VICTOR JOECKS: Biden is blowing it on the economy
To preside over a roaring economy, all President Joe Biden had to do was nothing. For someone who campaigned from his basement and avoids news conferences, that shouldn’t have been difficult.
As Thursday’s GDP numbers show, however, the Biden economy continues to disappoint. Forecasters had predicted the economy would grow by 8.4 percent. Instead, it grew by 6.5 percent. The 400,000 new unemployment insurance claims were also higher than the expected 380,000.
Under Biden’s watch, sour economic news is the new normal. Inflation is significantly straining family budgets. The prices of everything from groceries to lumber to housing to cars to gasoline have increased. Even toy prices are set to jump before the Christmas shopping season, according to reports. In June, the month-over-month increase was almost 1 percent. Compared with a year ago, prices are up 5.4 percent.
The rhetoric around inflation is concerning, too. In March, Treasury Secretary Janet Yellen dismissed inflation as “a temporary movement in prices.” Early this month, she said, “I think we will have several more months of rapid inflation.”
In addition, unemployment numbers have stagnated. In January, the national unemployment rate was 6.3 percent. In June, it had fallen to just 5.9 percent. Things are worse in Las Vegas. Clark County’s unemployment rate was 9.8 percent in January and just 8.9 percent in June.
Sometimes, a president’s actions have little bearing on the economy. Long-term trends can be more influential than who’s in the White House.
But Biden’s actions have clearly contributed to these longer-term problems. When Biden entered office, the economy was below its pre-pandemic high but growing rapidly. Thanks to the vaccines developed under then-President Donald Trump, the coronavirus pandemic and economic restrictions were fading.
That didn’t stop him and congressional Democrats from passing the $1.9 trillion American Rescue Plan in March. As the American people are learning the hard way, there’s no need to rescue a booming economy.
That plan contained oodles of spending on Democratic priorities, including enhanced unemployment benefits through Labor Day. As a result, many people are “earning” more on unemployment than they did at their old jobs. That is a suboptimal outcome. It helps explain why Las Vegas’ unemployment rate is so high while businesses can’t find enough workers.
On Wednesday, Federal Reserve Chairman Jerome Powell acknowledged that “very generous unemployment benefits” contributed to people not returning to the labor market. You don’t say.
Fewer people in the labor market means fewer goods and services are available. You may have heard that the Reno airport is facing a fuel shortage. Part of the problem is there aren’t enough truck drivers to transport fuel from places where it is available. That’s but one example of a supply shortage. Combine that with showering “free” money on people and you can see why inflation is high. Too many dollars are chasing too few goods.
Biden also killed the Keystone XL pipeline, another needless blow to the economy.
Unfortunately, Biden and congressional Democrats are trying to pass another multi-trillion-dollar spending package. No thanks. The American economy still hasn’t recovered from their first spending binge.
Contact him at vjoecks@reviewjournal.com or 702-383-4698. Follow @victorjoecks on Twitter.