Just weeks before he was repudiated in a landslide in 1980, with inflation at nearly 13 percent, mortgage interest rates approaching 14 percent, and unemployment at 7.5 percent, President Jimmy Carter—likely the worst president of the 20th century—lectured an assemblage of reporters at the National Press Club about economic policy—and, remarkably, warned against practicing measures that resemble today’s “Bidenomics.”
Of course, President Carter, infamously in consistent denial of his failures, was warning against the proposed across-the-board tax cuts of the opponent who was about to trounce him, Ronald Reagan (perhaps the greatest president of the 20th century). But after spending trillions of dollars for political purposes, especially Green New Deal extravaganzas, the Biden administration is propagandizing that its defiance of what President Carter claimed to have learned is reenergizing the U.S. economy.
At a wind turbine factory in Albuquerque, New Mexico, and an electric vehicle charger firm in Milwaukee this month, Biden touted suggestions from Goldman Sachs and Morgan Stanley that his massive spending is “leading to a boom in manufacturing investment.” While he was at it, he injected, tellingly, that “40 years of trickle-down economic policy limited the dream to those at the top.”
Presumably, the “40 years” to which he referred spanned from presidents Ronald Reagan to George W. Bush. Once again, in today’s radicalized Democratic Party, even two-term President Bill Clinton is considered little more than a puppet of the evil supply-siders who believe the best thing for those not “at the top” is the ability to get the job of their choice.
As the Heritage Foundation’s E.J. Antoni and Peter St. Onge report, “Surveys conducted by the regional Federal Reserve banks show a slowdown in manufacturing, with many showing the industry outright contracting,” with both the Philadelphia and New York Fed banks detailing “some of the fastest contractions on record” under President Biden, “rivaling those logged with initial pandemic-era lockdowns and in the aftermath of the 9/11 terrorist attacks.”
The Philadelphia Fed’s latest survey concludes that manufacturing firms “continued to indicate overall increases in prices and an overall decline in employment. The survey’s future indexes suggest less widespread expectations for growth over the next six months.”
The New York Fed survey stated: “New orders and shipments fell significantly. ... Manufacturing activity declined in New York State, according to the August survey. The general business conditions index fell 20 points to -19.0, its first negative reading since May. [Sixteen percent of respondents reported that conditions had improved over the month, while 35% reported that conditions had worsened. The new orders index fell 23 points to -19.9,and the shipments index dropped 26 points to -12.3, pointing to a moderate decline in orders and shipments.]”
Maybe President Biden really meant to say not “boom” but manufacturing gloom? As Messrs. Antoni and St. Onge point out: “For most of the last year, several purchasing manager indexes have signaled a contraction in the sector. Meanwhile, both industrial production and the percentage of factory capacity being used have been zigzagging down since last September. Total factory output has declined for the last four months.”
Then there are the disturbing warning signs in the economy, with key retailers such as Dick’s Sporting Goods and Macy’s suffering weaker quarterly earnings and little if any improvement expected for the rest of the year. Macy’s sales are down 8 percent from a year ago, with the company experiencing a net loss.
In a Bloomberg survey last month of 1,000 Americans pulling in $175,000 or more, some 25 percent envisioned that they wouldn’t end up in better financial condition than their parents. And many want to move from their expensive urban-area locales to cheaper parts of America.
Sales of homes fell in July except in the West, and sales fell the most in the high-tax, high-cost-of-living Northeast, where they were down by nearly 6 percent. Overall, there were nearly 15 percent fewer homes up for sale than there were a year ago.
Standard & Poor’s downgraded Associated Banc-Corp and Valley National Bancorp based on funding risks and heavy reliance on brokered deposits, as well as UMB Financial Corp. and Comerica Bank based on deposit outflows and higher interest rates; and S&P cut KeyCorp’s ratings over its profitability.
Not only did this hit those banks’ stocks, but the ripple effect lowered the shares of JPMorgan Chase and Bank of America by nearly 2 percent, while Citigroup, Goldman Sachs, Morgan Stanley, and Wells Fargo all sustained stock declines of about 1 percent.
Those actions followed Moody’s lowering its ratings on 10 banks and warning of possible downgrades for some of the nation’s larger lenders. All this is a direct result of the Federal Reserve’s continued efforts to use higher interbank interest rates to fight a level of inflation unseen for 40 years before President Biden’s arrival in the White House.
With consumers clutching their wallets, the financially comfortable feeling pinched, and banks shaky, brandishing an imaginary manufacturing bonanza and blasting pro-growth policies that have a documented track record of success is a curious way for a president to seek reelection.
