No doubt about it, the economic news in recent weeks has been relentlessly negative. Indicator after indicator shows activity plunging sharply in key parts of the economy. Now, a widely followed indicator signals economic growth is likely to be zero in the current quarter, after the first quarter’s “unexpected” 1.4% decline.
Buckle up, looks like we’re entering a recession, folks.
Let’s review just some of the economic carnage of recent days:
- The Fed raised interest rates by 3/4 of a percentage point on Wednesday, the largest hike since 1994, as the central bank desperately tries to rein in our near-9% inflation rate.
- Mortgage rates surged above 6%, the highest since 2008, a level that is likely to tank home sales and hit consumers’ pocketbooks hard as adjustable-rate mortgages move upward along with interest rates.
- Producer prices soared at a 10.8% rate in May, an ominous sign of higher inflation for consumers down the road. That followed last week’s 8.6% yearly CPI number, the highest since 1981.
- Retail sales fell 0.3% in May, but jumped 8.1% from a year earlier. A good sign? Hardly. Adjusted for CPI inflation, growth was minus 0.5%.
- Small business optimism is its lowest ever, the National Federation of Independent Business said. This is key because small businesses are the No. 1 employer in America, usually first to hire in good times and first to fire in a slump.
- “Meanwhile,” AP reports, “the national average price at the pump reached $5.01 per gallon on Tuesday, up from $4.45 a month ago, and surging more than 60% in one year.”
- And before Wednesday, when the stock market rallied in relief that the Fed finally recognized the seriousness of the inflation problem, all of the post-Trump stock market gains had been erased.
- The Atlanta Fed’s GDPNow indicator, a kind of running tab of GDP data, fell to zero on Wednesday. A rule of thumb says two or more quarters of zero or negative growth equals a recession. By that standard, the Biden recession is here.
To sum it all up, “Between bad fiscal policy, bad monetary policy, and terrible energy policy, this is the witch’s brew that created this record-high inflation,” former Trump economic adviser Larry Kudlow told Fox Business’ Stuart Varney on Wednesday.
Joe Biden let it happen by following the awful advice of his White House advisers and the far-left Clown College he calls a Cabinet, possibly the most inept collection of political ideologues in our nation’s history. And that’s saying a lot.
Blame Biden for this economic debacle. He rages at others for his problems, but it took him a mere year and a half to dismantle a healthy, growing, noninflationary economy that already had rebounded smartly from the COVID lockdowns and make it a shambles.
You might think such obvious policy failure would lead to a pivot of some sort. But no. Biden has instead hit the hustings to once again rant that none of this is his fault, and to double down on the very policies that created this mess.
On Tuesday, Biden told union members a series of whoppers about the economy, such as, “Since I took office, with your help, families are carrying less debt nationwide. They have more savings nationwide.” Not true.
He also assailed critics for their “lies about reckless spending.” But even his own party’s leading economists don’t agree. They warned him repeatedly about excessive federal expenditures, but he didn’t heed them. He’s even absurdly claimed that Democrats’ rabid spending will “cut” $1.6 trillion from deficits this year, a claim no reputable economist takes seriously.
Oh, and he blamed Republicans, who control nothing in this government, for inf…