It's Official: Biden Trashed the Economy

Let’s stick with the Big Picture, even though it’s nothing nice to look at.

The Federal Reserve Bank of New York just published its monthly survey of manufacturing activity in the Empire State.

Here’s what it all means in language for the layman:

Business activity declined sharply in New York State, according to firms responding to the August 2022 Empire State Manufacturing Survey. The headline general business conditions index plummeted forty-two points to -31.3. New orders and shipments plunged, and unfilled orders declined. Delivery times held steady for the first time in nearly two years, and inventories edged higher. Labor market indicators pointed to a small increase in employment, but a decline in the average workweek.

If New York was an emergency room patient, this is when the doc would shout for the crash cart.

“Looking ahead,” the NY Fed reported, “firms did not expect much improvement in business conditions over the next six months.”

Unless we’re talking about debt or inflation, I really don’t like it when the lines all point down. I especially don’t like it when the descending line matches where we were during the depths of the Great Recession.

Technically, things were worse in March of 2020, but that was the Great Unnecessary Recession — a brutal but brief downturn caused by government overreaction to the COVID-19 pandemic.

There were always going to be medium-term issues getting the supply chain kinks worked out; you can’t just order global and national and local trade to shut down for a few weeks and expect business to return to normal at once.

But we’ve had more than two years to improve the business climate and get the jobs back. There’s nothing fundamentally wrong with our economy — so why is it stumbling?

Two words: Government and more government.

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The economy was bouncing back nicely if not always evenly, thanks to those snarled supply chains, before January 20, 2021.

On his first day in office, Presidentish Joe Biden declared war on domestic energy production. U.S. oil production has yet to recover to pre-pandemic levels and, so long as the Democrats are in power, it may never.

On the plus side, if you’ll allow me to call it that, oil and gas prices are coming down…because economic activity is slowing down.

So far this year, U.S. productivity — the real measure of the goods and services we’re producing — posted its “biggest ever annual drop in second quarter” of 2022.

The problem with Gross Domestic Product as a measure of the economy is that it includes government spending. So if Washington, in a purely imaginary scenario, were to conjure up a couple trillion dollars, GDP would magically increase by that amount. Even though no new goods or services were created.

That’s why, when ShadowStats removes the funny money, Biden’s “recovery” doesn’t look like much of a recovery:

Everything started to go downhill earlier this year, as those stimulus dollars began to work their way more fully into the economy and the Democrats’ reinvigorated regulatory state clamped down on productivity.

We have yet to see exactly what vastly expanding the IRS will do to productivity, but “nothing good” is the best possible outcome.

Biden’s budgets make Trump’s and (almost) Obama’s look tame in comparison, which means a bare minimum of $3 trillion in new deficit spending in his last two years in office.

Inflation is when there are more dollars chasing the same number of goods.

Bidenflation is when there are more dollars chasing even fewer goods.

I’d been hoping that the economic slowdown would ease inflation, but the more I look at Biden’s spending and regulatory climate, the harder it is to hold onto that hope.

I’m starting the martinis a little early this afternoon — care to join me?