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.
For years U.S. lawmakers and special interest groups have promoted policies that drove U.S. manufacturing offshore without people really being aware of it. Higher taxes, workplace regulations, environmental rules with onerous penalties, and other actions by government drove the costs of making things in America up so high it became a matter of corporate survival to take it to other countries.
Good for them, bad for us. China’s middle class has risen at the expense of U.S. workers and their families. Jobs have left places like Michigan and New York and Illinois for places with names most Americans can’t pronounce let alone find on a map.
It was a tragedy for workers and entire communities as the job providers moved away. Middle America understood what was going on, providing Donald Trump with fertile ground for his rhetoric about “bad trade deals” when he ran for president in 2016. For the coastal elites who only looked at the soaring values of their retirement portfolios, it was another story. It wasn’t until the COVID-19 pandemic struck that they realized what they had done.
For probably the first time since World War II, the U.S. economy was riddled with shortages. No matter how much money you had to spend, in some places, there wasn’t a roll of toilet tissue or a bottle of hand sanitizer to be found. Unless, in a few cases, you were willing to wait and buy it from China.
Memories may be short, but it wasn’t just these common household items that were in short supply. Items thought necessary for treating coronavirus patients like ventilators and pharmaceuticals as well as the personal protective equipment for hospital workers on the frontlines fighting the pandemic needed to protect themselves were not available in the quantities needed. China, where the outbreak was first detected, was hoarding what they made for their own use.
Recognizing the problem and expanding on what he promised while campaign, Mr. Trump has been looking for opportunities to bring the manufacturing of these products — and the jobs that go with them — home. And, unsurprisingly, he’s been criticized for doing it.
The Trump administration recently signaled its support for the launch of Kodak Pharmaceuticals, which would be a branch of the once-mighty Eastman Kodak company, by providing a $765 million loan to get things going. Kodak has been the anchor of Rochester, New York’s economy but has had difficulty adapting to the digital age.
This deal would not only stabilize a domestic supply chain, but it would reestablish the Rochester economy with a huge boom in the job market. So you would think the establishment of a new corporate entity to manufacture pharmaceutical ingredients in the United States that will help secure America’s drug supply chain and create what the Democrats used to call “good jobs at good wages” would be met with cheers and brass bands. Instead, the company finds itself under examination because the news caused the company’s stock to rise in value, creating the illusion that some company executives benefited financially.
It’s that kind of muddled thinking that drove so many jobs and companies out of the United States in the first place. At a time when initiative at home is desperately needed in the corporate sector, the first ones to step to the front of the line find themselves the victims of bad press and potential investigations. This is not to excuse any bad actions or actors – and if there were any, they would have been uncovered by Kodak’s independent review, but none were.
We should expect that a company’s “good news” should lead to an increase in the price of its stock. That’s good for the shareholders, which should be any company’s principal if not the only concern, as well as the country. The idea that people working for the company might also profit is the hallmark of the suspicious, anti-free market attitudes that infected the media, members of the political class, and consumer watchdogs for decades and which, more than once, nearly destroyed the American economy.
Senior White House trade advisor Peter Navarro recently called COVID-19 a wake-up call for the nation, not just because of the threat it posed to our health or healthcare system but because it left us defenseless in economic and national security terms. “We have already witnessed over 80 countries impose some form of export restrictions on medicines or medical supplies, proving that no matter how strong our friendships or alliances may be, they mean nothing in a pandemic,” he told the Wall Street Journal.
Kodak was found innocent of all “charges” after an in-depth internal investigation. Policymakers and watchdogs need to move on and come up with a plan to bring manufacturing and jobs home, by creating incentives to do just that.
There are a lot of tools in the tool kit to make this possible: tax breaks, additional deregulation, export assistance, and opportunity zones are just a few of the things that can be dangled in front of the heads of big companies to lure them to bring their operations home.
America needs a big plan that ties them and other ideas together to bring the manufacture of essential goods like pharmaceuticals and PPE home, before the next global pandemic hits. Breaking our 100% dependence on foreign manufactures located in countries whose interests may diverge from ours at some future and highly inconvenient time must become a national priority now.
by Ali Meyer • Washington Free Beacon
California is projected to have a $15 statewide minimum wage by 2022. Economists project this will lead to a loss of 400,000 jobs, according to a report from the Employment Policies Institute.
Currently, the federal minimum wage is $7.25. California’s is $10.50, which is one of the highest minimum wages in the United States. California’s intent to raise it to $15 by 2022 will create the largest gap between a state minimum wage and the federal wage in U.S. history.
“One might argue that a higher minimum wage is justified in California because of its relatively high cost of living compared to the typical state,” the report says. “On the other hand, one might be concerned about whether the higher minimum wage in California causes job loss for low skilled workers, and whether the effects differ in the cities where the cost of living and wages are relatively high as compared to rural areas or less expensive cities.”
