The Joe Biden Economy
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Watching the Joe Biden speech on the economy. He said that “America’s economy is doing better than other countries in the world.” Sigh.
So what.
America is not like any country in the world. There is a reason why people left all the other countries of the world to come to America. Back then, it was the “great sorting”. Risk-takers, doers, and people with dreams left their countries to come here. America shouldn’t compare itself to others. America is very different. The point in America is to excel and rise far above the others.
We are Americans, we aren’t like the others. We were born to be different and while I certainly can appreciate other countries and other cultures, I don’t want to be compared or be like them.
I am reminded of Thomas Sowell when Biden speaks. Sowell said, “I have never understood why it is "greed" to want to keep the money you have earned but not greed to want to take somebody else's money.”
In the past few days, luminaries like Jamie Dimon and Elon Musk, have warned of a coming financial hurricane. My guess is investors that are heavy in cash are waiting like vultures to pounce. I don’t think Dimon and Musk would agree on politics and I notice JP Morgan isn’t Tesla’s banker but they seem to agree we are in for some tough times. Goldman Sachs CEO echoed them and we are seeing other CEO’s on earnings calls talk about the difficulty going forward.
For what it’s worth, I bought more puts yesterday on the S+P during the rally. This is a sell the fucking rip (STFR) market. If you go short and it goes against you, wait and endure the pain. You will get it back and then some until something changes. I think the $SPY trades 320. Currently, it’s at ~410. I think Bitcoin trades $12K before it trades $50K. Currently, it is at ~29K.
A Sowell quote accurately sums up Biden’s speech. He said, “When you want to help people, you tell them the truth. When you want to help yourself, you tell them what they want to hear.”
I think Democrats’ strategy is to double and triple down on things that don’t work because they think they haven’t moved fast enough, and that’s why Biden’s popularity is in the tank. He’s less popular than George W. Bush who wasn’t even invited to speak at the Republican Convention in 2008.
Democrats also push the war thing because they think people will rally around the President in times of war. They don’t get it. People are smarter than they give them credit for.
Biden’s solution:
A “sensible” tax increase.
Blame the war that Biden inadvertently invited.
Blame Trump.
Take credit for things they didn’t do like people going back to work after being locked down by Covid for two years.
More government programs that won’t work.
Biden is doing nothing to lower prices because the two largest inputs to the cost of production are the costs of labor and energy.
Biden is artificially raising the cost of labor, and he is actively attacking the ability of the American energy industry to produce. By the way, if there are mandatory minimum wage increases that were instituted in your local area, the cost of labor will go up as soon as that wage increase happens. Any dummy that learned how supply and demand curves operate knows he is backward on all of them.
I watched the President speak. If he was Pinocchio, he’d be able to use his nose as a third leg.
Let’s look at some facts since Biden says facts matter:
The “rising wages for working families” might be going up, but inflation is up double digits on an annual basis. The wages of people can’t keep pace. The Joe Biden economy is taking money out of your pocket every single minute of every day.
Prices were rising at a very high rate far before Putin invaded Ukraine. As I showed yesterday, the seeds for inflation were sown with incredible increases in government spending during Covid; and went into high gear with the Joe Biden Economy in March of 2021.
Ukraine exports about 10% of the world’s wheat and this year Ukrainian farmers heroically got about 80% of their crop in. The real question is will Ukrainian farmers be able to export grain if they can harvest it? Don’t put it past Russia to burn the grain fields. What’s Biden doing about that?
Home-grown biofuels actually increase the cost of gas, and decrease the gas mileage on your vehicle. They suck for people and divert feed that could go to livestock to the gas pump. That policy also creates weird incentives when it comes to planting. Farmers might plant differently given a policy based on decentralized capitalism and free markets.
Democrats always trot out the “tax credit to make homes more efficient”. You still have to spend money to get it efficient. It’s a dumb policy.
Centralizing negotiation for drug costs also is dumb. It does nothing to increase the supply. Putting in price caps creates shortages and black markets. This is microeconomics 101. Better to deregulate the medical industry and make it so getting insurance is more competitive. Instead, Democrats want to continue to socialize medicine which drives up costs and rations care.
To lower rent and mortgage costs you have to increase the supply of housing, and decrease interest rates. The Fed has to raise rates because of inflation, courtesy of The Joe Biden Economy. Local governments determine zoning laws that affect where and what kind of housing can get built. Besides, the raw materials that go into building a house have had their costs go up double digits over the past couple of years. That is if you can get them, and the people to actually work on the house.
Increasing corporate taxes increases taxes on consumers because they pass along the tax. Corporations are tax aggregators. Increasing corporate taxes also decrease the ability for companies to raise wages for the people who work for them. Increasing corporate taxes hurts the working class in their paychecks, and at the store.
Biden would institute a crushing multinational corporate tax scheme that would decrease competition between countries when it comes to where to recognize income, create jobs, and decide where to headquarters.
Biden never paid his fair share when he had the chance to. Never forget that demand curves slope down. Taxes aren’t incentives, they are hurdles to jump over or be avoided.
The Democrats are so narrow-minded and have such tunnel vision they cannot change course. I love venture capitalist Marc Andreessen’s motto “strong opinions loosely held”. It means you keep your mind open to objective data which could change your opinion. This is hard to do when you are in a cult and a lot of thinking and policy in America is cultish today.
It’s arguable that Joe Biden and his administration are the worst since at least Herbert Hoover and possibly in the history of the United States. This is based on data.
Some inflation was unavoidable. With all the money creation and government spending, it was bound to happen. But, Biden made it significantly worse with his policies in every single industrial sector.
I was wondering when there would be a “Let Them Eat Cake” moment in the Joe Biden Economy. I think it might have been when government officials and Limousine Liberals said to “just breast feed”.
I drove across the country a couple of weeks ago. People are hurting. You can tell. Especially when you chat with the small business owners.
Just remember what Uncle Miltie said, “If the Federal Government managed the Sahara Desert, in a few years it would run out of sand.”
If I were a Democrat in the Senate, I might start drafting articles of impeachment just to get rid of this guy. Already, people are fleeing his administration so they aren’t tarnished and their careers permanently stained. Problem is, the people on-deck aren’t any better.
I always like your writing, but this feels like one of your recent bests.
When referring to the President, we tend to make it about the President. I'm not trying to sound stupid, but pointing out that almost all of the policy and actions have been researched, poll tested and fine tuned by everyone but the President. People with other ideological agendas, most probably Far Left.
I read a WSJ article today that says that the White House has two factions -- one is Biden's inner circle, who have been around longer than the rest of the secondary staff, which are probably all young Millennials and wide eyed activists. It appears that the "staff" is proposing many things, while the "inner circle" seems to be rejecting them. Or, perhaps the staff is proposing too many ineffective solutions that the Far Left likes, but that aren't true economic solutions.
I don't know who is winning the policy war over there, but it's not Biden (he wouldn't know what to do), and it's probably not anyone with a brain that has a grip on economics. This was the same problem with Obama, in that they had no private sector experience.
It always amazes me that you need a license to practice everything else, but any political idiot can make any very harmful move to the economy once in the White House or Congress. Did these people study classical economics? Do they understand what they are doing, or is everything just a poll tested, thin veneer of a policy with no substance?
Jamie Dimon recently said that oil could go to $175 bbl and natural gas is at $9.52 per thousand cubic feet, up from $1.52 in January 2020. Biden killed energy independence and like someone who has no bills to, no gas to purchase, no food to purchase is oblivious to any of the pain going on in the country. He is just as bad as Obama when it comes to optics and we need the House and Senate in November---which will be next January 2023.