The Do-Nothing President
November of 1948 was the almost perfect analogy to today. Like today, the country was slipping into Recession. President Harry Truman was running in an uphill reelection battle. His opponent, Thomas Dewey, was the odds-on favorite to win the Presidency.
But, like today, there was unease in the country. People realized that things needed repair. The essential management role of the government was failing. Truman was able to pin that failure on a Republican Congress. A Congress that would rather endlessly debate the ideological issues of the moment than manage the day-to-day operation of the government. Truman called them the “Do Nothing Congress.”
Today, we have a President who is more concerned about a far-away vision of a Utopian future than the actual Administration of today’s government. President Biden tells us his grand plans to solve the climate crisis while today’s problem in energy is left untouched. In short, a “Do Nothing President” is a story of an ideological vision with no managerial capability.
At the same time, the country suffered from a lack of everything from semiconductors to paper products. We first saw this lack of managerial acumen when the Supply Chain debacle struck last year.
Biden sent Transportation Secretary Pete Buttigieg to Southern California to manage the jam-up of container ships unable to off-load their cargo in the ports of Los Angeles and Long Beach. Buttigieg looked around and decided he needed to go on maternity leave. For 60 days, he was MIA.
Biden, however, did nothing. Suggesting that men can also suffer “birth pangs” even though Secretary Pete adopted the child. It was a moment of ideology over management. For the President, managing the economy came in second to the greater goal of social progress.
And that is the hallmark of this Administration. Always take advantage of an opportunity to make an ideological point while rarely making essential managerial decisions.
The most egregious of all these instances was the reckless decision to “sanction” Russian oil and gas. Apparently, on the spur of the moment, Biden issued the proclamation halting one-tenth of America’s petroleum supply.
It may have seemed like an ideologic windfall, attacking two of Biden’s nemeses throwing sand in the eye of Vladimir Putin by taking away a significant market for Russian petrol while also making gasoline dramatically more expensive for Americans. Americans who, after all, should drive electric, not gas-powered automobiles.
An ideological victory. But a managerial failure when the price of gasoline skyrocketed and ignited the worst bout of inflation in 40 years.
The President talks a good game, one that certainly excited his constituents. But he lacks the real-world experience to put these noble-sounding visions into reality. More often than not, Biden’s Utopian visions have led to real-world disaster.
The vision of a stimulus check for everyone, perhaps a noble idea when first conceived, resulted in a 500% expansion of the money supply and was the other dimension that brought about this run-away inflation. Economists tell us that many more dollars chasing the same amount of goods and services are the recipe for inflation.
Opening doors for needy emigrants may have been the vision. But curtailing the Trump border wall has resulted in a border area crime wave like the country has never seen before. A disaster for all of the Southern Border states.
Promoting electric everything, from automobiles to battle tanks, might be the vision. But the reality is that he has drained the Strategic Petroleum Reserve nearly dry. The latest estimate is that the SPR will be empty in the weeks following the midterm election.
New England faces winter with just one-third of its regular supply of Heating Oil. For many, Heating Oil is their only choice for staying warm.
East Coast Diesel supplies are just one-quarter the level they should be, with the genuine possibility of diesel shortage along the entire East Coast of the United States.
For the North West, Biden’s vision of free speech and racial equality resulted in a series of the most horrific riots since the 1960s, as Antifa and Black Lives Matter were allowed to run wild. Intimidating police and citizens alike. And they were creating a situation in Seattle and Portland where entire city sections became utterly lawless.
But our “do-nothing” President did nothing.
That’s the heart of the matter. There is a mountainous divide between the President’s visions and the reality of managing the world’s most dynamic country.
Today, just like in 1948, we face economic hardship. Shortages of essential products are driving the almost inevitable eventuality of the Economic Recession.
The most vital shortages are in food and energy. It’s hard to convince Americans that their number one issue should be the 20-year impact of Climate Change when the shelves at the local grocery are emptying or the cost of gasoline to fill up the car is half a day’s wages.
Save your visions, Mr. President. Today, we have a nation to manage.
Econ Briefs
I’ll be watching the Personal Consumption Expenditures Price Index this morning. I know it’s a mouthful, but this is the Federal Reserve’s favorite measure of inflation. And it most accurately reflects inflation at the personal or consumer level.
If today’s reading comes in as expected, today’s Consumption reading on inflation will be two total percentage points higher. It’s also likely to show that inflation is much hotter than yesterday’s GDP Price Index. The difference in these two readings on inflation is gigantic and may indicate that we’ve got some issues in our economic reporting.
Let’s wait and see what today’s PCE Price Index reports. Remember to match yesterday; it should be in the low 4%.
Many economic reports today, as we come to the end of October.
Want to borrow money, try Japan, where the Bank of Japan just renewed its negative interest rate policy. BOJ Interest Rate at minus one basis point.
Moving over to Europe, we’ve had GDP reports for France, Germany, and Spain. All show minimal economic growth of less than 1%. An indication that European Economic Growth is barely above recession levels.
Turning to the US, a whole slate of reports, beginning with personal income and spending, followed by the Michigan Survey of Consumer Sentiment.
Then two very significant reports: Employment costs, benefits, and salary. Here is an essential reading on continuing inflation. Employers will have to provide the cost of living increases for both wages and benefits. These wage hikes are likely to begin the vicious wage-price spiral that we’ve seen before. I’m looking for a big jump in Employment costs, especially following last week’s announcement that Social Security was increasing its benefits.
Highlighting today’s earnings report is energy, with the nation’s two largest oil companies: Exxon Mobil and Chevron, and Florida Utility Nextera, all receiving a positive reception this morning on Wall Street.
On the negative side has been Davita, one of the nation’s largest dialysis service companies. Their stock is trading much lower on their earnings.
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