California has consistently raised the minimum wage since 2001, even higher than what was mandated by federal law. The study finds that this increase has led to a decline in employment.
by Kenneth Bloomquist
Standing before an audience of college students, President Obama remarked that “As Americans, we can and should be proud of the progress that our country has made over these past six years. This progress has been hard, but it has been steady and it has been real. And it’s the result of the American people’s drive and their determination and their resilience, and it’s also the result of sound decisions made by my administration.” These remarks sound more defensive than confident. The President asserted that Americans should feel proud of the modest economic gains his administration frequently cites, but given that over half of Americans still consider the economy to be meandering through a recession it seems they have overwhelmingly rejected his outlook and chosen to remain humble instead.
Perhaps they’re being overly pessimistic? In the President’s defense, the metrics commonly used to measure the duration of recessions do indeed place the end of the Great Recession in 2009. Since then, GDP has risen slowly, but steadily, at an adjusted rate of just over 2% per year. The unemployment rate has fallen from its 2009 high of just under 10% to just under 6%, and new jobs are being created at a pace which is improving with time. And yet despite the graphs and charts, Americans refuse to be optimistic no matter how often they are told to be. The economy as described in press conferences doesn’t seem to be same one which most Americans live and work in, where family and friends remain unemployed or underpaid, where they have been passed over for raises, and where there just isn’t enough income leftover to save. Americans may not all have advanced economics degrees, but they are intuitively aware when times are good and when times are bad, and they remain skeptical even when bombarded by a steady stream of rose-tinted statistics. Continue reading
by Stephen Moore • NY Sun
What ever happened to the old-fashioned American work ethic? I ask this because Thursday’s Labor Department report for June found yet another 430,000 Americans of working age (16+) dropped out of the workforce.
Over the last year more only 1.3 million of Americans of working age have entered the workforce even as the population of this same demographic increased by more than 2.8 million. Just over 1 million of this group found jobs. That’s right—of the increase in working age population, less than 36 percent found employment! Continue reading
Freedom and opportunity are on the horizon with a new crop of principled, capable and positive conservatives.
by George Landrith
In the past few weeks and the next couple weeks, we will see most of the expected entrants into the GOP presidential sweepstakes make their plans official. The GOP bench is deep with a number of highly credible and well qualified potential nominees. Part of this deep bench is the result of the conservatives doing well in a majority of the non-presidential and state elections during President Barack Obama’s time in office. The GOP has gained 70 seats in Congress and 910 state legislators around the nation since Barack Obama took office.
If you’re a conservative, there is a lot more good news on the horizon. That deep bench of well-qualified and highly credible candidates is revealing itself in congressional elections around the nation. Speaking with campaign experts around the nation, one thing is clear — the GOP has a bumper crop of great conservative candidates.
I can’t write about each of them, but perhaps I can pick one that caught my eye and shows real promise. In Florida’s 18th Congressional District, an established name is retiring from the House of Representatives to pursue the U.S. Senate seat being vacated by Sen. Marco Rubio. Rick Kozell has announced his candidacy for the open congressional seat in the Treasure Coast and Palm Beach area.
Here’s what I like about Rick Kozell — he’s an optimistic, principled conservative with a winning vision for the future. He reminds me of a young Ronald Reagan. The press will have a hard time casting him as the stereotypical angry conservative. Kozell is affable, young, smart, and articulate. His smile is natural and his energy and enthusiasm are obvious. Continue reading
by Jeff Cox • CNBC
The revelation, contained in a new survey Wednesday showing how much work needs to be done yet in the U.S. labor market, comes as the labor force participation rate remains mired near 37-year lows.
A tight jobs market, the skills gap between what employers want and what prospective employees have to offer, and a benefits program that, while curtailed from its recession level, still remains obliging have combined to keep workers on the sidelines, according to a Harris poll of 1,553 working-age Americans conducted for Express Employment Professionals. Continue reading
Regardless of the President’s claims, the economy is weak and the “recovery” is almost invisible to most Americans.
Editorial Board • Washington Examiner
During his 60 Minutes interview late last month, President Obama put an old and familiar rhetorical question to the voters: “Ronald Reagan used to ask the question, ‘Are you better off than you were four years ago?’…And the answer is, the country is definitely better off than we were when I came into office.”
Most members of the public do not share this view, according to this week’s Washington Post/ABC News poll. Only 22 percent surveyed agreed that they are “better off financially” than they were when Obama was inaugurated in January 2009 — including only 37 percent of Democratic partisans. This says a lot about how people feel, because six years ago, the nation was embroiled in the very financial crisis that Obama still cites to absolve himself from blame for America’s continued economic doldrums.
