weren’t enough semiconductors to make all the cars that people wanted to buy.
And guess what, prices of automobiles went up. So – we have a choice.
One way to fight inflation is to drive down wages and make Americans poorer.
I have a better plan to fight inflation.
Yes, he has a plan – but how can we trust it when it’s clear he doesn’t get the fundamentals. As the Committee to Unleash Prosperity put it in the Thursday edition of its Hotline:
“We’re still scratching our heads trying to figure out what the White House strategy is for bringing down inflation which is now running between 7% and 10% depending on the measure used…. Then old Joe told a whopper when he said that new vehicles accounted for a third of all inflation over the last year. New vehicles accounted for only 6% of inflation. Even if you add new and used vehicles together, it accounts for only 17% of inflation, half of what he claimed. Inflation is everywhere right now.”
The Biden plan, whatever it is, doesn’t build back anything better. It relies on price controls and government intervention in the marketplace to bring Bidenflation to heel. The problem is it won’t work now any better than it did when presidents in both parties tried in the 70s. What he’s bringing back is Jimmy Carter 2.0, only without the federal deregulatory efforts that were the one bright spot in four otherwise malaise-filled years.
Still, the job growth in February 2022 was impressive. The economy added a total of 687,000 jobs, 654,000 of them scattered throughout the private sector rather than confined to just a few parts of the commercial and industrial sectors. The service sector added more than half a million workers while the leisure and hospitality industries badly battered by the lockdowns added almost 200,000 workers.
These are all positive signs. The good news is the U.S. labor market is recovering. The bad news is that Joe Biden thinks he and his American Rescue Plan are responsible for it all because, as he said Thursday night, it “created jobs. Lots of jobs.”
Biden didn’t create a thing. It was the Republican governors who ended the lockdowns who are responsible for the job growth America has experienced coming out of the pandemic. Month over month, most of the top ten states that had the most “new hires” were led by the GOP while the states that showed no job growth or continued to lose jobs were run by folks who practice Bidenomics.
In his hubris, in the rush to demonstrate his policies are having a positive impact on the economy, he’s claiming credit for jobs that existed until the people who had them were, along with most everyone else, forced to stay home in a futile attempt to stop the spread of COVID. “Our economy created over 6.5 million new jobs just last year, more jobs created in one year than ever before in the history of America,” Biden said, an easy claim to make when the people who see the economy as you do were responsible for killing those jobs (or their predecessor positions in the first place). It’s an assertion that makes as much sense as the observation from a soldier in the field in South Vietnam who explained to a reporter how “We had to burn the village down to save it.”
What’s next? That depends on whether the Republicans in Congress can continue to hold the line and block any further assistance spending packages. As economist E.J. Antoni of the Texas Public Policy Foundation told me, the U.S. economy is currently experiencing “strong, widespread job growth, undermined by inflation.”
“We are at 99 percent of the jobs we had before the pandemic so there’s no reason for any additional stimulus,” Antoni, who also advises the Committee to Unleash Prosperity said. The real problem, he continued “is that there is too much money sloshing around while real wages are plummeting.”
Bidenflation is the real economic enemy, not joblessness. Forecasters had already “baked into the cake” some large price increases for the coming year before the crisis in Ukraine began. That means, Antoni said, “the Middle Class is in for a lot of pain.
Indeed, it’s beginning to look like things could come off the rail at any time, especially if Biden gets his way on initiatives like the Green New Deal – under whatever name it is known now – and other attempts at central economic planning that didn’t work in the 70s, didn’t work in the former Soviet Union and won’t work here in America ever. Prosperity initiatives leading to growth like those enacted before the 1982 recession may be the only way out of the mess we’re in. As a senator, Biden voted against most of them when they were before Congress in legislative form. There’s no reason to believe he’ll offer them up now as president but, if he were serious about restoring the health of the U.S economy, he could do a lot by taking off the brakes he’s imposed on the U.S. energy sector. That alone could lift our economic prospects by making essential energy cheaper, creating new opportunities for exports, and millions of new, well-paying jobs. Real growth, real increases in real wages and a reality check to remind everyone the free market works.