President Joe Biden is facing a bombardment of economic challenges that threaten his legacy in just one year, from four-decade high inflation to empty supermarket shelves. As has been the case in recent months, the president is blaming everyone else for these woes rather than taking responsibility for contributing to these problems. At a Jan. 24 White House powwow with officials, the president revealed he had uncovered a secret to lowering prices and encouraging innovation: Competition. Did Biden channel the spirit of Milton Friedman? Not quite. It was a case of the good, the bad, and the ugly.
Biden Discovers Competition
Before a second White House Competition Council meeting Monday, President Biden provided a progress report on how his administration is grappling with a soaring consumer price index (CPI) and producer price index (PPI). For the president, it is all about fostering an environment of competition, despite the nation’s capital doing anything but facilitating competitive behavior nationwide for years.
Biden explained in prepared remarks that he signed an executive order this past summer that targeted greater competition throughout the economy by clamping down on industries wrestling with too much consolidation that he thinks the federal government must address. Prior to the meeting that consisted of Treasury Secretary Janet Yellen, Transportation Secretary Pete Buttigieg, and Commerce Secretary Gina Raimondo, Biden touted various directives instituted by federal agencies that led to better competitive practices.
These edicts included letting consumers purchase hearing aids without a prescription and removing limits on where customers can repair their smartphones. He also championed a measure that addressed non-compete clauses that restricted workers from finding a job at an employer’s competitor for a specified period. Once again, the president celebrated his objective to rein in the meat industry by subsidizing independent food processors and pledged “more protections for farmers and ranchers.”
“This isn’t just about quick wins. It’s about reversing decades of concentration that have hurt workers, consumers and small business. It didn’t happen at any one time. It’s been over a period of time now — a long time,” Biden told the press. “The bottom line is: Our economy shouldn’t be about people working for capitalism. It should be about capitalism working for people, for everyone.”
But will cutting “junk fees” from financial institutions and enhancing airline transparency combat inflation levels that have not been seen since June 1982? It is all window dressing that fails to address anything of substance that is contributing to a soaring cost of living in this post-pandemic economy.
No Meat and All Potatoes
Some of President Biden’s proposals should be lauded. For example, he is pushing the Federal Trade Commission (FTC) to eliminate unnecessary occupational licensing restrictions that impede economic mobility. But this is offset by the moves to restore net neutrality, prohibit landlords from entering into agreements with internet service providers, and ban non-compete clauses.
Why are meat prices up 12.5%? Why is gasoline up 49.6%? Why are many shelves at grocery stores nationwide empty? Why is life overall more expensive in Biden’s America?
The president would have the country believe that Big Oil, Big Meat, Big Ag, and Big Pharma are the primary cause for all the economic ailments afflicting consumers’ wallets. Indeed, the consolidation of companies has been a notable concern for some time, but this is hardly anything new and unlikely weighing on inflationary pressures today. Plus, unilateral executive action and tiresome meddling in private business are ingredients for a recipe of disaster.
Although big government has led to the formation of Big [insert industry here], a natural monopoly or duopoly is not inherently an odious development. As Liberty Nation wrote in August 2019:
“This entity may be devised through several means, including producing goods at very little cost, selling products at the lowest possible price, and offering great customer service unseen anywhere else. Consumers have been so satisfied by the company’s operations, products, and prices that they have shut down other businesses by only patronizing this one firm.”
That said, today’s economic setbacks are due to a combination of factors: creating one-third of all U.S. dollars ever created in two years, fiscal stimulus campaigns, and market fundamentals (shrinking inventories, lackluster output, and strong and simultaneous global demand). A “nutrition label” for internet service and “right to repair” rules will hardly make a dent in an annual inflation rate at 7%.
While President Biden is not 100% to blame for nearly 40-year high inflation, he could have eased the price of energy by pushing domestic oil and gas companies to “drill, baby drill” and putting his green agenda on an ice sheet in Antarctica. Many energy businesses possess a great deal of consternation amid regulatory uncertainty, despite prices trading at their best levels in eight years. Instead, America’s energy independence is eroded, the government is turning to the Middle East again, and Biden is targeting gas stations for unfounded claims of price gouging and collusion.
At Least It’s Not Price Controls!
There has been a growing push for the administration to adopt price controls in the mainstream press and among some economic commentators. CNN has floated the idea, The London Guardian has promoted the concept, and The New York Times has given the nostrum an air of credibility. Right now, reports suggest that the White House has not had any serious discussions surrounding price controls. And refraining from placing quotas and manipulating prices is perhaps the best thing the president has done in his one year in the Oval Office. If there is one public policy that is universally loathed in the economics profession, it is price controls. Heck, even Keynesian apotheosis Paul Krugman opposes restrictions on the costs of goods and services in the open market.
The Oscillation of Bad Ideas
Legendary writer H.L. Mencken wrote: “For every complex problem there is an answer that is clear, simple, and wrong.” This is the Biden administration in a nutshell. Inflation is high. The solution? Cut spending and shut off the printing press. Oil supplies are failing to meet demand, resulting in higher prices. The answer? Greater production among domestic energy firms. Instead, all the president’s men and women are abandoning reality in favor of some manufactured bogeyman to shield themselves from criticism and pass the buck onto something or somebody else. This is Bidenomics 101: Blame everyone.
~ Read more from Andrew Moran.