Freedom Line Blog

Are you better off today than you were four years ago?

If you happen to be someone who ever purchases gasoline, the answer is no on that front, as our friends at the Unleash Prosperity Hotline highlight.  The Biden/Harris administration and its cheerleaders frequently trumpet that inflation and prices for items like gasoline are down significantly from their recent highs, what they rarely bother to tell you is that they’re still up significantly from when Biden and Harris took over:

The Biden/Harris Effect

In their increasingly desperate effort to resuscitate Joe Biden’s sagging campaign, his defenders claim that stock markets vindicate “Bidenomics” (not that they call it that anymore, of course) vis-a-vis former President Donald Trump.  Well, our friends at the Committee to Unleash Prosperity show what happens when you adjust stock performance to account for out-of-control inflation under Biden:

“Biden Boom?” Not So Much.

Joe Biden tells Americans that he’s helping them by building “from the bottom up and the middle out.”  But the numbers don’t lie, and the ugly reality is that he’s only dragging us all toward the bottom.  Throughout his presidency, wage gains (green) have been consistently exceeded by inflation (blue), meaning loss in real earnings (red):

Bidenomics Means Lost Earnings

Consumer spending accounts for approximately two-thirds of the U.S. economy, so Joe Biden’s crushing impact on consumer confidence helps resolve his apologists’ confusion over Biden’s economic disapproval.  After inheriting an economy rebounding from the Covid shock, Biden’s policies quickly drove consumer confidence back downward, where it continues to stagnate.  No wonder he finds himself in such electoral hot water.

Bidenomics Crushes Consumer Confidence

As Joe Biden attempts to paint a rosy picture despite Americans’ real-world experiences, the truth is that wages still haven’t caught up to inflation during his presidency:

Inflation Outpaces Wages Under Biden

Following up on our latest Liberty Update commentary highlighting the deepening disaster that is the Biden Administration healthcare and pharmaceutical policy, The Wall Street Journal notes that prescription drug prices have actually ACCELERATED their price inflation since Biden’s so-called “Inflation Reduction Act”:

Prescription drug prices increased by 2% during the Trump Presidency owing to greater generic competition, yet they’ve increased 5.5% so far under Mr. Biden. In November they rose at an annual rate of nearly 6%. Has the White House considered that the reason Americans don’t believe that the President’s policies have helped them is because they haven’t?”

The Biden Administration needs to correct course for the benefit of Americans, not double down.  But time is running out.

In our latest Liberty Update we highlight how replacing Joe Biden atop the Democrats’ 2024 ticket wouldn’t substantively change the left’s “Bidenomics” economic agenda that is the main voter concern driving his unpopularity.  In noting Biden’s strange and stubborn habit of whispering into the microphone that “It’s working” when promoting that failing agenda, we noted that poverty just surged at a record rate last year, according to the federal government itself.  From our friend Stephen Moore, here’s a helpful visual placing it in stark relief:

Bidenomics Is “Working?”

CFIF recently marked the ignominious one-year anniversary of the Biden Administration’s misnamed “Inflation Reduction Act” (IRA), whose title even Biden himself admitted was mistaken.

We noted how, as a result of the IRA, drug shortages have already reached record highs, increasing by 30% between 2021 and 2022 alone, according to a report in March from the Senate Committee on Homeland Security and Governmental Affairs.  Another report from the American Cancer Society also sounded the alarm on emerging drug shortages, caused in part by drug price control policies.  Thus, just one year in, drug shortages have reached record levels under the looming threat of drug price controls, weaker intellectual property protections and regulatory browbeating.

This week, as reported by Politico, the same Biden Administration that called inflation “transitory” and insists in the face of public blowback that “Bidenomics” is somehow succeeding announced that it will soon release the first ten prescription drugs selected for its destructive price control scheme:

President Joe Biden has sought to sell health policies like the new Medicare negotiation program as part of a broader ‘Bidenomics’ agenda set to underpin his reelection campaign.  The drug pricing push, he has argued, will help counter inflation and boost the economy by slashing the amount Americans have to shell out each year for critical medicines, although prices negotiated on the first set of drugs won’t take effect until 2026.”

Given Biden’s shoddy record for accuracy and competence so far, Americans will be forgiven for their skepticism.  As we noted, the consequence of price controls will be shortages and less innovation, which we’re already witnessing.  Americans aren’t buying this “Bidenomics” pitch, and will pay a heavy price unless and until these dangerous drug price controls are reversed.

