The Economy is Alright: It’s the Government That Sucks

The current inflationary cycle began in early 2021, shortly after now President Joe Biden (D), took office. This period of excessive inflation was/is caused solely by the acts of the federal government. According to a June 7, 2023 article in Forbes:

“Two major periods of inflation (late 1970s – early 1980s and 2020-2023) were both preceded by surges in government spending and regulation that were assisted by cheap financing facilitated by the Federal Reserve. Government outlays grew by 15% (annual rate) in 1974-1975, and by twice that in 2020-2021 (Covid), compared to an average increase of 8% over the 1973-2023 period). During those periods, small firms uncharacteristically raised prices at an accelerated rate and at increased frequency (Chart 1).”

In this instance it was the massive deficit spending by Mr. Biden and the Congress, and accompanied by artificially low interest rates caused the fiscal policies of the Federal Reserve System under current Chairman Jerome Powell. For certain, virtually every economist not dependent on the federal government for funding agrees that it was the massive deficit spending and the shut down of America’s energy independence that were the proximate causes of the inflationary cycle.

What it was not caused by were the normal fluctuations of the market caused by supply and demand. And for that you can thank former President Donald Trump (R).*

Having said something positive about Mr. Trump, I find it necessary to pause for disclaimers for fear that some progressive will attempt suicide by jumping out the window of his mother’s basement, or some progressive congressional member will stumble during her dance video. I am not a fan of Mr. Trump as a person, but I am a huge fan of the policies he implemented as President of the United States. It wasn’t that Mr. Trump caused the massive resurgence of the economy, it was rather that as a successful businessman, he recognized and removed the government impediments to growth – namely high taxes, burdensome regulations and foreign energy dependency.

What Mr. Trump undertook stands in stark contrast to the actions of Mr. Biden and his principal economic advisors – Treasury Secretary Janet Yellen and Mr. Powell. Ms. Yellen lied to Congress and the American public when she assured us all that the inflation was merely transitory instead of addressing its very causes – deficit spending and shutting down energy independence. Mr Powell sat on his hands for over a year printing money to purchase the treasury notes from Ms. Yellen – apparently echoing the baloney that inflation was transitory. And then, instead of acknowledging the root causes of the inflationary cycle – deficit spending and the end of energy independence by Mr. Biden, he, like the one-trick pony he has proven to be, began a series of interest rate increases solely for the purposes of driving up unemployment among the working class and starving the market from a lack of wages. Look, it doesn’t take a genius to recognize the reality of what is happening before your very eyes. The inflationary cycle began almost immediately after Mr. Biden announced a return to the policies of former President Barack Obama (D) – burdensome regulations, higher taxes, and impediments to energy independence. But Mr. Biden did Mr. Obama one better by introducing the massive deficit spending under the guise of “economic stimulus” even though the coronavirus pandemic had ended at least six months before. But this deficit spending was different – it had nothing to do with non-recurring investments to stimulate the economy. Rather it focused on wage increases for public employee union members and commencement of new green programs; both of which were recurring expenses and thus baked into the budget process indefinitely. The cost of government increased substantially without any concurring economic benefit.

The current inflationary cycle began in about March of 2021 peaked at 9.1 percent in June of 2022. Since that point it has been dropping to the point where it has stagnated between four and five percent year over year. However, for working men and women it is not the year over year figures that are important but rather 1} the cumlative effects from beginning to the current date, and 2) the month over month inflation. With regard to the former, since the beginning of Mr. Biden’s mistakes inflation has caused working men and women an increase in living expenses at least 12.5 percent through January of 2023 and it has continued to increase each month since then. The value of the month over month inflation increases is valuable to understand where we are in the total cycle and since the first of the year the month over month figures have varied between 0.1 and 0.4 percent – averaging about 0.3 percent. It would appear that we will soon emerge from the inflationary cycle if Mr. Biden, Mr. Powell and Ms. Yellen quit fiddling with the economy. That means reduce deficit spending significantly and reopen our energy industry to recover energy independence.

But despite the low numbers for month over month inflation, Mr. Powell – the one-trick pony that he is – has decided that because the economy has remained relatively robust and employment levels and job openings remain high, that the Federal Reserve should again raise rates until modest employment increases reverses into significant unemployment increases. What a guy. After all the masses must suffer if there is to be progress. But in reality it is just the government making working men and women pay for the mistakes of the governing class. The fact of the matter is that the American economy has remained strong despite the best efforts of Mssers. Biden and Powell and Ms. Yellen. Intelligent people would recognize that and allow the economy to finish the job without further interference by the government class – unless of course that the actions of the government would be to remove current impediments to growth like those preventing energy independence. But they won’t and the feckless Congress will not withhold funds to force it to.

Today we have an incompetent president verging on senility. And his probable opponent is the former president who has yet to learn any form of humility or self-restraint. With the exception of Florida governor Ron DeSantis (R-FL) the lesser lights of both parties have failed to catch fire. Every day that passes suggests that a third party movement is necessary. However, the governing elites are intent on financing a “look alike” NO NAMES alternative while working men and women appear to embrace the mothers who began the efforts to take back the schools from the progressives and the perverts.

I resigned from the Republican Party in Arizona after the November, 2022, elections. I’m currently unaffiliated but leaning towards the moms. You may want to give that some consideration. You will sleep better at night and apologize less to others for your beliefs during the day.

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*You cannot discount the deficit spending occasioned by former President Donald Trump in an effort to restart the American economy although given the resiliency of the American economy even in the face of inflation and the countra-economic policies of Messrs. Biden and Powell one can legitimately argue that if the deficit spending had ended with the second stimulus package under Mr. Trump the inflationary problems of today would never occurred – at least never occurred at the level we currently face.