Biden’s Free Market Conundrum: Reality Bites

In the classic Lewis Carroll novel, Alice's Adventures in Wonderland, the main character says, “If I had a world of my own, everything would be nonsense." Who knew this would become the economic doctrine of the Democratic Party? President Joe Biden and his leftist comrades have embraced a unique perception of the broader economy, one that defies reality and champions insolent policies that solve the problems manufactured in their fantasies rather than the actual situations unfolding on the ground. From Big Oil to Big Meat, Bidenomics is an ideology of finding bogeymen under the bed.

Art of the Wurst Deal

For several months, the Biden administration has insisted that meat prices are surging because four companies control most of the beef, pork, and poultry markets. It contends that the anti-competitive behavior of the conglomerates unfolding in the food sector has contributed to higher grocery bills. As a result, President Biden announced a $1 billion plan to improve and expand the meat-producing supply chain, with hundreds of millions of dollars going to independent processors.

But while Big Meat might seem like the perfect villain to function as a scapegoat with less than a year until the mid-term elections, the problems with meat prices are much deeper than the White House would have voters believe. Surging demand, a supply chain crisis, wage inflation, higher energy prices, and a plethora of other problems have led to sticker shock at the local supermarket.

Moreover, common sense suggests that the president's assertions are about as putrid as ground beef sitting outside the refrigerator for a week. If rampant inflation were not a severe problem, these companies would undercut their competitors and lower prices. Plus, if these businesses had the opportunity to exploit shoppers, they could have achieved this before the coronavirus pandemic.

It is also worth pointing out that the smaller independent meat processors are unable to mirror the efficiency and lower prices of larger producers and packers. Therefore, by supporting the mom-and-pop processors, the federal government will need to routinely bail out these entities with taxpayer-funded financial aid for many years.

According to the Bureau of Labor Statistics (BLS), overall meat prices advanced at an annualized rate of 16% in November, led by a 21% spike in beef and veal.

Gas Prices Driving in the Fastlane

Here is an indisputable fact: Motorists are paying more for gasoline than they were a year ago. According to AAA, the national average gas price is $3.29 per gallon, up from about $2.25 the same time last year. It appears these higher costs have eased for drivers, but in a broad-based inflationary environment, paying more at the pump is just another added expense few can absorb.

What is happening? President Biden believes that gas station fraud is the culprit. In November, he directed the Federal Trade Commission (FTC) to look into the "large gap between the price of unfinished gasoline and the average price at the pump." The administration also thinks that the oil and gas titans raising dividends and engaging in stock buybacks are somehow connected to rising costs.

Many industry observers have dismissed these claims, arguing it is implausible that Big Oil is colluding with gas stations to increase the cost at the pumps artificially. But if it is not station fraud leading to $3 gasoline, what is it?

The energy market has been on a roller coaster ride since a barrel of crude oil fell below $0 for the first time in history in the early days of the global health crisis. So far, the sector has stabilized, with West Texas Intermediate (WTI) and Brent contracts rallying to around $75 per barrel. Swelling international demand for Texas Tea,, higher wages, and the supply chain disruption are factors in the substantial rise of crude prices. The Organization of the Petroleum Exporting Countries (OPEC) not loosening the taps enough to satisfy consumption levels has also contributed – of course, instead of pleading with the 13-member cartel to ramp up output, President Biden could have urged American companies to “drill, baby, drill.”

Unfortunately for Biden and his team, there is not a vast global conspiracy among oil and gas giants to hurt cash-strapped motorists. It is the fundamentals driving current conditions.

Cries and Whispers

This past summer, Biden weighed in on the labor shortage impacting the post-crisis economic recovery. In a bizarre moment, the president started whispering in front of reporters, telling employers to "pay them more," effectively blaming businesses for not attracting talent. Companies had responded to the paucity of workers by raising wages by nearly 5% in 2021, only for these gains to be erased by Bidenflation's near 40-year high.

Over the last year, a new phenomenon has risen: The Great Resignation. In November, a record 4.53 million people quit their jobs in an environment with approximately 10.5 million job openings. The labor market has certainly titled in favor of workers, and experts anticipate this will be the norm for at least another year. But what has been driving this trend? There are many factors at hand: employee burnout, more employment opportunities, and perhaps acclimating to a life of free money from the state.

Whatever the case may be, solutions to worker shortages are ostensibly more than whispering “pay them more.” A broad array of studies has alluded to workers demanding greater flexibility, remote work, and more meaning in their day-to-day tasks. Plus, as Liberty Nation’s Keelin Ferris reported in December: “GenZ is leading the charge in the ‘antiwork’ movement as more young adults are getting fed up and quitting their jobs.”

Thinking Different Thoughts

Nobody expects politicians to admit wrongdoing. This contradicts leaders’ nature. Rather than concede malfeasance, they will offer different prescriptions to the challenges ahead, even if their nostrums contradict their original proposals. It is comparable to another passage in the Carroll book: “Why, sometimes I've believed as many as six impossible things before breakfast.” Biden and his administration have had moments of candor, noting that his pandemic benefits contributed to the worker shortage or that the Build Back Better agenda has added to inflation pressures. That said, it is impossible for all the president’s men to utter the truth because doing so would shine a negative spotlight on the smartest men and women inside the Swamp. But there is no denying reality, no matter how much they try to expand the lie in the hopes of having more people believe the mendacity.

~ Read more from Andrew Moran.