Make of this what you will, as Joe Biden pitches “Bidenomics” in his reelection effort and maligns the alleged “trickle down” economic record of his predecessor:

Bidenomics

Posted without additional commentary, per the latest Labor Department data, here’s an illustration from economist Steve Moore of the immediate and ongoing pay cut that Americans have experienced since Joe Biden became president:

The Biden Pay Cut

We recently referenced how Joe Biden seeks a 2024 job extension from American voters even while he has presided over a record 24 consecutive months of earnings declines (wages minus inflation), and our friend Stephen Moore offers an instructive illustration of the point:

Record Biden Earnings Bust

While Joe Biden simply repeats his claims to be building an economy “from the bottom up and the middle out,” and strangely brags about slight reductions in the rate of inflation that shot upward under him, our friend Stephen Moore provides yet another handy visual on how inflation has outpaced wage gains since Biden entered the White House:

Joe Biden the Wage Slayer

Continuing our efforts to warn against the perils of federal, state, and local efforts to target short-term lenders while working families face increasing economic headwinds, Stacy Watson came out with a fantastic new commentary entitled “What’s the Fed Doing to Fight ‘She-Flation?”  She highlights the ways in which inflation can hit women particularly hard, and cautions against counterproductive legislation and regulation that will only make access to financing more difficult:

While the federal government is acting to tame inflation through legislation and monetary policy, there is more that can be done to ease the burdens of she-flation. For one, the government should increase access to liquidity for small businesses. That would incentivize and enable women to become entrepreneurs, seize control of their destinies, and, it is hoped, increase earning potential. Encouraging banks to partner with technology companies that serve underbanked consumers would open access to credit for many single moms and entrepreneurial women.   

Lawmakers should also take off the table legislation that would remove access to personal and small business credit, such as the recently reintroduced “Safe Lending Act.” Although the bill purports to protect consumers from deceptive lending practices, what it would actually do is gut access to credit for working-class families, minorities, and women.”

Bravo.

We at CFIF often warn how attempts at “drug price controls” will only succeed in killing lifesaving drug innovation, in which the U.S. leads the world without a close second.

Joe Biden’s so-called “Inflation Reduction Act” constitutes a perfect illustration, and in a Wall Street Journal piece entitled “The Inflation Reduction Act Is Already Killing Potential Cures,” USC Schaeffer Center for Health Policy & Economics fellow Joe Grogan shows how “we’re already getting signs of the damage”:

One poorly crafted provision is driving companies away from research into treating rare diseases.  In its Oct. 27 earnings statement, Alnylam announced it is suspending development of a treatment for Stargardt disease, a rare eye disorder, because of the company’s need ‘to evaluate impact of the Inflation Reduction Act.’  Alnylam’s decision turns on a provision in the Democrats’ bill that exempts from price-setting negotiations drugs that treat only one rare disease.  The company’s drug is currently marketed as treating only amyloidosis, and thus is exempt from Medicare’s price setting.  If Alnylam proceeded with research into treating Stargardt, it would lose its exemption.”

And that’s not even the end of it.  Earlier this week, Eli Lilly announced termination of a blood cancer drug because, “In light of the Inflation Reduction Act, this program no longer met our threshold for continued investment.”

Mr. Grogan proceeds to offer a must-read primer on how and why this is happening, then concludes by admonishing the next Congress convening in January to abandon this instant disaster and promote innovation instead of cheap Biden Administration talking point schemes:

The Democrats may have achieved a short-term talking point for the midterm elections, but in the long term this partisan healthcare bill will prevent patients from receiving innovative, lifesaving treatments.  A new Congress would serve Americans well by replacing the Inflation Reduction Act with an approach that recognizes the need for economic incentives to bring new treatments to patients.”

Good advice.

Joe Biden has leased fewer acres for oil and gas drilling than any other president.  Don’t dare suggest that he bears any responsibility for skyrocketing energy prices during his presidency, though.

Biden Administration’s War on Drilling

As inflation continues to spiral upward at multi-decade highs and with the U.S. economy now in recession, maintaining an “all of the above” array of lending options for American consumers becomes more and more important.  Unfortunately, activist groups like the “National Consumer Law Center” aim to do the opposite and limit rather than expand consumer options.

