In a big speech today, President Joe Biden once again compared himself to FDR and asserted that the U.S. is by far the fastest growing economy in the world today. Well, in terms of the fastest growing economy in the world today, the U.S. in the last five quarters has grown at about 1% at an annual rate. That’s for 15 months.
Canada, which is right next to us, just up north, is growing at over 3% – that’s three times as fast. Whoops! Now, most of Europe is growing at about the same stagnant 1%. India is growing at above 6%. China at roughly 4.5%.
So, I don't know which world Mr. Biden is looking at. As far as FDR is concerned, that's a longer discussion, but I’m going to say Joe Biden is far more socialist than FDR ever was. However, FDR's massive taxing and regulating policies stifled private investment. He declared total war against business. He failed to solve the Great Depression until World War II mobilization occurred.
Roughly 10 years after the onset of depression, the U.S. unemployment rate was over 19%. That was in 1938. In fact, 1937-1938 was a recession inside the depression. Now, true enough, it was Republican Herbert Hoover who signed insane tax and tariff increases and a mistake-prone Federal Reserve policy that brought on the depression in the first place, but FDR's class warfare against business and entrepreneurs failed to solve the depressionary slump and undoubtedly made it worse.
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Then Mr. Biden goes through the usual nonsense about telling us how bad the economy was 2 ½ years ago when he first took office. This is part of his "Bottomless Pinocchio." He inherited a 6.5% growth rate with 1.4% inflation from President Donald Trump. Today, economic growth is hovering at a stagnant 1% and while the year-to-year changes of inflation have cooled from over 9% to roughly 5%, what matters to middle-class working folks is the change in the level of prices, which is not going down and has damaged affordability for everyday items and contributed to a massive decline in real wages, what Ronald Reagan called take-home pay.
Under Joe Biden, this level of consumer prices has increased 15.6%, groceries 19.7%, gasoline 41.7%, new cars up 20%, and on and on. So, therefore, when Joe Biden tells us how his policies have built the economy from the middle out and the bottom up, instead of the top down, this is another "Bottomless Pinocchio."
EJ Antoni of the Committee to Unleash Prosperity has shown, using Bureau of Labor Statistics data, that real wages in the bottom quartile fell 2.3%, and dropped 3.9% in the second quartile. For the entire worker spectrum, Bidenomics has produced a 2.1% decline in wages measured after inflation.
This is killing everybody: lower, middle, even upper. It has always been the soft underbelly of the Biden economy. Mr. Biden may brag about all of his new spending for high-speed internet, but the reality is it was the Trump administration that developed and fleshed out a true national 5G policy, which included well over $100 billion of spectrum auctions to the private sector, who will then be more efficiently developing high-speed internet, but $65 billion of internet-related government spending is an outrageous sum.
Both wireless operators and local officials will have no idea nor any capability of how to spend those gigantic sums. It will wind up being pure election-year pork -- another Biden grift and, by the way, just for the record, the vast amount of investment in this country, even despite Joe Biden's efforts, comes from the private sector, not the government and, finally, as Mr. Biden brags about bringing electricity to American homes and to farms, the reality is his war against fossil fuels is killing electricity.
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Some estimates show that Biden's turning off the fossil spigot would damage 65% or more of the electric grid, which, contrary to Biden's radical climate followers, still depends overwhelmingly on oil, gas and coal. So, there you have another "Bottomless Pinocchio."
Mr. Biden can't get his story straight, can’t get his facts straight, but, most importantly, hasn't gotten his economy straight. He has brought us inflation and stagnation. Big government socialism hasn't worked and never will. Save America. Bring back free market capitalism.
This article is adapted from Larry Kudlow’s opening commentary on the June 26, 2023, edition of "Kudlow."
