Biden's Economy?

[Doctor CamNC4Me]

Rents:



That’s not really the win you think it is. Rents are outrageous, but I’m not sure how a sitting President can claim success or failure of rental prices in, say, SF. Speaking of which:

https://www.apartments.com/san-francisc ... 2Okwguu6nB

Are you going to make Biden responsible for a 1-br in SF @ $5,000/month? I’m not, but I’m certainly not going to give him credit if rents drop a $100, either. Unless the feds, under his direction, build 10M units under a New New Deal assigning credit to him for rents it’s just politicking.

- Doc

The meme was about gas prices, which have been dropping as oil has been released by strategic reserves from the US and other countries, which only happened at the behest of Biden. But I'm really just posting this to piss off ajax.

I wasn’t responding to your meme. I was responding to your link about rents being down, but I believe your meme post snuck in there as I was responding, hence the confusion.

Regardless, it looks like Ajax isn’t the only Republican who likes to use sock puppets and lie their asses off to score political points (I take the post to be semi-economy related):



If GOPhers aren’t lying through their teeth I just assume they died because as soon as they draw a breath they start lying again.

- Doc

[ajax18]

Just another lie huh, DocCam? There's no real inflation and if there is, it's a great benefit to us right?

Bidenflation Much Worse Than Expected: Consumer Prices Rise 9.1%

Inflation in the United States, already at 40 year highs, rose to an annual rate of 9.1 percent in June, the Department of Labor said Wednesday. This is the highest rate since 1981.



Compared with a month earlier, the Bureau of Labor Statistics’ Consumer Price Index was up 1.3 percent.

Economists had expected CPI to rise at an annual rate of 8.8 percent, up from 8.6 percent in May. They expected a month-over-month increase of 1.1 percent.

Inflation has American families hard by raising prices for everyday necessities like food, gasoline, housing, transportation, and utilities. Huge increases in the price of gasoline in June, which hit new all-time highs several times during the month, started to sap household and business spending on other items.

Economists look to a sub-category of inflation that excludes food and fuel prices as a better guide to future inflation than the headline number. This was up 5.9 percent in June compared with 12 months earlier. For the month it rose 0.7 percent. Both were higher rates of inflation than expected.

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This was the 13th straight month of inflation running higher than five percent, meaning this year’s price increases are building on top of the decades high increases of last year.

Grocery store prices were up 12.2 percent annually and one percent for the month. Energy prices are up 41.6 percent annually and 7.5 percent since May. Gasoline prices jumped 11.2 percent in June compared with May, for a 59.9 percent year-over-year increase.

There had been some hope that inflation would let up in apparel, as some big retailers have said they were discounting to clear inventory. Prices of clothing rose 0.8 percent in the month, up 5,2 percent compared with a year ago.

Although many economists and anti-Trump journalists claimed President Donald Trump’s tariffs would raise prices, consumer prices remained low throughout his administration. Trump’s tariffs turned out not to be taxes on consumers. Instead, they were absorbed by Chinese producers and exporters and the profit margins of most large U.S. companies.

Inflation only began to accelerate last March after years in which it typically came in below the Fed’s two percent target. The Fed had decided to keep interest rates low in 2021 although the economy was recovering at a faster than expected rate. What’s more, the Biden administration pushed through billions of dollars of deficit spending in the American Rescue Plan. These combined to fuel demand for goods and services faster than supplies could expand, pushing up prices.

Federal Reserve chief Jerome Powell, following the advice of many of the economists on the central bank’s staff, initially claimed that inflation was due to transitory factors. Fed officials forecast that inflation would fall in the latter half of 2021, predicting that supply chains would swiftly unsnarl and a rebalancing of consumer demand from goods to services would relieve pricing pressure. The Biden administration, under the tutelage of former Fed chair and now Treasury Secretary Janet Yellen, largely followed suit and continued to press for even more spending.

