It’s not just Afghanistan and the specter of a hostage crisis with the Taliban. Inflation is vastly outpacing job creation and driving down wages. The border remains in crisis and the courts have ordered the reinstatement of some Trump era policies. Violent crime is on the rise and the pandemic continues. The best Biden can do is offer increasingly shrill defenses of his flailing policies.
Rarely does a President fall so far, so fast, a victim of his own self-inflicted wounds and the inexorable pace of events. Less than eight months into his Presidency, Biden is besieged on almost every possible front and seems incapable of changing course. It’s like he’s in a sealed box, the walls are collapsing, and the box itself is sinking into a deep trench. The best he can do is offer increasingly shrill defenses of his and the country’s current predicament. Last Friday, he was forced to defend another dismal jobs report, right on the heels of a convoluted defense of the catastrophe in Afghanistan. Both speeches are illustrative of the idea that the world is moving too fast for him to keep up and events are spiraling out of his control.
“Today, we learned the economy created 235 new — thousand — new jobs in August. And the unemployment rate fell to 5.2 percent, the lowest it has been in 18 months,” Biden began his remarks on the jobs report, failing to mention that the 235,000 number was less than one third of the expectations for 720,000 new jobs, another major miss. This after a huge let down as recently as April, when economists projected 978,000 new jobs and the economy produced only 266,000. Incredibly, Biden continues to insist that what “we’re seeing is an economic recovery that is durable and strong.” “The Biden plan is working,” he said. “We’re getting results. America is on the move again,” before speciously claiming that wages were also up.
That’s nominally true, but so is inflation and it’s up far higher. The annual rate so far this year is 5.4%, the highest in 10 years and, even in 2011, it was only 3%. In between, it has never risen higher than 2.3%, and in two of the last ten years it was under 1%, in four it was under 2%. This is a startling increase, one most economists didn’t expect, nor have they fully come to grips with it, reduced to claiming that somehow inflation now is different than it was in the past. Barron’s reports that “Central Bankers Are Right: This Is Not Your Father’s Inflation,” noting that “Central bankers keep shrugging off the current spike in inflation as a temporary phenomenon, and they have some good reasons to do so.” They quote Catherine Mann, a former Citibank Chief Economist and now a member of Bank of England’s Monetary Policy Committee.
“History is an important guide,” she said last Monday, responding to a question on the similarities between the 1970s and today. “We should always pay attention to historical data. But I think we ought to pay attention to some historical institutional differences as well.” What are those differences? Ms. Mann believes wages and prices were more closely coupled together in the 1970’s, though she provides no evidence of that, nor did she mention that policy makers in the 1970’s didn’t believe the Great Stagflation, a toxic mix of a stagnant economy with massive inflation, was about to happen at the time. Rapid changes in exchange rates and oil prices back then that have no comparison to now, except oil prices are also spiking, dramatically. She also refers to the slope of something called the Phillips Curve which states that inflation and unemployment have a stable, but inverse relationship. In that regard, Ms. Mann believes the 1970s wages and labor market tightness had a “much stronger relationship in the 1970’s. Lastly, she’s convinced that companies today don’t have the power to raise prices that much and make them “stick.”
Ms. Mann might be right on some of these points or she might be wrong. Either way, consumers are paying more for everything in the short term, a lot more. Gasoline prices are at the highest level since 2014 and still climbing. Food is up as well; beef is expected to increase between 13% and 16%, pork between 19% and 20%, poultry between 20% and 23%. This is obvious to anyone who goes grocery shopping, but other industries have also been effected. Have you tried to buy a new car lately? Even common models like Nissan and Volkswagens are selling above list price, a situation unheard of in the past thirty years. Used cars are also selling higher than new cars. I wouldn’t have believed it if I didn’t see it for myself a couple of weeks ago.
The result is that real wages for American workers have fallen by 2% over 2020, remarkable when you consider that 2020 was the low point of the economy during the pandemic and millions were out of work. Where this goes from here is anyone’s guess. The economists could be correct that inflation will slow and return back to normal levels before serious damage is done, or they could be wrong as they have many times in the past. It was barely six months ago that they were touting a good times are here again message, expecting massive economic growth. Now, not so much.
In the meantime, the job market has certainly improved, at least for white people. President Biden touted the headline drop in the unemployment rate to 5.2%, but failed to mention that underlying this figure is an increase in the unemployment rate for blacks. Blacks were the only racial or ethnic group that saw an increase, and their unemployment rate now stands at a whopping 8.8%, levels that would normally be seen in a sharp recession. William Spriggs, an economist at Howard University said, “It screams at you. The unemployment rate for Blacks with associate degrees was higher than the unemployment rate for whites who were dropouts.”
