Biden’s Alternate Economic Universe

By Dominic Pino

Sunday, September 18, 2022

 

The economy that exists in Joe Biden’s head is significantly better than the economy in the real world. That’s the major takeaway from the president’s comments to CBS’s Scott Pelley on 60 Minutes tonight.

 

Pelley asked Biden about the August inflation report, which put year-over-year inflation at 8.3 percent and month-over-month inflation at 0.1 percent.

 

BIDEN: Well, first of all, let’s put this in perspective. Inflation rate month-to-month was just up, up just an inch, hardly at all.

 

PELLEY: You’re not arguing that 8.3 is good news.

 

BIDEN: No, I’m not saying it is good news. But it was 8.2 or 8.2 before, I mean it’s not, you’re acting to make it sound like all of a sudden, “My God, it went to 8.2 percent.” It’s been –

 

PELLEY: It’s the highest inflation rate, Mr. President, in 40 years.

 

BIDEN: I got that. But guess what we are. We’re in a position where for the last several months it hasn’t spiked. It has just barely, it’s been basically even, and in the meantime, we’ve created all these jobs, and prices have gone up, but they’ve been down for energy. The fact is that we’ve created 10 million new jobs, we’re in, since we came to office, we’re in a situation where we, the unemployment rate is up at 3.7 percent, one of the lowest in history, we’re in a situation where manufacturing is coming back to the United States in a big way, and look down the road, we have massive investments being made in computer chips and employment, so I, look, this is a process, this is a process.

 

Inflation is the top political concern for voters right now, and according to a recent poll, 59 percent of voters who name inflation as their top concern plan to vote Republican in November. “This is a process” is not likely to persuade them out of that choice.

 

The process of reducing inflation was made more difficult by Biden’s signature on the American Rescue Plan Act in March of last year, which even left-leaning economists warned would contribute to inflation. Not only that, but it didn’t create a single job in all of 2021.

 

The president is right that inflation hasn’t spiked in the past few months, but not spiking is not the same as declining. Biden said inflation is “basically even,” as though that were a good thing. Holding steady at a 40-year high is not good news, and Pelley was right to push back on Biden’s characterization of the inflation report.

 

Biden’s curious comments on inflation continued:

 

PELLEY: And you would tell the American people that inflation is going to continue to decline?

 

BIDEN: No, I’m telling the American people that we’re going to get control of inflation, and their prescription drug prices are going to be a helluva lot lower, their healthcare costs are going to be a lot lower, their basic costs for everybody, their energy prices are going to be lower, they’re going to be in a situation where they’re beginning to gain control again. I’m more optimistic than I’ve been in a long time.

 

PELLEY: Sir, with the Federal Reserve rapidly raising interest rates, what can you do to prevent a recession?

 

BIDEN: Continue to grow the economy. And we’re growing the economy. It’s growing in a way that it hasn’t in years and years.

 

PELLEY: How so?

 

BIDEN: We’re growing entire new industries. We’re, 695, I think it is, or 85 thousand new manufacturing jobs, just since I become president of the United States. Continue to grow the economy and continue to give hard-working people a break, in terms of, we pay the highest drug prices in the world, of any industrialized nation, making sure that Medicare can negotiate down those prices. By the way, we’ve also reduced the debt. We reduced the deficit by 350 billion dollars my first year. This year it’s going to be over a trillion, 500 billion dollars reduced the debt, so to continue to put people in a position to be able to make a decent living and grow, and grow, and increase their capacity to grow.

 

The entire premise here doesn’t make sense. Inflation cannot continue to decline when, by the president’s own characterization, it is “basically even.” And the economy cannot continue to grow when it has, in fact, been shrinking for two consecutive quarters. Whether that counts as a recession is debatable, but whether negative numbers count as growth is not.

 

Pelley should have called out Biden for his comments on the deficit. The American Rescue Plan was the most expensive spending bill of the past 50 years, adding $1.9 trillion to the debt. The savings from the so-called Inflation Reduction Act (which Pelley referenced in his introduction as “the largest investment ever on climate change,” never mentioning inflation reduction) are largely based on gimmicks. And even if they weren’t, they are more than completely wiped out by the estimated cost of Biden’s illegal student-loan “forgiveness.” The continued torrent of government spending certainly isn’t helping to lower inflation.

 

On top of that, the real reason the markets were so spooked by the August inflation report was the steady increase in core inflation, which came in at 0.6 percent month-over-month and 6.3 percent year-over-year. The month’s decline in gasoline prices covered for persistent price increases in just about everything else.

 

The president doesn’t control the price of gasoline, something that Democrats were quick to say when prices were going up. But now that prices are going down, Biden is trying to claim credit:

 

PELLEY: Mr. President, the price of gasoline is down about 26 percent from the five-dollar high. What can you do to keep that price down while Vladimir Putin is throttling energy supply?

 

BIDEN: Well, there’s a, there’s a couple things we’ve done. For example, remember where I got some criticism for releasing a million barrels of oil a day from the Strategic Petroleum Reserve? And then along came the industry saying they’d produce another million barrels a day by the spring, so I think we’re in relatively good shape.

 

Biden thinks we’re in “relatively good shape” with gasoline prices up by $1.27 per gallon since the week he took office. He apparently thinks an extra million barrels per day are going to show up in the spring. (From where? And how?) And his abuse of the Strategic Petroleum Reserve — which is supposed to be for acute emergencies, not months-long periods when oil prices are high — has likely had little effect on energy prices, which are set on global markets.

 

Biden is living in an alternate universe where the economy is thriving. If only we all could live there.