President Joe Biden's second State of the Union address, at least regarding economics, was little more than an old man shrieking to the heavens about expensive airline baggage fees and corporations taking advantage of their customers. From screaming about "frisizhnjubs" to shouting incorrect or misleading statements as if they were gospel, it was quite a memorable hour. When jobs data and gas prices were the least offensive remarks, it becomes evident that Press Secretary Karine Jean-Pierre was right when she told reporters that Biden’s fingerprints would be all over his latest oration.
Malarkey at the State of the Union
The first economic-related statement was employment. He claimed that his administration created a record 12 million new jobs, "more jobs created in two years than any president has ever created in four years." As Liberty Nation has noted repeatedly, this is misleading because these positions were lost and then returned from the coronavirus pandemic. If this were an accurate depiction of what has transpired since January 2021, then you could say that former President Donald Trump had the best labor record because more than 12 million jobs were "created" during a seven-month span!
The next statement referenced the manufacturing sector, an industry that is in a recession. The president noted, “we've already created 800,000 good-paying manufacturing jobs, the fastest growth in 40 years." Not quite. Like the overall US labor market, his figure is misleading. Before the coronavirus pandemic, there were approximately 12.8 million manufacturing jobs, which cratered to 11.414 million by April 2020. Today, there are nearly 13 million manufacturing positions, meaning that he might only be responsible for 200,000 since the rest were returned.
Gasoline prices are down roughly $1.50 from their peak in June. However, President Biden failed to mention that they are still significantly higher than when he took office. According to the White House, the administration wiping out 40% of the Strategic Petroleum Reserve only accounted for a 40-cent reduction in the pain at the pump. So, what about the rest? For the most part, it has been global petroleum markets, recession fears, China's lockdowns, and lackluster domestic production numbers as the main contributors to the drop in energy prices.
The Democrats keep championing the CHIPS and Science Act as a bipartisan accomplishment that will forever support the US supply chain and stabilize economic conditions. The reason? US taxpayers will be forced to fund more than $250 billion in corporate handouts to Fortune 500 companies. Critics contend that there is no guarantee that this money will not be allocated to tech firms' business operations in China and other foreign markets. The policy's purpose is also misguided because the US currently maintains nearly 50% of the global semiconductor market share, with Beijing sitting at 5%.
On the one hand, Biden wants to give billions in subsidies to wealthy corporations. On the other, he wants to impose a billionaire tax, quadruple the tax on stock buybacks, and force the affluent to “pay their fair share.” What’s the deal? A billionaire wealth tax is unlikely to advance in the Republican-controlled House, especially if it mirrors the former proposal of including unrealized capital gains. Meanwhile, a 4% excise penalty on stock buybacks is nothing more than a gimmick since lawmakers do not seem to understand what purpose they serve. Essentially, share buybacks suggest that corporations believe their stocks have been steeply discounted and signal that there are too few investments or projects in the near future.
Perhaps it is an economics discussion, but Biden celebrating capping Insulin at $35 a dose might result in long-term consequences, mainly because price controls never work. If there is one uniform opinion in the field of economics, it is that instituting an artificial price on goods and services is a recipe for disaster, be it in housing or pharmaceuticals. So, the verdict could still be out on this so-called achievement.
Joe Biden (Photo by Chip Somodevilla/Getty Images)
The best part of the State of the Union address was Biden admitting that the US will need oil and gas for at least another decade, which made Republicans laugh because the president has promised the fossil fuel industry's destruction since the 2020 presidential campaign. He then chastised Big Oil for generating $200 billion in profit without increasing domestic production to keep prices down. Biden claimed that these companies told him that they were not investing in new output capacity because they were afraid he would shut them down. Well, their consternation is completely justified considering what the current administration has been doing to the fossil fuel sector.
The most bizarre parts of the speech came when he complained about airline baggage fees and non-compete agreements for fast-food workers. On the first issue, it is safe to say that consumers are more concerned about egg prices skyrocketing 60% than this annoyance in modern commerce. On the second, Biden believes this is a prevalent practice in the fast-food sector, forcing cashiers and line cooks at burger joints to sign these contracts like they were CEOs of multi-billion-dollar corporations. While the industry does maintain non-competes, they mainly apply to individuals who have been privy to trade secrets, not a 19-year-old earning minimum wage.
Name Me One!
During brief moments of his State of the Union speech, President Biden started shouting about naming him a world leader who would change places with Chinese President Xi Jinping and how he would veto any bill that would "raise the cost of frisizhnjubs." As expected, the left-leaning mainstream media proclaimed that this was a victory for the 46th president since it was an unofficial start to his 2024 bid. Perhaps the bar needed to be set higher, or maybe the talking heads were too busy scrolling through their Twitter feeds. But how can mumbling gibberish appear to be a successful presidential speech?
