Mr. Puzder is a former CEO of CKE Restaurants, chairman of 2ndVote Value Investments, Inc., and a senior fellow at the America First Pol...
Mr. Puzder is a former CEO of CKE Restaurants, chairman of 2ndVote Value Investments, Inc., and a senior fellow at the America First Policy Institute.
If one listened to President Joe Biden's speech on Thursday, they may come away with the idea that there are two villains behind the severe economic pain that Americans are experiencing.
According to Biden, it is the fault of Vladimir Putin and American oil companies that gas prices are at record highs.
'I know how much it hurts…' the president said. '[Some U.S. oil companies] don't want to increase supply because Putin's price hike means higher profits.'
His point is: Blame them. Not me.
He sounds like a broken record.
But put aside for a moment the president's disturbing rhetorical lumping together of a murderous tyrant and US executives – the bottom line is that what the president said is terribly misleading.
Runaway inflation – much more than just gas prices alone – is depleting the savings of hard-working Americans.
And we can now say that Biden's massive government spending – not war in Ukraine or greedy US corporations – is largely responsible for inflation.
A new San Francisco Federal Reserve study released this week contains a chart showing that U.S. inflation spiked in early 2021 at almost precisely the same moment that Biden signed his massive $1.9 trillion Covid 'relief' bill.
U.S. inflation exploded from below 2% in early 2021 to nearly 5% at the end of 2021
The study, titled 'Why Is U.S. Inflation Higher than in Other Countries?' compares inflation in the U.S. to inflation in other Organization for Economic Cooperation and Development (OECD) countries.
You can literally see the inflationary impact of Biden's $1.9 trillion debacle.
U.S. inflation exploded from below 2% in early 2021 to nearly 5% at the end of 2021, unlike the average in Canada, Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden, and the U.K. (Shown on the chart as the red shaded area).
Average inflation in the OECD sample increased from around 1% to 2.5% by the end of 2021.
But the study concluded that Biden's Covid relief may have raised U.S. inflation by '3 percentage points by the end of 2021.'
So while the average price of regular gas has increased nearly 20% since the Russia invasion of Ukraine on February 24, 2022 -- the current inflation surge was well underway long before Putin or any alleged corporate price gouging could have had any impact.
What does that amount of inflation do to an American family?
A late March University of Michigan consumer survey, found that a record 32% of Americans said they expected their personal financial situation to worsen in the coming year.
That's the highest-level of consumer pessimism ever recorded by this survey, which dates back to the mid-1940s.
The greatest worry weighing on people's mind – 'reducing living standard due to rising inflation,' according to the University of Michigan survey.
Bloomberg estimates that inflation will cost the average American household an extra $5,200 this year, or $433 per month in added expenses.
That's far more than most people got from Biden's stimulus spending, demonstrating the destructive folly of this reckless political sop.
We can now say that Biden's massive government spending – not war in Ukraine or greedy US corporations – is largely responsible for inflation. (Above) President Biden delivers remarks on gas prices in the Eisenhower Executive Office Building on the White House complex on March 31, 2022
Wholesale prices jumped a record 9.7 percent in 2021. And so far in 2022, yearly wholesale prices increased 10% in both January and February.
We are experiencing the worst wholesale price increases in 40 years and those increases will continue to dramatically increase retail prices for months to come.
The truly disheartening reality of this is that none of that Covid relief spending was strictly necessary or advisable as we were emerging from the pandemic.
Indeed, many prominent liberal economists warned at the time that it was likely to trigger a dangerous surge of inflation – but Biden wanted to kick off his administration with a political win and he believed the legislation would enable him to take credit for politically popular stimulus payments.
To the surprise of absolutely nobody with even a tenuous grasp of elementary economics, artificially inflating already heated demand with government stimulus checks put upward pressure on prices, exacerbating the surging inflation we've been living with ever since.
The connection between this massive government spending spree and the current inflationary surge is undeniable.
The good news is that Biden has now announced that he will begin releasing 1 million barrels of oil per day from the Strategic Petroleum Reserve, which is an obvious concession that the way to bring down prices at the pump is simply to increase the supply of oil.
We can now surmise that there's somebody at the White House who remembers their first day in Economics 101.
'The bottom line is if we want lower gas prices, we need to have more oil supply right now,' Biden declared.
Let me hear a 'Hallelujah' on that one!
Biden's decision to tap the Strategic Petroleum Reserve is also a demonstration that he has perhaps realized both the importance of America's energy sector and the political folly of his crusade against American energy production.
If we can bring down prices at the pump by increasing the supply of oil – and we all now acknowledge that we can – then why not let the energy sector loose and encourage it to increase supply in a sustainable way?
On taking office Biden almost immediately killed the Keystone XL pipeline that could have supplied American refineries with abundant oil from Canada.
He withheld permits for drilling in ANWR, the Gulf of Mexico, and other federal lands.
Meanwhile, his administration slow walked drilling permits as his 'climate czar,' John Kerry, was pressuring banks to reduce financing for U.S. oil and gas companies.
Tapping our strategic energy reserves will only last until that gas can is empty. Thanks to President Trump, that will be months from now (Biden's team is surely hoping it will last until after the November election, perhaps explaining why the release did not occur earlier).
But it will empty before we emerge from this inflationary crisis.
We need to stop applying band-aid policies and treat the root cause of the problem – government juicing demand and limiting supplies.
Inflation is a tax that inflicts devastating pain on working families, and the outlook keeps getting worse every month.
It's time to stop the blame game. We know what caused this. The data is clear.
It's time for the Biden administration to take the blame and acknowledge economic reality.
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