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Stephen Moore: The Biden Economy Threatens US Prosperity

Renowned economics expert Stephen Moore talks the Biden economy and the central bank.

Editor’s Note: This is part one in a three-part series. Today, Liberty Nation’s Andrew Moran and noted economist Stephen Moore talk Bidenomics and the Federal Reserve.

President Joe Biden is close to completing his first year in the Oval Office, while Federal Reserve Chair Jerome Powell is about to start his second term at the helm of the U.S. central bank. How have Bidenomics and the Powell putsch supported the economic recovery in 2021? What will they accomplish heading into 2022? Stephen Moore, the former member of The Wall Street Journal editorial board and noted author of Trumponomics, spoke with Liberty Nation to discuss the state of the Biden economy and the Federal Reserve’s record during and after the coronavirus pandemic and what they mean for U.S. prosperity.

Bidenomics: A Report Card

New Banner Liberty Nation Exclusive 3Today, the U.S. economy is being bombarded from all fronts: soaring inflation, a global supply chain crisis, a labor shortage, a concerning energy crisis, and so many more economic woes. So, has the Biden White House done anything right since Inauguration Day?

“Not much,” said Stephen Moore.

Moore, an economic adviser to Donald Trump’s 2016 presidential campaign, told Liberty Nation the previous administration had manufactured one of the best economies in modern history, from record-low unemployment to big wage gains for average middle-class families.

“We had the economy, really all systems were go,” stated Moore, adding that tax cuts, deregulation, U.S. energy independence, and the overall America First agenda led to many economic gains. “We put the interests of American workers and business first, what a concept, right?”

Fast forward to the present, and conditions are vastly different. “Biden has come in and really reversed a lot of those policies,” Moore, a celebrated columnist who has worked at many influential think tanks in his career, noted. He to the dramatic increase in the regulatory state, including the Environmental Protection Agency (EPA) shutting down energy projects and federal regulators in the finance sector cracking down on banking and investment.

“So, I’m very troubled by the direction of things, and it didn’t take long for the prosperity we saw to really be jeopardized,” Moore purported. “We’re now seeing inflation rates higher than we’ve seen in 30 years. I’m really concerned about what’s happened with the number of workers that are leaving the labor force, creating real problems of people willing to collect welfare checks and government benefits rather than working. That’s a real problem for the economy going forward.”

A Powell Pivot

The Federal Reserve started its tapering of the $120-billion-a-month pandemic-era quantitative easing program. It could also begin raising interest rates in June 2022, although there have been some signals and expectations that the Fed might pull the trigger on a rate hike sooner amid surging inflation. But the Fed is in a tough situation because tapering could affect economic growth, and not trimming QE would facilitate inflation. Whatever the case may be, Moore believes that the Eccles Building “has been behind the curve for now six to nine months on dealing with this inflation problem.”

GettyImages-598047032 Stephen Moore

Stephen Moore (Photo By Tom Williams/CQ Roll Call)

“And it’s almost like they had their head in the sand on seeing what American people saw every single day, right? Which was that the prices of gasoline, the price of food, the prices of travel, all of these things were going up in price,” Moore averred.

Despite the reality of the situation, Moore noted, officials insisted that inflation was transitory. Powell and Treasury Secretary Janet Yellen recently retired the word. Of course, this concession occurred after contending for so long that there would be no inflation and then that it would be here but not become a permanent fixture in the U.S. economy.

“Well, now we’re just seeing that the inflation problem is a tax,” he said. “It’s a tax on the American people. It’s also what I call the cruelest tax. It’s a tax that affects lowest income people the most.”

Moore acknowledged that the institution is finally taking inflation seriously, but he has not seen any measures being employed to combat the advancing consumer price index (CPI), the producer price index (PPI), or the personal consumption expenditures (PCE) price index. Indeed, despite tapering efforts, the Fed is still anticipated to add hundreds of billions of dollars to the balance sheet by the summer.

Will the White House, Fed Get Lucky?

One of the chief factors in increasing inflation is energy. Crude oil, natural gas, gasoline, and heating oil have advanced significantly this year, leading to higher prices at the pump and swelling heating bills. However, with the Omicron variant fears seeping into every crevice of the financial markets, there has been a tremendous selloff in the energy commodities market. This has allowed the U.S. to witness a two-cent dip in gas prices, prompting the Biden administration to take a victory lap. But if this is a sign of easing inflation, it will not be thanks to the White House or the central bank. It is simply market elements, especially considering the fiscal and monetary side of public policy consists of injecting money into the economy. Like the vaccine shortly after the election, Biden may get lucky in spite of his Build Back Better agenda.

~ Read more from Andrew Moran.

Read More From Andrew Moran

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