Establishment media largely echoed these views, portraying the surge in inflation as a temporary shift higher due to the reopening of the economy. Many establishment outlets described fears of longer-lasting inflation as the product of partisan fear-monger and claimed they had no rational basis. Some of the same outlets that had claimed—without evidence—that Trump’s tariffs were raising prices, insisted price increases under Biden were no big deal. Some said that a silver lining of inflation would be higher wages. In fact, prices have been rising faster than wages, lowering the standard of living for many American families, and the hardest hit have been lower-income Americans. Middle-class and wealthier Americans have suffered as well, as the value of savings have been eaten away by inflation.

This government and establishment media consensus proved calamitous. Inflation continued to soar, sapping the credibility of the Biden administration and the central bank when it came to inflation. Late last year, Fed officials dropped the word “transitory” from their vocabulary and began signaling that they would raise interest rates this year. Capitol Hill Democrats were forced to abandon ambitions for socially-transformative huge spending on so-called “human infrastructure.”

The public’s perception of President Biden’s competence has collapsed. Many Americans interpreted the administration’s confidence that inflation would pass to be a sign that it did not care about the hardships inflicted upon families paying more for gasoline, groceries and Fourth of July cookouts. Recent polls have shown that Biden is now the least popular president in 75 years.

The Biden administration and Capitol Hill Democrats have sought to blame higher prices on corporate greed and price gouging—an idea that has largely been met with mockery, even by self-described liberal economics columnists like the Washington Post‘s Catherine Rampell. In fact, corporate profits declined 2.2 percent in the first quarter of this, a $63.8 billion decline, indicating that businesses are also being squeezed by inflation. The outlook for the future of business conditions among owners of small businesses fell to the worst level in 48 years in June, the National Federation of Independent Business said Tuesday.

Consumer sentiment, as measured by the widely followed University of Michigan index, has sunk to the worst level ever. The economy contracted in the first quarter of the year and looks set to have contracted again in the second quarter. Consumer spending grew just 1.8 percent in the first three months of the year and just 0.2 percent in May. Many economists expect a similarly week read for June consumer spending. Those numbers trail inflation, an indication that real spending has fallen. Consumers are spending more money but purchasing fewer goods and services due to high prices.

The Federal Reserve has pivoted to inflation-fighting mode. The Fed raised its target rate by 75 basis points in June, the biggest single-meeting hike since 1994. It is expected that it will implement another 75 basis point increase at its July meeting in two weeks. Following the June CPI report, futures markets implied very strong odds that the Fed would increase rates by 75 basis points in September, as well. Previously, the fed funds futures market had seen a smaller, 50 basis point hike as more likely at that meeting.

https://www.breitbart.com/economy/2022/ ... -rise-9-1/

[ajax18]

Everybody just calm down. This is only transitory. We just need more government stimulus through passing build back better and to import more poverty and unskilled labor from Latin America. Let's get the pregnant Latinas and their toddlers dispersed throughout the country, onto the dole, and out voting ASAP. The midterm elections are on the line.

[canpakes]

Although many economists and anti-Trump journalists claimed President Donald Trump’s tariffs would raise prices, consumer prices remained low throughout his administration. Trump’s tariffs turned out not to be taxes on consumers. Instead, they were absorbed by Chinese producers and exporters and the profit margins of most large U.S. companies.

I like the simplicity of this opinion. Even lacking any data to back that statement up, it follows that the current inflationary spike is occurring because companies have changed their mind and now just want to make gobs of profit, and have raised prices for no reason at all, after absorbing past fluctuations out of goodwill.

I think that we have this all figured out, thanks to Brietbart.

[Hawkeye]

Although many economists and anti-Trump journalists claimed President Donald Trump’s tariffs would raise prices, consumer prices remained low throughout his administration. Trump’s tariffs turned out not to be taxes on consumers. Instead, they were absorbed by Chinese producers and exporters and the profit margins of most large U.S. companies.

I like the simplicity of this opinion. Even lacking any data to back that statement up, it follows that the current inflationary spike is occurring because companies have changed their mind and now just want to make gobs of profit, and have raised prices for no reason at all, after absorbing past fluctuations out of goodwill.

I think that we have this all figured out, thanks to Brietbart.

Big companies had no choice but to absorb the cost of Trump's tarrifs. The tarrifs provided an immediate incentive to improve Chinese behavior in trade. They don't need to be permanent. They were mostly a negotiating tool and they worked. Above all Trump was true to his economic nationalist, America first agenda that he ran on.

