OPINION:
It’s obvious and now official: The United States economy is mired in a recession. Like a jetliner that has lost power, the productive forces that drive the nation have sputtered into a bone-jarring landing. Dusting themselves off, Americans can thank President Biden and his fellow Democrats for fueling a flight toward misfortune.
The Bureau of Economic Analysis reported Thursday that the U.S. economy contracted at a rate of 0.9% during the second quarter. Added to a first-quarter GDP decline of 1.6%, the trend line constitutes the classic definition of recession.
Commonsense Americans who can rattle off the latest price of a quart of milk or a gallon of gas from memory already know what the pointy heads in Washington have just discovered. With annual wages growth averaging 4% but June inflation running at 9.1%, they feel their wallets getting lighter by the day. The hurt is captured by the so-called Misery Index, which in May stood at 12.2% — higher than at any point during the recession of 2007-09.
Still, Biden officials shake their heads in disbelief and tell the public not to believe their lyin’ eyes. Treasury Secretary Janet Yellen, for one, has said the economy is simply experiencing “a slowdown” rather than a recession. By any description, the economy is undeniably faltering.
Reasons are abundant in an era of global economic interdependence, but one cause stands out in a glaring fashion: Mr. Biden’s bid to choke off the affordable, carbon-based fossil fuels on which the economy depends and replace them with low-carbon alternatives. By canceling oil and natural gas wells and pipelines, he has effectively limited the supply of fuel and raised the cost of commerce.
The president’s administration has claimed credit for reducing the average price of gas by 60 cents a gallon over the past month, but it is largely the result of siphoning off fuel from the nation’s emergency Strategic Petroleum Reserve. U.S. oil production actually fell by 1.7% during the first half of July, according to the U.S. Energy Information Administration. A boost in oil imports and refinery output has helped to lessen the pain at the pump caused by the president’s policies.
The Democrat-led U.S. Congress shares blame for the recessionary spiral owing to its role in shoveling trillions of dollars into an overheated post-pandemic economy. If passed, Democrats’ newly unveiled Inflation Reduction Act of 2022, which calls for an additional $700 billion in government spending, is likely to fuel inflation rather than reduce it.
So, too, the Federal Reserve shares fault for its failure to check soaring inflation with higher interest rates. Its 0.75% rate hike on Wednesday, coming atop three earlier increases, is only now beginning to cool the demand for new borrowing. The slowdown has already begun to impact the job market, with Ford Motor Co. announcing the layoffs of 8,000 workers in the coming weeks.
Americans staring at their wreck of an economy and wondering what it will take to get it airborne again can be forgiven for muttering, “Thanks, ‘Brandon’ Biden. Thanks a lot.”
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