OPINION:
President Biden has repeatedly promised he won’t raise taxes on anybody making less than $400,000 annually.
Yet his tax and spend agenda is costing families in another way — through higher consumer prices.
Gas prices have been steadily climbing since Mr. Biden came into office, with the national average topping $2.99 today, compared to $1.85 a year ago, according to AAA. Right now, the closure of the top U.S. fuel pipeline because of a cyberattack is contributing to the rise, but GasBuddy analyst Patrick De Haan argued last month the Biden administration’s “limitations on new drilling could eventually become an issue.”
“The Biden administration is not anywhere near as friendly with the oil and gas sector” as the Trump administration, he told Fox Business, noting that “motorists are going to be feeling the consequences of such a policy.”
Mr. Biden has embraced the progressive “Green New Deal,” temporarily suspending oil and gas permits on federal lands and waters and canceling the Keystone XL oil pipeline project. His $2.3 trillion infrastructure proposal is aimed at ending the fossil fuel industry altogether, which will lead to even higher prices at the pump.
Sticker costs on common grocery store items are also increasing. Everything from processed meat to dishwashing products have risen by double-digit percentages from a year ago, according to NielsenIQ.
Kellogg Co., the maker of Frosted Flakes, Cheez-Its and Pringles, said last week higher costs for its raw ingredients, labor and shipping are forcing it to raise the sticker prices on its brands.
Restaurants, many of which are just now reopening, are also feeling the pinch — and passing it onto their patrons. A chicken shortage has led to prices more than doubling, and eateries such as KFC, Wingstop and Buffalo Wild Wings are running out of or limiting sales of chicken tenders, filets and wings.
The restauranters blame the shortage on the chicken suppliers, who say they can’t increase production because they lack the workers to do so.
The cost of lumber has also skyrocketed a staggering sevenfold from a low in April 2020. New homes now cost an extra $36,000 because of the shortage.
Lumber mills closed down last spring because of the pandemic, expecting demand to drop. However, many Americans used the lockdown for home improvements and demand never faltered. Sawmills (again) blame a labor shortage as the reason they can’t ramp up demand.
As a result, home builders have been ramping up their prices — but they can’t keep doing this forever.
“This can only last for so long before affordability becomes pinched and demand pauses,” John Lovallo, lead home builders analyst at Bank of America, told CNN in an email.
The median home price across America is now $329,100, the highest it’s been since the National Association of Realtors began tracking prices in 1999.
Yet the Biden administration keeps telling us, there’s nothing to see here, that inflationary pressures due to supply-chain problems are only temporary.
It’s hard to believe this is true.
First, many suppliers say the reason for the shortage is because they lack the labor to ramp up production. Why do they lack the labor? Well, because the Biden administration is paying Americans more to sit home and not find a job through enhanced unemployment benefits.
The Biden administration has been indignant about the problem, refusing to believe it’s their policy that’s leading to higher unemployment and have committed to continue these benefits through September. That’s bad news for businesses struggling to find workers.
As a result, many will be forced to keep sections of their restaurant closed, forgo bids on new work, and deliver supplies more slowly — all of which reduces the pace of our economic recovery.
Big corporations will pay their workers more to reenter the workplace, but small businesses that have already felt the pinch from the lockdowns may not be able to do so, putting further strain on their operations.
So the big will get bigger, the small, smaller and economic inequities will rise.
The Biden administration’s answer to this is more federal spending. It’s a dangerous proposal, for without a healthier labor participation rate, there’s no guarantee our economy can absorb it — leading to further price increases because of shortages.
The bubble is going to pop, and something needs to give, or the hyper-inflation monster cometh. Heck, for anyone putting gas in their car, buying groceries for their family, or building and purchasing a new home, it’s already here.
Please read our comment policy before commenting.