[Doctor CamNC4Me]

Has Ajax ever considered that someone like John Carney is simply writing propaganda and producing an essay that gives people like him what they want to read? Inflation has been explained, along with various charts, graphics, and whatnot, but he doesn't read. He only reads what confirms his notions. While his author claimed "corporate profits declined 2.2%" (where did he get those numbers??) Bloomberg states:

Analysts have upped their 2022 forecasts over the past month. They expect companies in the S&P 500 to see profits grow by 10.6%, up from 10% a month ago and 8.7% at the start of the year, according to Bloomberg Intelligence.

None of this matters, though. Biden has an Inflation Button in his office and just loves to mash it as VP Harris spoon feeds him baby formula according to GOPher halfwits.

- Doc

[canpakes]

Big companies had no choice but to absorb the cost of Trump's tarrifs.

You’ve provided no data that supports a claim that companies simply “absorbed” tarrifs of up to 25%, with no effect on consumer prices. I’d think that you’d be eager to do so, given the implications of previous price gouging that such a claim suggests.

In the meantime, there’s this opposing bit from Reason -

Tariffs raise prices. That is literally the thing they do.

Politicians often try to obscure that basic fact by talking about tariffs' second-order effects. They say that applying taxes to imported goods will help protect domestic manufacturers—by raising prices on foreign-made goods, making them less competitive. Or, as former President Donald Trump frequently did, they might say that tariffs can promote national security—by making foreign goods more expensive, encouraging investment in domestic industries.

The extent to which any of those second-order effects actually happen is subject to debate, and the past few years suggest that the trade-offs involved are not worth it. But if you leave aside that political debate, there's still a basic, inescapable fact: Tariffs, by design, raise prices.

After nearly 16 months in office, facing historically high price increases, the Biden administration seems to have finally discovered how tariffs work.

Asked Sunday on CNN's State of the Nation whether the administration would consider rolling back some tariffs to fight inflation, Commerce Secretary Gina Raimondo admitted that it "may make sense" to do that.

Don't get too excited. With her previous breath, Raimondo suggested that the Trump-imposed tariffs on steel and aluminum would remain in place "because we need to protect American workers and we need to protect our steel industry; it's a matter of national security."

There's that typical tariff obfuscation. What Raimondo is really saying is that the administration believes mandating higher prices for steel and aluminum—and thus higher prices on every American, and every American business, that consumes steel and aluminum—is more important than helping to bring down inflation. And that's just days after her boss assured us that he would "take every practical step to make things more affordable for families."

Still, Raimondo added that "there are other products, you know, household goods, bicycles, et cetera, and it may make sense. And I know the president is looking at that."

The set of tariffs imposed by Trump and maintained by Biden—including those on steel and aluminum, along with a host of imports from China—is applied to approximately $280 billion of imports every year. Those import taxes add about $51 billion annually to Americans' consumer costs, according to an analysis by the American Action Forum, a pro-market think tank:

(See graph at Source: American Action Forum - https://www.americanactionforum.org/res ... f-tariffs/ )

As the above chart shows, the tariffs imposed on goods imported from China under Section 301 of the Trade Act of 1974 are much costlier than the more well-publicized tariffs on steel and aluminum (and on their derivative parts). They also apply to a far wider range of consumer goods than most people probably realize, covering everything from bicycles to car parts, camping gear to children's toys, sports equipment to clothing, and a whole lot more.

About two-thirds of all imports from China are now subject to tariffs when they enter the United States, with the average tariff being 19.3 percent. That's six times higher than the average tariff on Chinese-made imports before Trump's haphazard trade war began.

Thanks to all those tariffs on consumer goods, the federal government has collected record levels of tax revenue from tariffs in recent years. And American consumers have seen huge price increases.

Because, yes, tariffs raise prices. That's what they do.

Of course, ending tariffs on Chinese imports won't single-handedly solve the inflation problem. There's some debate over the extent to which tariffs are contributing to inflation. Ed Gresser, a former assistant U.S. Trade Representative who is currently the vice president and director for trade and global markets at the Progressive Policy Institute, a center-left think tank, pegs the figure at about 0.5 percent annually. Experts at the Peterson Institute for International Economics (PIIE), a trade-focused think tank, say it's about 1 percent.

