July 27, 2023

Bidenomics is the topic of the month for the MSM.  President Biden is claiming that his economic policies are working.  His supporting evidence is that the economy has grown since being shut down, people who were prohibited from working are now returning to work, and inflation has slowed.

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Is Bidenomics working?  It depends on what your definition of “working” is.

Economic growth and job creation, as measured in 2023, are not indicators of economic expansion.  You’ve heard of “figures don’t lie, but liars figure”?  Twenty twenty-three economic growth and job creation numbers are the “liars figure” statistics.  They’re being measured against the years of forced shutdowns — making them meaningless.

That leaves the question of inflation.  Is Bidenomics bringing inflation under control?  Perhaps, but with great pain.

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Product prices are driven by supply and demand.  Prices can be lowered by increasing supply or by lowering demand.  Donald Trump controlled inflation by increasing supply.  He unleashed industry to flood the market with products.  Productivity was up, prices remained low, jobs were abundant, the economy expanded, and our standard of living improved.

Joe Biden is attempting to control inflation by focusing on the demand side of the equation.  He is fighting inflation by raising interest rates and taxes — thus lowering our ability to purchase.  As interest and taxes go up, fewer people can make big-ticket purchases, demand is lowered, and prices stabilize.  By reducing our ability to purchase products, supply exceeds demand, and prices remain under control, but our standard of living declines.

Let’s examine some of the factors that drive inflation.

Whenever the government lowers the value of our money, inflation increases.  When our “public servants” in Washington put more money into circulation by either borrowing it or printing it, the value (buying power) of the money goes down.  It’s simple supply-and-demand economics.  The more there is of something, the less valuable it becomes.  Venezuela has tons of money — and it takes a ton of it to buy bread.  The Venezuelan currency is the Bolivar, and they’re issuing it in 50,000-Bolivar notes — because that’s what it takes to buy anything.  Venezuela proves that artificially creating money triggers inflation.  Our federal government currently has over $31 trillion in borrowed money.  And yet Joe Biden wants to borrow more — hence his demand to raise the national debt ceiling.

Product scarcity also factors into inflation.  Precious metals are valuable for one reason: they’re rare.  Again, it’s simple supply-and-demand economics.  If there’s not enough of something to meet the demand, prices go up.

This brings us to our struggling supply chain.  If there aren’t enough products to meet demand, the available products get a bit pricey.  COVID protocols and work disincentives starved the country of skilled workers and disrupted the flow of products into the supply chain.  Restrictions on domestic fuel production have created energy shortages.  Attempts at social engineering, such as California’s AB5, which killed private contracting (gig contracting), are further disrupting the supply chain.  As a result, we continue to see shortages for products and services that used to be routinely available — paper products, repair parts, food staples, dog food, and even baby formula.  Skyrocketing prices for those products are the inevitable consequence.