VICTOR JOECKS: Bidenflation has set up the next recession
President Joe Biden has a very important announcement about inflation: It’s not his fault. Don’t expect him to take responsibility for the recession he’s about to cause either.
On Tuesday, Biden held a news conference on rising prices. It was certainly timely. Inflation keeps hitting levels not seen in four decades. Officially, it was at 8.5 percent in March.
Gasoline prices reached a new record Tuesday, topping $4.34 a gallon nationwide. That would be a dream in Las Vegas, where the average price now sits at $5.13. A year ago, the price in Clark County was less than $3.57 a gallon. Food is more expensive, too. The government claims the price of food has increased 8.8 percent over the past year.
If anyone knows a grocery store where food prices are only up 8.8 percent, please let me know. As someone who does most of the shopping for a larger family, I’d guess our bill is up at least 15 percent to 20 percent. At least my family doesn’t have an infant anymore. Even I didn’t think Biden would be so incompetent that the country would be running out of baby formula.
Biden tried to shift the blame. He said inflation was caused by the coronavirus and Russia’s invasion of Ukraine. A reporter then asked if he took any responsibility for the problem. The president said, “I think our policies helped, not hurt.”
That’s absurd. Biden and congressional Democrats passed the $1.9 trillion American Rescue Plan last year. Even former Clinton Treasury secretary Lawrence Summers warned that bill could “set off inflationary pressures of a kind we have not seen in a generation.”
Biden declared war on the oil and gas industry and killed the Keystone Pipeline. Little surprise that gasoline prices have soared.
Last summer, Biden dismissed concerns about inflation. He said it would be “temporary” and even that it was “expected.” Last December, he admitted that inflation “is a real problem,” but said, “I think it’s the peak of the crisis.”
Nope.
I asked Sen. Catherine Cortez Masto’s office if she agreed that Biden’s policies have helped reduce inflation. Those are her policies, too. Without her vote, the inflation-causing American Rescue Plan wouldn’t have passed.
Her office didn’t respond. No surprise.
It’s obvious that a recession is coming. To stop inflation, the Federal Reserve is raising interest rates. That’s the right move, and it needs to pick up the pace. The downside is that rate hikes slow the economy and increase unemployment.
Mortgage rates have nearly doubled since December. Housing is a lagging indicator, but you can see the market is starting to crest. That means home prices will start dropping soon. Things will likely start spiraling downward if home prices fall while unemployment shoots upward. Oh, boy.
No wonder investors have lost confidence in the economy. The S&P 500 hit a 52-week low on Tuesday.
Zoom out and see the bigger picture here. Biden — and officials throughout government, including the Federal Reserve — keep getting it wrong. Don’t believe their happy talk when they claim they can stop Bidenflation by recycling the policies that caused it in the first place.
Victor Joecks’ column appears in the Opinion section each Sunday, Wednesday and Friday. Contact him at vjoecks@reviewjournal.com or 702-383-4698. Follow @victorjoecks on Twitter.