But there's general agreement that tariffs are having some effect, even if a marginal one, on prices. "Tariffs make imports more expensive; importers often pass these additional costs through to consumers, leading to higher prices and inflationary pressure," PIIE concludes in its analysis of the link between tariffs and inflation.

In a speech last month, Biden promised that corralling inflation was his "top domestic priority." If that's true, the tariffs have to go. All of them. No more obfuscation about the alleged merits of steel and aluminum protectionism versus higher prices. Either combating inflation is truly the administration's top priority, or it isn't.

Raimondo's comments on Sunday suggest it isn't yet. But at least the White House is finally, slowly, admitting that tariffs raise prices.

That's the thing they do.
https://reason.com/2022/06/06/tariffs-a ... ake-sense/

Then, there’s this:

“The results suggest that markets interpreted the impact of the tariffs as much more negative than what economists initially estimated,” said David Weinstein in an interview. “Part of the reason stems from the fact that the U.S. tariffs rose significantly in 2019, and the earlier studies didn’t include these higher rates. Moreover, the new analysis suggests that the tariffs’ impact on productivity is likely to be a factor holding down U.S. growth rates. The tariffs protect the least efficient firms and reduced their incentives to innovate while hurting the most successful U.S. firms, reducing their ability to innovate.”

https://www.nber.org/papers/w28758?utm_ ... rce=ntwg25

As for your other claim:

The tarrifs provided an immediate incentive to improve Chinese behavior in trade. They don't need to be permanent. They were mostly a negotiating tool and they worked. Above all Trump was true to his economic nationalist, America first agenda that he ran on.

… you can toss that one into the bin, as well. From an article in Fortune:

“ In 2019, after months of negotiations, Washington and Beijing signed a “Phase One” trade agreement, in which China agreed to expand its purchases of U.S. goods by $200 billion by the end of 2021, using the 2017 level of imports as a baseline. In exchange, the U.S. reduced some tariffs—which covered over $550 billion worth of imports at the time—and delayed plans to impose new import duties.

The U.S. maintains an average tariff of 19.3% on roughly two-thirds of all China-sourced goods, the Peterson Institute for International Economics (PIIE) says, or on roughly $335 billion worth of goods. Yet, according to Chad Bown, senior fellow at PIIE, China had fulfilled none of its $200 billion obligation as of March.

Tai remains skeptical that China will follow through on its commitments.

“The United States has repeatedly sought and obtained commitments from China, only to find that lasting change remains elusive,” Tai said in her testimony to the Senate, arguing that the U.S. needs to “use all available tools, and develop new tools, to defend our economic interests and values.”

Tai has earlier admitted that trade negotiations on a potential “Phase Two” deal with China had stalled, and suggested the need for a new set of tools to preserve the U.S.’s “global competitive edge.”
https://fortune.com/2022/06/23/ustr-kat ... ation/amp/


… aaaaannd this:


“Managed trade has failed once again.

The so-called "phase one" trade deal inked in December 2019 by former President Donald Trump and Chinese President Xi Jinping might have put an end to the spiraling trade war between the two countries, but the agreement did not result in China buying more American goods, as both leaders promised it would. In fact, during the two years covered by the deal, China imported fewer American goods than before the trade war began—meaning that the deal did not even succeed at patching up the damage caused by Trump's bellicose trade policies.

"After two years of escalating tariffs and rhetoric about economic decoupling, the deal did little to reduce the uncertainty discouraging the business investment needed to restart U.S. exports," writes Chad Bown, a senior fellow at the Peterson Institute for International Economics, a pro-trade think tank.”
https://reason.com/2022/02/09/trumps-ph ... trade-war/


So much for Trump’s ‘America First’ claims.

[Res Ipsa]

I do love Ajaxistan, where raising business costs through taxes and regulation result in deadly inflation, but raising business costs through forcing them to pay tariffs results in businesses magically absorbing the increased costs without ever passing them on to consumers.

[Vēritās]

Ajax really needs to just stick to whining about inflation while he still can. Bringing in Trump's tariffs as a comparison is just a set up for another epic fail.