When pressed in the same interview, Obama had to concede that most Americans aren’t feeling the recovery he has been touting ever since the so-called “Recovery Summer” of 2010. That’s because for workers, there hasn’t been much of a recovery. Continue reading
Last month, when the Bureau of Economic Analysis announced that gross domestic product had grown at a lead-footed rate of 0.1 percent in the first quarter, economic analysts could focus on two pillars of hope. The first was that the winter weather was unusually awful, and first-quarter growth probably reflected that. And the second? This was a very preliminary number, and it seemed reasonable to think that it might be revised upward.
The operative word is “seemed.” Now the BEA has provided its first revision, and things only get more dismal: The economy actually contracted in the first quarter instead of just lying down on the sofa and feeling all mopey and sad. Key areas of decline were exports, inventories and nonresidential fixed investment. In other words, whatever happened was happening on the business side. Continue reading
After the U.S. economy added only a disappointing 74,000 jobs in December, the worst month of job creation in three years, economists expected the U.S. Bureau of Labor Statistics on Friday to report substantial improvement in January.
Well, the 113,000 jobs added last month certainly represents an improvement from December. But such job growth is far from substantial. The consensus of economists surveyed by Bloomberg ahead of Friday’s report was 180,000 jobs.
Some blamed the weak jobs number on January’s frigid weather in much of the nation.
Polar vortex or not, January marked an unhappy milestone for the nation’s jobless – exactly six years since the economy reached the peak number of jobs, as Businessweek pointed out.
Some 8.7 million jobs were lost during the so-called Great Recession of 2007-09. And in January, some four and half years after recession ended and the Obama recovery began, the U.S. was still nearly 1 million jobs shy of where it was six years ago. Continue reading
The recent job report was disappointing on several different levels. The new jobs number was appalling. The number of new jobs, 74,000 doesn’t even keep up with population growth. In fact, if it were doubled, it would still be short of keeping pace with population growth. Simply stated, it means we are moving backwards.
But it gets worse — a shockingly large and growing group of Americans are chronically jobless and have evidently given up hope of finding a job because they are completely outside of the workforce. Another 347,000 Americans left the workforce. Continue reading
One blessing of the holiday season is upon us: The prospect that members of Congress will actually stay away from Washington for a few weeks, leaving what’s left of our liberties and livelihoods alone until the new year.
Glory, hallelujah, amen.
Of course, lawmakers will be back at it soon. And we’re already seeing signs that they have no idea how to address the serious problems average, struggling Americans face every day. Continue reading
Last week, President Obama gave a much-touted speech on “income inequality.” But while inequality is a valid concern, it’s not so clear that unequal incomes are the biggest problem America faces.
More troubling — as figures as distinct as Slate’s Matthew Yglesias and National Review’s Mark Steyn both noted — is the growing divide between an America where people have jobs, and an America where people live off of government benefits.
As Yglesias observed:
The Washington, D.C., metropolitan area has become an island of prosperity in an ailing country. But D.C. itself has an 8.9% unemployment rate even as it sits at the center of a metro-area unemployment rate of just 5.4%. For people who haven’t gone to college — the kind of people who live in the neighborhood where Obama was speaking — the unemployment rate is 20%. That’s a disaster. And while Obama talked about plenty of things that could help those unemployed families — subsidized health care, better schools for their kids — he didn’t really talk about anything that would get them jobs. The biggest applause line of the speech was about raising the minimum wage, which is great, but also doesn’t help you very much if your current wage is $0. Continue reading
It’s amazing how little President Obama has learned about economics in his four and a half years in the White House. Growth, incentives, tax reform, tax increases, private investment, the middle class, a second great depression, the sequester—all these issues have one thing in common: Obama doesn’t understand their role in our economy.
Nor does he appear interested in finding out. Members of the now-defunct President’s Council on Jobs and Competitiveness have privately talked about Obama’s economic shallowness. After the 2010 election, he invited four conservative economists to the White House. When former Congressional Budget Office director Douglas Holtz-Eakin broached the subject of the economic cost of Obamacare, the president dismissed it as politics, not economics.
Obama seems oblivious to the feeble recovery his policies have produced since the recession bottomed out in June 2009. The jobless rate is 7.3 percent. But if the millions who’ve dropped out of the job market altogether since Obama took office in January 2009 were counted, the unemployment rate would be 10.8 percent. “In other words, the United States faces a permanently larger pool of jobless Americans,” says the American Enterprise Institute’s James Pethokoukis. Continue reading
Political crusades for raising the minimum wage are back again. Advocates of minimum wage laws often give themselves credit for being more “compassionate” towards “the poor.” But they seldom bother to check what are the actual consequences of such laws.
One of the simplest and most fundamental economic principles is that people tend to buy more when the price is lower and less when the price is higher. Yet advocates of minimum wage laws seem to think that the government can raise the price of labor without reducing the amount of labor that will be hired. Continue reading