The Morning Jolt

White House

Is Biden Oblivious to a Mounting Economic Disaster?

President Biden speaks at the White House in Washington, D.C., November 6, 2021. (Jonathan Ernst/Reuters)

On the menu today: New numbers indicate that the interrelated problems of inflation, fuel prices, and the supply-chain crisis are getting worse — raising the question of whether the Biden administration realizes how bad the economic outlook is and how ineffective its actions look. Elsewhere, the White House promises that President Biden will get around to taking a physical eventually; a disturbing pattern of the executive branch ignoring the Constitution’s checks and balances takes root; and apparently, Gavin Newsom wasn’t seen in public from October 27 to November 9 because he really wanted to go trick-or-treating with his kids. As Mark Twain said, “It’s no wonder that truth is stranger than fiction. Fiction has to make sense.”

Inflation and the Supply-Chain Mess Are Getting Really Bad. Is Biden Paying Attention?

It’s not that the climate summit, court fights over access to documents related to the January 6 Capitol Hill riot, and Republican infighting in the aftermath of the infrastructure bill aren’t news. But if you had to guess which issue we’re still going to be talking about in six months, you probably wouldn’t pick those. You would probably pick the economy, particularly the angles of inflation and the supply-chain problems.

When the updated numbers were released at 8:30 a.m., Americans learned that prices rose 6.2 percent in October compared with a year ago, the largest such increase in 30 years.

Even with all of the focus on education in Virginia, exit polls still found that the single most important issue to voters was the economy. And if you listen to the economists, we are nowhere near the end of this current painful bout of inflation:

Economists surveyed by The Wall Street Journal estimate the Labor Department will report the consumer-price index—which measures what consumers pay for goods and services—rose 5.9 percent in October from the same month a year ago. That would mark the fastest pace since 1990 and the fifth straight month in which inflation topped 5 percent. . . .

Laura Rosner-Warburton, senior economist at MacroPolicy Perspectives, thinks the U.S. is entering a six-month period of unusually high inflation.

“I do think we’re moving into a new phase where inflation is broader and where things are going to get a little more intense,” she said. “Part of that reflects that [supply-chain] bottlenecks are not resolved going into the holiday season, when a lot of purchases get made, and that the economy is doing really well, so you have strong demand.”

Ms. Rosner-Warburton sees a shift under way in which a wider range of factors will push up inflation, as opposed to the previous months’ increases, which were driven disproportionately by skyrocketing vehicle prices and the reopening of services after Covid-19 vaccines became available. “Part of [this] still seems likely to be transitory, but maybe not all of it,” she said.

Every time there are new bad numbers on inflation, I look back to President Biden’s angry, defensive assertion on July 19: “There’s nobody suggesting there’s unchecked inflation on the way — no serious economist. That’s totally different.”

In fact, as the New York Times concedes, the new data are likely to undermine another bit of the administration’s spin:

White House officials have embraced a key talking point as a bout of high inflation hits consumers and hands Republicans ammunition to argue against President Biden’s policies: Price gains may be faster than usual, but at least they are slowing down from rapid summertime readings.

Data to be released on Wednesday is likely to eliminate that shred of comfort.

According to AAA, the nationwide average price of gasoline is the highest it has been since 2014. Since everything you buy has to get from the supplier to the store on a truck that runs on gasoline, higher gas prices mean higher prices for everything else — on top of our supply shortages and higher consumer demand.

Even if Democrats reflexively insist that, “No president can control inflation and the international supply chain!” the executive branch and its considerable resources and regulatory authority can at least somewhat mitigate the problem, and no president wants to look like he’s throwing up his hands and quitting, telling American consumers they’re on their own. In fact, today, Biden will speak at the Port of Baltimore about “how the Bipartisan Infrastructure Deal delivers for the American people by upgrading our nation’s ports and strengthening supply chains to prevent disruptions.”

The administration’s first moves don’t seem to be having much of an effect: “The number of container ships stuck off the coast of Southern California reached new records on Tuesday. According to data from the Marine Exchange, a total of 111 container ships are bobbing at sea around the ports of Los Angeles and Long Beach, waiting to dock and unload. That breaks the previous record of 108 vessels reported on October 21.”

Alas, most of the Biden administration’s solutions — and policies from other heavily Democratic institutions — are making the problems worse:

  • As Mario Loyola laid out, “The World Economic Forum rates America’s shipping-industry regulations as the most restrictive in the world, chiefly because of the Jones Act. Stifling regulations have left America with the most inefficient ports in the world. A recent review of container-port efficiency ranked the ports of Los Angeles and Long Beach below ports in Tanzania and Kenya, near the bottom of the list of 351 top ports. America’s ports are effectively third-world. The 50 most efficient ports in the world are mostly in Asia and the Middle East; none are in America.”
  • Loyola continues, “Above all, it is the shortage of truck drivers that’s causing the current crisis. And why do we have that shortage? One reason, according to truck drivers, is that the restrictions on their access to ports are too onerous. The Jones Act has made that problem worse, too. The Jones Act ‘has made coast-wise shipping prohibitively costly and therefore put additional pressure on alternative inland transit such as trucks and trains,’ Lincicome writes. “In practice, this means badly needed rigs that could be servicing U.S. ports currently are instead stuck on I-95 ferrying oranges from Florida to New York.”
  • Earlier this year, Heavy Duty Trucking reported that the Biden administration had imposed a tariff on truck chassis (the framework that provides the truck base that includes the wheels and axles) made in China; “chassis or sub-assemblies imported from China for the next five years will be subject to tariffs/duties that would add up to more than twice the value of the actual chassis itself.”
  • Weston LaBar, executive director of the Harbor Trucking Association in California, told Heavy Duty Trucking that that, “The [U.S. International Trade Commission] really botched their decision, at a time when our industry is needing to inject more equipment, both for capacity and for folks trying to retire older equipment. Now people have to stretch out the useful life of existing equipment, which isn’t an ideal thing from a safety standpoint. And now we’ve created scarcity and increased the cost.”
  • California imposed regulations requiring trucks built before a certain date to replace their engines or not operate in the state.
  • Our Dominic Pino observes that the Biden administration wants to make two-man crews for freight-train engines standard, forever — no matter what technological advances occur. The unions for the train crews argue that trains are like planes and require two engineers — unlike a freight truck, which can be safely driven by one person. “As the Association of American Railroads says, plenty of other trains operate just fine with only one person at the controls. In the European Union, Australia, and New Zealand, one-person crews are the norm, and even in the U.S., passenger trains are commonly driven by one person.”

Interestingly, the Biden administration relaxed its enforcement of the COVID-19 vaccination requirements for truck drivers, declaring that most truckers are not covered by Biden’s COVID vaccine and testing requirements for private businesses.

Also, this morning, the secretary of transportation “repeatedly claimed the shortage of affordable child care [was] main culprit for supply chain issues and employer shortages, in [an] interview on MSNBC’s ‘Morning Joe.’”

Brit Hume succinctly summarizes the dangers of inflation:

Inflation is really a dangerous thing because whatever other gains are made in wages and so forth are wiped out by inflation, and it damages your savings. As long as the Fed, if interest rates are low, it’s going to be hard for people who have savings to make the kind of gains that they want and need. It is about as corrosive a factor in American life as one can imagine, and it has remained at bay for many years now. And here it’s back. And the Fed keeps telling us, no, this is transitory, and maybe it is. But if this administration is going to have an anti-fossil fuels policy that continues to drive energy prices ever higher, they’re not going to be to convince people that inflation is under control. . . . This is kind of politically insane to let this go on. And to shut down pipelines and not approve pipelines and end up begging Saudi Arabia to increase its production to offset the loss of energy here at home, I think is not going to sit well with the public. No question about it.

White House: Don’t Worry, We’ll Update You on the President’s Health — Eventually

Yesterday’s Morning Jolt:

In May, the White House said that President Biden planned to have a checkup later this year, and that the results would be released to the public. Either Biden has not had that checkup yet, or he did and the White House has not release the results. The last time Biden disclosed any health information was a three-page summary on December 15, 2019, nearly two years ago.

Yesterday’s White House press briefing:

Q: Okay. And then, we were told much earlier this year that the president would be getting his annual physical later this year. It’s obviously later this year. The year is almost up. So, when will he be getting that physical? And will we get the full results of that?

JEAN-PIERRE: I was just thinking — right? — it is later this year. It’s November. I don’t — (laughter) — the year is flying by. I don’t have anything for you. As Jen has said and we have said, that is going to happen. And once it does, we will be transparent about it.

Q: But it will for sure be done before the end of the year?

JEAN-PIERRE: I — that’s — I think that’s what we have said in the past. We would get this done — we’ll make sure to get this done and share it with all of you when it gets done — when it happens.

Thanks to the reporter who asked that question. I don’t know for certain that they’re a Morning Jolt reader, but I’d like to think so.

The Founders Thought This ‘Checks and Balances’ Thing Was Important

Our Charlie Cooke detects a pattern of the Biden administration’s taking obviously illegal actions in the hopes that by the time a court finds them illegal, they will have already achieved their aims:

While [Biden] may not want to sound like a king, he is perfectly comfortable acting like one, and, as Barack Obama and Donald Trump did before him, he knows that it is easier to ask forgiveness than to ask permission. DACA might be struck down? Okay, but by the time it is nixed, its beneficiaries will be harder to deport. The funds used to pay for the border wall were illegally sourced? Tell that to the contractors once the construction work has been done. OSHA has no authority to issue COVID-19 regulations to private businesses, let alone on an expedited basis? Fine, but, with any luck, the businesses in question will have already done what it wishes them to do by the time a judge says as much.

ADDENDUM: California governor Gavin Newsom sort-of, kind-of explains part of his recent disappearance from public events: He skipped the climate-change conference in Scotland because his kids didn’t want him to miss Halloween. Hey, every working parent has been there, and every dad should allow for that quality time with his family . . . but that doesn’t really explain why Newsom didn’t do any public events for another nine days after Halloween.

Recommended

The Latest