While the long term ramifications of a consistently underperforming job market and over performing inflation remain to be seen, a key Senator President Biden needs to advance his agenda is taking note in the short term. West Virginia Senator Joe Manchin took to The Wall Street Journal last week to voice his opposition to the centerpiece of Biden’s future economic agenda, a $3.5 trillion spending bill that requires all fifty Democrats in Congress to support it via the reconciliation process. Senator Manchin said plainly that he couldn’t support spending at such a high level “without greater clarity about why Congress chooses to ignore the serious effects inflation and debt have on existing government programs.” Senator Manchin posed a basic question, “What should we fund, and what can we simply not afford?” In response, Yahoo News describes Democrats as “freaking out.” For example, Jonathan Chait, writing for The New York Intelligencer, claims Manchin has put Biden’s Presidency in “mortal danger,” concluding that, “For the first time, Biden is staring at the plausible vision of a failed presidency.”
Nor are the economy and Afghanistan the only issues plaguing Biden. The pandemic and the crisis on the border, plus rising inner city crime, continue to generate unflattering news and negatively affect people’s lives in countless ways.
In July, President Biden claimed an end to the pandemic was near, but since then the Delta variant has run amuck throughout the country and, while it has shown some sign of slowing in recent weeks, new variants are expected to hit this fall as the Administration fumbles with endless booster shots. The death count continues to grow, about 1,100 per day, and some models, including one from the influential University of Washington, are predicting close to 100,000 more deaths between now and the end of the year. While my opinion of models in general isn’t all that great, we’re likely looking at around 700,000 deaths this year on Joe Biden’s watch. This from a man who said he was going to “shut down” the virus. “I’m going to shut down the virus, not the country,” Biden said at a debate with Donald Trump, before accusing Trump of being responsible for the mess to begin with. “It’s his ineptitude that caused the country to have to shut down in large part.” One wonders who’s inept now.
July also saw another increase in border crossings, described by Homeland Security Secretary Alejandro Mayorkas as a “serious challenge” with “unprecedented” numbers of illegal aliens streaming in from Mexico. There were 212,672 people apprehended at the border in a single month, up from June, and up over five times from the year before. The number has increased every month since October 2020, going up even more dramatically after Biden took office and promised what he considers a more humane policy. The Supreme Court is now involved, ordering Biden to reinstate Trump’s successful Remain in Mexico policy, a major embarrassment for an Administration that has waged an all out war against anything the former President did at the border and a renewed policy that threatens to anger progressives. As described by Politico, “The possibility of resuming Migrant Protection Protocols or MPP — one of former President Donald Trump’s most contentious immigration policies — even while trying to soften it, has angered advocates who expected Biden to offer a more welcoming system for migrants.” The plan, apparently, is Remain in Mexico Lite. The world’s greatest satirists couldn’t make this up if they had a thousand years.
Afghanistan, of course, remains the most mortal potential threat. On September 2, the mainstream media tried desperately to move on with little to no coverage on the home page of CNN, The New York Times, and other establishment outlets, but so long as Americans remain there and the Taliban has inspired terrorists around the world, the story cannot be dismissed so easily. Reports over the weekend suggest that anywhere from 4-6 chartered flights believed to have Americans on board were held up in Afghanistan by the Taliban demanding concessions, essentially what seems to be a hostage situation. You know things are not going well when progressive Senator Richard Blumenthal lashes out on Twitter. “I have been deeply frustrated, even furious, at our government’s delay and inaction. There will be plenty of time to seek accountability for the inexcusable bureaucratic red tape that stranded so many of our Afghan allies.” There’s no word on whether or not Press Secretary Jen Psaki objects to his use of the word “stranded,” but obviously this is a situation that could literally explode at any moment.
It’s also one that, like so many of these others, Biden seems powerless to change. We have no assets on the ground in Afghanistan and the best we can do is cajole or bribe the Taliban. Coronavirus is mutating as viruses do and the more potent strains are less affected by the vaccine or the vaccine is losing its potency in general. The progressive left will not stop their demands for more spending and new government programs, regardless of the impact on the job market or inflation, nor will they give up their dreams of an open border. In short, there is no reset button for Biden to hit in case of emergency, at least not one that I can see.
How dire is the situation? Of course, the future remains to be seen, but even friendly sources like CNN’s resident propagandist, Stephen Collinson are concerned, very concerned. Last Friday, Mr. Collinson declared that “7 Months In, It’s the Worst of Times for Democrats.” In what may well be an early obituary for the Biden Presidency, he continues, “Both the premise and promise of Joe Biden’s presidency and a possibly brief Democratic grip on Washington are suddenly on the line, as the legacy of past electoral disappointments and harsh realities of power suddenly converge.” In other words, Biden’s in a box, the walls are closing in, and the whole thing is sinking fast. This is unprecedented so early into a Presidency in the modern era, and where we go over more than three years left in office is anybody’s guess.