For a sense of consumers’ growing desperation, consider a Federal Reserve report on exploding credit card debt, as highlighted by Steve Cortes:

How have consumers dealt with these skyrocketing prices? The simple answer, unfortunately: via credit cards, particularly for working-class households. Just last week, the Federal Reserve Bank of New York issued a damning report on this credit binge for consumers, into a pronounced economic slowdown.

Total consumer debt rose a staggering $40 billion in June, far surpassing Wall Street expectations of a $25 billion increase…

A huge portion of this new debt flows from costly, risky credit card use. In fact, for the April-June second quarter of 2022, total credit card debt rose a staggering $46 billion, the biggest jump in 20 years. Americans pile into new accounts to accomplish this borrowing, opening up a whopping 233 million new cards during that second quarter, the most new cards since 2008. Such comparisons to the Great Recession should worry everyone.”

Additionally, credit cards aren’t always a viable option for many Americans, and traditional bank loans aren’t always an option due to small amounts needed for short-term emergencies.  Whereas higher-income Americans with stronger credit history can borrow from banks, utilize assets they possess as leverage or use their savings, consumers with lower credit scores or lacking sufficient savings cannot.  Indeed, according to the Fair Isaac Corporation, some 46% of consumers possess credit scores below 700, meaning that traditional bank loans aren’t possible for them.

In such circumstances, struggling Americans can access the money they need for the short-term via consumer finance loans.

Groups like the National Consumer Law Center (NCLC), however, want to limit the availability of such options, which they falsely characterize as some sort of scheme “to snare consumers into predatory loans for auto repairs, tires, furniture, and even pets.”

In reality, however, the unintended consequence of efforts like that of the NCLC will be to drive temporarily strapped consumers to seek out illegal loansharks, suffer overdrafts, or simply be unable to cover their temporary costs.  As none other than the World Bank found, such limitations lead to “increases in non-interest fees and commissions; reduced price transparency; lower number of institutions and reduced branch density; and adverse impacts on bank profitability, in addition to the lack of access for smaller and riskier borrowers.”

That doesn’t help the people whom groups like the NCLC claim to protect, it hurts them.  Accordingly, American consumers and elected leaders should recognize the peril that NCLC and similar groups present.  Their efforts would only make consumer lending more difficult, more dangerous and more expensive.

As Senators Joe Manchin (D – West Virginia) and Kyrsten Sinema (D – Arizona) betray their “moderate” charade and join Senate Majority Leader Chuck Schumer’s (D – New York) latest tax-and-spend monstrosity, we’ve highlighted the preposterousness of the claim that imposing drug price controls will in any way address out-of-control inflation.  Price controls will kill innovation, but do nothing to reduce inflation, because prescription drug prices simply aren’t the problem.  Once again, economist Steve Moore offers a handy illustration of that truth:

Prescription Drug Costs Aren’t the Problem

While Joe Biden attempts to blame a shifting array of scapegoats for inflation, the simple numbers demonstrate the unmistakable truth.  Consumer prices began skyrocketing upon Biden’s inauguration in January 2021, and wage gains plummeted toward an immediate deficit relative to inflation.  During the Trump presidency, wages consistently exceeded inflation, only rarely even coming in even, let alone in negative territory.  Economist Stephen Moore illustrates the reality unambiguously:

We recently sounded the alarm on how the Biden Administration, political left and crony capitalist big business interests are coalescing on an idea almost too bizarre to be real:  heaping new carbon taxes on traditional energy sources in order to “reduce energy costs.”  We subsequently illustrated one of the main reasons for that novel ploy:  so-called “green” energy sources are non-competitive without government intervention to artificially make more efficient fossil fuel sources more costly.  Courtesy of economist Stephen Moore, we have another biting illustration of that dynamic:

Taxpayers Power “Green” EV Initiatives

There’s nothing wrong with electric vehicles, and in fact they offer a promising future technology.  But that should occur via market forces and consumer choice, not artificial government costs and subsidies paid by strapped taxpayers.

As Americans express growing alarm over consumer price inflation that commenced in January 2021 under the Biden Administration and Pelosi/Schumer Congress (see here), it’s worth highlighting how critical broadband access on which our economy increasingly depends has diverged from that trend.  It’s also worth highlighting that stems from the fact that internet service has so far escaped Biden Administration regulatory attempts to reverse free-market progress achieved under former Federal Communications Commission (FCC) Chairman Ajit Pai: