With an eye toward the upcoming presidential elections, the White House has launched a new public relations campaign called “Bidenomics,” to define President Joe Biden’s economic agenda.
“I don’t know what the hell that is, but it’s working,” Biden stated at a June 17 union rally in Philadelphia, begging the question: what is Bidenomics, and is it working?
According to a White House statement, Bidenomics rests on three pillars: massive “smart” government spending on renewable energy and semiconductors, support for unions and domestic manufacturing, and promoting competition. As a result, the White House states, “our economy has added more than 13 million jobs—including nearly 800,000 manufacturing jobs—and we’ve unleashed a manufacturing and clean energy boom.”
The Creating Helpful Incentives to Produce Semiconductors and Science (CHIPS) Act of 2022 allocates $280 billion in federal spending to bolster U.S. semiconductor manufacturing. The Infrastructure Act of 2021 allocated more than $65 billion for “clean energy” projects. And the 2022 Inflation Reduction Act allocated an additional $394 billion for clean energy in the form of tax incentives, loans, and grants.
“I would define it as trickle-down big government,” Jonathan Williams, chief economist at the American Legislative Exchange Council, told The Epoch Times. “The common thread of this administration has been growth and expansion of government power, and certainly big government spending.”
According to National Security Advisor Jake Sullivan, when Biden took office, “America’s industrial base had been hollowed out. The vision of public investment that had energized the American project in the postwar years—and indeed for much of our history—had faded.“
Sullivan, who, despite his focus on security issues, has become a spokesman for Bidenomics, has been highly critical of what has been called “Reaganomics,” or a platform of tax cuts, trade liberalization and deregulation.
“There was one assumption at the heart of all of this policy: that markets always allocate capital productively and efficiently,” Sullivan said during an April speech at the Brookings Institution.
“President Biden … believes that building a twenty-first-century clean-energy economy is one of the most significant growth opportunities of the twenty-first century,” he stated. “But that to harness that opportunity, America needs a deliberate, hands-on investment strategy to pull forward innovation, drive down costs, and create good jobs.”
Despite the administration’s argument that government is best positioned to direct private industry, some critics say that waste and failure are the hallmarks of government industrial policy.
Political Investors
“The government is not in the business of making good investments,” economist Arthur Laffer, a former advisor to Presidents Ronald Reagan and Donald Trump as well as U.K. Prime Minister Margaret Thatcher, told The Epoch Times. “That’s not what they should be doing,” he said.
“These guys are not good investors; they’re political investors,” Laffer said. The more the government seeks to influence the private sector, the more the private sector will orient itself toward producing what the government wants versus what consumers want.
“Bidenomics is nothing more than the application of government intervention to guide, direct and restructure the economy as the White House thinks it should be structured,” Steve Hanke, economics professor at Johns Hopkins University, told The Epoch Times.
“This type of interventionism flies under the rubric of ‘industrial policy.’ It’s where government picks winners and losers by using levers of government policy, like taxes subsidies, regulations, tariffs, quotas, and even outright bans.”
Recent examples of government ventures into private industry include Solyndra, a California maker of solar panels that received $535 million in federal loan guarantees from the Obama administration before going bankrupt.
Under Bidenomics, automakers are being pushed by a combination of consumer subsidies, manufacturing grants, and ever-tightening emissions regulations to switch their production from gasoline-powered cars and trucks to electric vehicles (EVs). However, there is scant evidence that enough consumers will switch to EVs to justify the investments or that carmakers will be able to source enough lithium, cobalt, and other minerals to build EV batteries in large quantities, or that the U.S. electric grid can build enough new generation capacity and connect enough charging stations to charge EVs at scale.
At the same time, the Biden administration is working to reduce domestic production of oil, gas, and coal in favor of wind and solar, with the same supply issues that automakers face. The required minerals for wind turbines and solar panels are typically mined in countries that may not be friendly to the United States, and it has created a heavy dependence on China, which controls most of the refining of these minerals.
According to Hanke, who served on Reagan’s Council of Economic Advisors, “Bidenomics is nothing new. Advocates of industrial policy in the 1980s used to latch onto Japan as a model for industrial policy, arguing that it contributed to Japan’s emergence as an economic power after World War II.
“But since the last three lost decades in Japan, the industrial policy advocates have gone radio silent,” Hanke said. “It’s hard to imagine a more misguided way to make decisions than to put them in the hands of those who pay no price for being wrong.”
Trillions in New Spending
To date, the Biden administration has overseen more than $4 trillion in new spending, of which $1.6 trillion was passed by Congress on a partisan basis, $1.4 trillion was passed on a bipartisan basis, and another $1.1 trillion came from Biden’s executive actions. Despite this spending, the White House claimed in March that “the President’s Budget improves the fiscal outlook by reducing the deficit by nearly $3 trillion over the next decade.”
The Congressional Budget Office (CBO) sees it differently, however.
“Under the President’s FY 2023 budget, the debt would grow be allowed to grow by $16 trillion over ten years, or $50,000 of debt per American citizen,” the CBO reported in March. “Under CBO’s current projections, the gross federal debt would increase from $31 trillion today (123 percent of GDP) to $52 trillion (132 percent of GDP) in 2033.”
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“Probably the worst part of Bidenomics is the enormous increase in spending,” Laffer said. “I never could have guessed anyone would have overspent like that.
“If you look at the national debt-to-GDP or any other measure, it’s gone way, way up,” he said. “This is an egregious reversal of what would be good economics.”
Tax Policy Under Biden
“Forty years of handing out excessive tax cuts to the wealthy and big corporations had been a bust,” Biden stated. By contrast, Bidenomics “is about building an economy from the bottom up and the middle out, not the top down.”
While most of the tax hikes that Biden called for have so far failed to get through Congress, critics argue that Americans have experienced significant tax hikes nonetheless, due to another economic phenomenon to carry the president’s name: “Bidenflation.”
“The inflation that has come in under Biden has pushed capital gains tax rates way up, because we have illusory capital gains that are now subject to capital gains taxation,” Laffer said. Because of inflation, he said, the nominal value of assets has increased dramatically, even though in terms of purchasing power “it’s the same thing.”
This results in a “tax on the illusory capital gains,” he said. Inflation has also pushed Americans into higher income tax brackets, despite the fact that wage gains often failed to keep up with rising prices, leaving Americans poorer but facing higher tax liabilities.
“If you look at the corporate rate, it’s still what it was when Trump left; and as you look at the personal income tax rates, 37 percent is still the highest,” Laffer said. “But if you look at all the inflation induced tax rate increases, they’ve been quite substantial.”
And this is in addition to the effective tax of inflation itself, which drives up the cost of goods and services as the dollar loses its value. Inflation was cited as the main reason why 76 percent of Americans polled in an Associated Press-University of Chicago survey in May had a negative view of Biden’s economic policies.
“There’s nothing that can bring the economy to its knees faster, and more damagingly, than an unhinged paper currency and high inflation,” Laffer said.
Under Bidenomics, the White House asserts, “America has seen the strongest growth since the pandemic of any leading economy in the world. Inflation has fallen for 11 straight months and has come down by more than half.”
As is often the case with statistics, however, the time period you consider colors what the numbers show. While the official inflation rate, according to the consumer price index (CPI), came down from a high of 9.1 percent in June 2022 to the current rate of about 4 percent, it remains well above pre-pandemic levels of below 2 percent.
Many attribute escalating prices to unprecedented levels of government spending, coupled with policies that discouraged the production of oil and gas, driving up the cost of gasoline and diesel, fertilizer, food, and transportation, although the Biden administration has blamed the Russian invasion of Ukraine.
The story is similar to economic growth under Biden. After U.S. GDP fell by 2.8 percent in 2020 due to the COVID-19 pandemic and government lockdowns, America’s economy roared back to a positive 5.9 percent GDP growth in 2021 once lockdowns were lifted and businesses rushed to rehire laid-off workers.
Following this burst, however, the United States has underperformed against most other industrialized countries. While the average global GDP growth rate for 2022 was 3.1 percent, according to the World Bank, the U.S. GDP growth rate in 2022 lagged behind the rest of the world at 2.1 percent. Among “leading economies,” the U.K.’s GDP grew by 4.1 percent; France’s by 2.6 percent; Sweden’s by 2.6 percent; Spain’s by 5.5 percent; Mexico’s by 3.1 percent; and Canada’s by 3.4 percent. Germany, at 1.8 percent, was one of the few industrialized countries that underperformed the United States.
Notably, GDP also includes government spending, which hit record levels under the Biden administration.
Employment Remains a Bright Spot
According to the White House statement, “under Bidenomics, the unemployment rate fell below 4%,” and the abundance of jobs is certainly one of the bright spots of the current economy. Here too, however, critics say there are clouds.
The labor participation rate, which is the percentage of able-bodied people seeking work, hit a high mark just above 67 percent in the year 2000. It fell to a low of 62.5 percent in 2015, before climbing back to 63.3 percent in 2020, under Trump. It then plummeted to 60 percent during the pandemic and is currently at 62.6 percent under Biden, the same level as during the Obama administration.
Many blame an expansion of social programs and unemployment benefits for the number of Americans leaving the labor market. This also makes the unemployment rate seem lower because those not even seeking work are not counted in unemployment statistics.
“Encouraging people not to work has reduced the unemployment rate, that’s true,” Laffer said. “It’s also reduced the participation rate. It’s reduced both the employment rate and the unemployment rate, which is the antithesis of what we want in a healthy economy.”
Gravy Train for the Super-Rich
Biden claimed that tax cutting under Reagan only benefitted the rich and “hollowed out the middle class.” By contrast, a central pillar of Bidenomics is “empowering and educating workers to grow the middle class,” according to the White House statement.
But some economists argue that Biden has it backwards, that government intervention makes the private economy even more of an insider game at the expense of everyday Americans.
“The one thing we know for certain about big government and more government spending is that it provides a gravy train for the super-rich, rent-seeking class,” Hanke said.
“The surge in government spending over the last five years has resulted in a huge jump in U.S. billionaires’ wealth, from 15 to 18 percent of GDP,” he said. “So much for the equity arguments that are draped over Bidenomics.”
“The best way to make profits today in the private sector is to lobby the government for a contract or a regulation to help you,” Laffer said. “If you tell a business that was profit-focused, that you can make the most profits by lobbying government, of course, they’re going to do that.”
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Regulation and Centralized Authority
The other major component of Bidenomics is a sharp increase in government regulation. This includes new draconian emissions regulations from the Environmental Protection Agency (EPA), new appliance regulations from the Department of Energy (DOE), and new Securities and Exchange (SEC) requirements for producing audited reports on CO2 emissions for all listed companies.
A June report by the Committee to Unleash Prosperity estimated that the added costs of new Biden administration regulations, “which include both their current and expected future costs, amount to almost $10,000 per household.” By contrast, the Trump administration reduced regulatory costs on Americans by $11,000 per household, the study stated.
The report stated that, as reported by federal agencies themselves, the cost of new regulations they were implementing under Biden summed to $173 billion per year, although the report estimated that the costs were actually much higher, at $616 billion per year.
Beyond costs, critics charge that the Biden administration has been particularly aggressive in attempting to centralize authority within federal agencies at the expense of local government.
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“One of our greatest criticisms of this administration’s policy agenda is that everything has the common thread of trying to federalize decisions in Washington, and central government versus allowing the states to compete with each other,” Williams said. The Biden administration is “changing the incentive structure for many states in favor of a big government agenda.”
Historically, American states have been free to compete with each other on policies, and this has allowed for experimentation in terms of what works best. Business and workers typically respond by investing in and relocating to states that provide the most attractive conditions in terms of living costs, tax rates, regulations, and quality of life, and the last several years has seen a flood out of progressive states like California, New York, and Illinois, in favor of conservatives states like Texas and Florida.
“[Biden’s] policy agenda has been to undermine state autonomy and federalism wherever possible, whether that is federalizing elections, banning state right-to-work laws [or] telling states you can’t cut taxes if you take federal bailout dollars,” Williams said. “The Biden administration has flooded state budgets with unprecedented amounts of federal aid.
“While that federal aid is temporary, the strings that are attached to it are not temporary.”
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Article cross-posted from our premium news partners at The Epoch Times.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
