The U.S. dollar has let out its belt a couple inches since exiting the pandemic lockdown. Newly released data for October shows consumer prices up 6.2 percent over a year ago, and wholesale (that is, supplier) prices up 8.6 percent over a year ago. The wholesale annual pace is the highest since the Labor Department began tracking the statistic in 2010, and the consumer price index (CPI) reached its highest rate since 1990. In other words, the entire control panel for the Biden administration is flashing red.
"This inflation is here to stay for a while," warned Financial Issues Stewardship Ministries CEO Dan Celia. "It's impossible for it not to get worse right now." He pointed to indicators like the ongoing supply chain dilemma, the shortage of truck drivers, skyrocketing energy prices, and trillions of dollars in government spending. "President Biden has to take full blame for all of this," he insisted. While some bumps along the economic road are aftershocks from the pandemic, since taking office Biden has done more to perpetuate them than to provide against them.
Take energy prices, said Celia, "one of the key drivers of the price spike." It not only comprises part of the CPI, but as a key input for production, transportation, storage, and other economic activities, it affects the price of everything else. Energy prices alone rose 4.8 percent in October and a whopping 30 percent over the past 12 months. Fuel oil, primarily used for heating homes, rose 12.3 percent in October and 59.1 percent for the year. "Electricity is spiking," complained Celia, "and we're not even into winter yet."
Even the Biden administration, which manages crises like an ostrich, can no longer ignore skyrocketing energy costs, particularly gasoline prices. The president directed the Federal Trade Commission to investigate and punish any instances of price gouging. But Celia said the real problem is basic supply and demand. "We got little supply with a lot of dollars out there trying to chase it," he said, so "prices are going to continue to go up." Biden seems to agree; he admitted last month that gas prices will remain high into next year. He even begged OPEC and Russia to fix his mess by increasing oil production, "as if that's going to stop the carbon footprint," said Celia.
"But the problem with supply," said Celia, is "all self-inflicted by this administration... He's had a war on energy [since] the day he came into office." Biden froze Keystone pipeline construction immediately and is now considering mothballing another. He opposes fossil fuels at every turn and pushes for inefficient green energy subsidies. We don't have enough electricity to heat our homes, and he wants Americans to drive electric cars. He may as well propose flying cars. And he still stubbornly insists that spending trillions more money won't worsen inflation.
But Biden will have to face the political consequences from the economic mayhem his administration is instigating. His approval has now tumbled to 36 percent in a new Susquehanna poll, with 52 percent disapproval. Inflation, Biden's poll numbers, and the 2021 elections rout are causing vulnerable Democrats like Senator Joe Manchin (W.Va.) and Representative Abigail Spanberger (Va.) to withhold their support from Biden's radical legislative agenda.
Wrecking household budgets is a shortcut to political defeat. Celia said no politician wants voters to remember them when paying extra for a tank of gas. The last time Americans saw inflation this high, an establishment president lost his reelection bid to a young, Southern governor who rode to victory on the phrase, "it's the economy, stupid." Will history repeat itself?
