Biden’s Folly: Where Political Ego and Policy Collide

President Joe Biden speaks during a news conference in the East Room of the White House in Washington on Jan. 19, 2022. Susan Walsh/AP Photo

Commentary

The world is at war.

Fortunately not the kind with bombs and bullets that level cities and kill millions. But one almost as bad. And no one in charge seems to care.

It’s a war against an enemy that can’t be won. One in which the combatants have staked everything on victory.

Like all wars, there will be painful economic fallout that leaves a scar on the global economy.

Biden’s Big Boast

Throughout the 2020 election campaign, then-candidate Joe Biden promised that he would crush COVID-19.

We’ve all heard the promise in some form or another over and over: “I'll put in place a plan to deal with this pandemic responsibly, I’ve already done it. I’m not going to shut down the country, I’m not going to shut down the economy, but I’m going to shut down the virus”

In the meantime the virus did what viruses do—it continued to mutate and spread.

There was, throughout all of Washington, a grand plan to beat the virus. Biden likened it to a war…

“I know we can and we will beat this virus. America is not going to lose this war. You will get your lives back. Life is going to return to normal. That will happen. This will not last forever.”

By doing that, he drew a line in the sand—he made victory paramount. Anything but complete and total victory would be a humiliation.

But as the Omicron variant took hold, they went back to the same old playbook.

While federal vaccine mandates have failed so far, draconian restrictions over testing and quarantining have been put in place continuing to damage businesses throughout the country.

In his quest to put a “W” on the board, he continues to threaten economic growth at a time when the country cannot afford it.

Bigger Ego—Bigger Problems

China, the original launch pad for this virus, has also adopted the zero-COVID, crush-the-virus playbook.

The Wall Street Journal reported that the country closed multiple land-based shipping checkpoints after a single case of Omicron was diagnosed. Naturally this put a greater stress on the entries that remained open.

Truck drivers from bordering countries Vietnam, Laos, and Burma have been stuck for weeks. And clearing a backlog that has been building for weeks won’t happen overnight.

Shipping ports like Shenzhen, Shanghai, Tianjin, and Dalian have also slowed in the face of increased restrictions. In the Chinese city of Ningbo, the world’s third busiest port, quarantines have slowed shipping dramatically. A one-week delay in goods shipped could affect $4 billion of trade.

A world economy starved for goods produced in China saw outbound shipments surge 30 percent to nearly $3.4 trillion last year alone. That’s all being squeezed thanks to the regime’s response to COVID-19.

A Treaty That Will Likely Never Come

One might wonder why? Why would China continue to pursue policies that create this kind of economic carnage?

Same reason the United States does. This is Chinese leader Xi Jinping’s ego trip to prove China’s superiority by wiping out the virus in his country.

It’s a fool’s errand. There will never be an elimination of COVID-related variants—viruses mutate. It’s what they do.

Shutting down borders will only continue to cripple the global supply chain and continue to fuel inflationary pressures. As China and the United States go to war against a rapidly weakening virus, they’re destroying the global economy.

If Biden wants to fix the supply chain, he’d better have a change of heart over COVID-19 and convince his “old friend” Xi to do the same.

Unfortunately a peace treaty with the virus is highly unlikely, so the global economy will continue to struggle. That means any recession-proof plays, like the SPDR Gold Shares (GLD) and the Vanguard Utilities Index Fund (VPU) will be investments worth looking at.