May 13, 2019
This chart from Goldman Sachs shows tariffs are raising prices for consumers and it could get worse

“New evidence on the effects of the 2018 tariff rounds from two detailed academic studies points to larger effects on US consumer prices than we had previously estimated, admitted Goldman Sachs Chief Economist Jan Hatzius, in a note to clients Saturday. “First, the costs of US tariffs have fallen entirely on US businesses and households, with no clear reduction in the prices charged by Chinese exporters. Second, the effects of the tariffs have spilled over noticeably to the prices charged by US producers competing with tariff-affected goods.”

May 14, 2019
Consumers are already seeing price hikes from the last round of Trump’s tariffs

When the additional tariff costs consumers paid in the latter part of last year are annualized, the cost per household is about $419, said David Weinstein, a professor of economics at Columbia University who coauthored a working paper released by London’s Centre for Economic Policy Research on the effect of the Trump administration’s 2018 trade policy on U.S. prices.
The tariffs to date also have hit the home-building industry, and already have added $1 billion to the costs of U.S. housing construction, according to the National Assn. of Home Builders. That could jump to $2.5 billion with the latest hike in tariffs by the Trump administration, the trade group said.

May 19, 2019
Higher Inflation, Slower Job Growth and Other Ways Tariffs Hit the Economy

The U.S.’s existing and threatened tariffs on Chinese goods could cut 0.75% from gross domestic product growth, according to an estimate from the Tax Foundation. It will also hit employment and corporate profits and trigger higher inflation, wrote analysts from Ned Davis Research on Wednesday.

Last week, U.S. tariffs on $200 billion of Chinese imports were hiked to 25%, from 10% previously, on top of a 25% tariff on another $50 billion of goods in place since last year. The Trump administration has threatened to slap a 25% duty on the remaining nearly $300 billion of Chinese goods coming into the U.S. annually as well.

If that is enacted, everything from industrial machinery to auto parts to consumer products like iPhones, footwear, and furniture will be subject to the 25% rate. China has responded with retaliatory tariffs on U.S. goods like soybeans and other agricultural products.

Most experts see a negative impact on both countries’ economies. “Tariffs result in higher inflation, increased policy uncertainly, slower capex and employment growth, and weaker productivity growth,” Ned Davis Research’s Veneta Dimitrova, senior U.S. economist, and Joe Kalish, chief global macro strategist, wrote on Wednesday.

Are tariffs bad for growth? Yes, say five decades of data from 150 countries

As Doc already noted, we've beaten this to death with hard data, charts, and colored graphics for our resident racist who can't even talk about inflation without bashing brown people. We've shown that Trump's policies affected the record bankruptcy rate of farmers during his short lived Presidency, his restrictions on chip manufacturers produced a massive shortage causing car prices to skyrocket, his tariffs on China caused the price of household appliances to skyrocket, the price of Lumber literally doubled under his watch, causing the price of housing to skyrocket, his efforts to coerce the fed to keep rate at record lows added to inflationary pressures, his pressuring of Saudi to decrease oil production worked as intended, making it more difficult for them to ramp up production to the levels needed, etc etc.

[Vēritās]

According to Alan Greenspan and the WSJ, official CPI figures overshoot real inflation by 2-5%.

At least that's what they were arguing back in 2019 when trump was President.

The Federal Reserve Is Flying Blind on Inflation

Even Alan Greenspan, erstwhile maestro, now acknowledges ‘bias in the statistics.’

Writing in The Wall Street Journal's "Inside View" last week, Andy Kessler says he is "convinced that all of the common measures overshoot by at least 2 percentage points, and maybe even 5 or more. That's because of the flaw in the Bureau of Labor Statistics' hedonic adjustment, which totally misses the way the cost of technology declines over time." Even Alan Greenspan, that nonagenarian technophobe, said in a Wharton interview last month, "We have a problem with measuring inflation... because products are continually changing." He baldly said, "You're getting statistics which are not correct," adding that, "the 2% inflation rate as currently measured is the equivalent of zero for actually what consumers are buying."

Later after Biden got elected Greenspan would argue that inflation is actually much higher than the official CPI.