In the 1980 presidential campaign, the Republican challenger, Ronald Reagan, said, “A recession is when your neighbor loses his job. A depression is when you lose yours. And recovery is when Jimmy Carter loses his.” The Gipper turned out to be correct. The gale-force winds of rising inflation had knocked working-class people to the ground, with paychecks shrinking month after month. Reagan wound up winning a landslide victory, and Carter was bounced out of office.
The middle class hates inflation. The New York Times recently surmised that the effects of inflation are mostly “psychological,” and that people should appreciate that “the U.S. economy is doing well.” Wrong. People feel the impact of rising prices daily. It doesn’t just make them FEEL poorer. They are poorer.
President Joe Biden doesn’t seem to get that, and if he doesn’t get it soon, he may suffer the same fate of a ruined presidency that befell Carter. Biden has been touting wage gains for workers of 4%. During normal times, that would be a very solid number. Except, for every one of the past six months, the consumer price index has outpaced wage gains. Over the past year, inflation has been running at 6.2%, which means that the public’s purchasing power is relentlessly shrinking even with 4% wage increases.
Even more worrisome, the government recently reported that the costs facing businesses to produce their goods and services, the producer price index, is up more than 8% from just a year ago. Such costs are soon and inevitably passed on to shoppers in the form of higher consumer prices.
One of the prices we are all most sensitive to is the gas price at the pump. Gas is now $3.41 a gallon nationally, up $1.31 a gallon from last November. So don’t be surprised if $5 a gallon isn’t around the corner.
Biden isn’t just a victim of bad luck. His policies have detonated this inflation bomb. Remember, when Biden came into office, the first item he signed was a $1.9 trillion stimulus spending plan, which was completely unnecessary because we already had nearly $1 trillion of unspent COVID-19 relief funds in the pipeline. These trillions of dollars of more money heaved into the economy fanned inflation.
Then Biden declared war on American oil, gas and coal. As a result, domestic oil production has fallen by roughly 2 million barrels a day from when Donald Trump was president. So, at $83 a barrel, this means we are losing about $165 million per day in national output and $50 billion a year. It has only given OPEC and the Saudi oil sheikhs leverage to reduce production to raise prices, and there’s nothing we can do about it.
Biden has canceled the Keystone XL pipeline and now wants to shut down a major Midwestern pipeline that is already operative. The move will cause disruptions in electric power production for as many as 1 million people this winter when demand for home heating fuels is highest. Utilities are even warning that families may be required to turn down their thermostats in the dead of winter.
No one in the Biden administration seems to have a clue of what to do. Energy Secretary Jennifer Granholm laughed hysterically when asked what the United States’s response should be to rising gas prices. She said she would need “a magic wand” to bring prices down. It didn’t help matters that Biden reversed a Trump administration directive to allow drilling in oil-rich Alaska a few weeks ago.
Biden seems clueless, and he may need a lifeline of calling a friend to figure out how to combat this alarming inflation trend, which is now anything but “transitory.” By far, the most urgent step to stop the stampede of higher prices is to kill his $3.5 trillion social welfare spending bill, which would be paid for in part by borrowing and printing even more dollars. You don’t have to have an advanced degree in economics to understand this will worsen inflation. Yet he and House Speaker Nancy Pelosi keep insulting the people by saying the Godzilla bill they are pushing “will cost nothing — it’s free.”
And while we are on the subject of Biden’s false claims, he continues to assure the public that he won’t raise taxes on those who make less than $400,000. But, Mr. President, inflation is a tax. It is the unfairest tax of all. You don’t have to be Bill Gates or Warren Buffett to realize that you’re paying this Biden tax every time you fill up your gas tank.
Stephen Moore is a senior fellow at FreedomWorks. He is also a co-founder of the Committee to Unleash Prosperity and a Washington Examiner columnist.