Bidenomics = 20.00 McDonald's Adult Happy Meal

@StumpTownStu

 I actually think Gavin would be easy to run against with the way he wrecked Ca. and San Fransicko. Hard to imagine the US would want a horror show like that State has currently.

@ABooksNightmare

 Or worse, smaller snickers at 5.00 each.

IMPACT OF INFLATION ON ORDINARY PEOPLE

The results of the President’s fiscal folly were predictable. Since Joe Biden took office, overall prices are up 19.4%, and it costs American families $11,400 more per year just to maintain the quality-of-life they had in January 2021.

The high cost-of-living is even forcing one-in-eight retirees to reenter the job market, according to a recent survey. As a retired nurse told Fox News, “If I want to continue to live my lifestyle, I needed to probably add a few more dollars to my budget. And so I felt like I had to go back to work.”

Here is how much more Bidenomics is costing families in a few selected states:

• Wisconsin: $10,065 more annually
• Ohio: $9,884 more annually
• Pennsylvania: $9,404 more annually
• Montana: $12,216 more annually
• Nevada: $12,859 more annually

Everything costs more because of Bidenomics, particularly a trip to the grocery store. As the old joke goes, with the price of food these days, it’s almost cheaper to eat money. But for working Americans, it’s no laughing matter. According to figures from the Bureau of Labor Statistics (BLS), since Joe Biden came into office, Americans are paying 26% more for chicken, 23% more for American cheese, 30% more for ground beef, 103%(!) more for eggs, 12% more for whole milk, 14% more for fruits and vegetables, and 24% more for potatoes.

@Raiders22

 Lets really talk about this topic, not stats from three years because that is not really discussing the topic or gaining an understanding as to why.

So what baffles me and destroys your Biden blaming is that based only on numbers, stats, dollars the contention of this being so fast is completely implausible.

How much additional spending has taken place during Biden? Of course Biden is not the only politician nor do the DEMS own congress so spending is from ALL politicians and not since Clinton has government seemed to care about budgets or spending. This means Trump was not concerned, his admin was responsible for spending and so was Obama and so was Bush. Obama, Trump and Bush had the FED keeping rates bottled and that made spending less "expensive" but all admins have spent and that chart has sloped higher for over two decades so blaming Biden seems partisan and shallow.

The FED added liquidity to the system strongly since 2008-ish and did not slow until Biden's second year, and in relative terms they added multiples during Trump and continued during Biden. I dont think the FED actions really moved inflation that we see now and Ive said this 100 times ad nauseum. If the FED going from near zero to 4.5T from 2008 to 2014 did not move the inflation needle that is a 3x increase and there was zero inflation move. The government was deficit spending strongly from 2008 and into 2011 to 2014 not really slowing at all. Then the FED stayed put until covid and that meant SEVEN years of extended liquidity with zero inflation movement. When they almost doubled the liquidity again during Trump's last year and Biden's first year the impact did not budge inflation and we know why that was but in relative terms the percentage increase from 4.5 to 8.5T eventually took inflation from zero/negative to where we are now. How can that be when they tried for 15 years to ease inflation up with no result?

The government spending increase issue is of course of concern but also relative to the previous twenty years does that increase especially with regards to CONSUMER deficit spending does that somehow ignite inflation in a short short period of time when the FED and the USG could not muster inflation with massive liquidity and spending for 15 years?

It does not add up nor does the measure of consumer spending over the last two years equate to a FAST spike as are experiencing now. If your theory was even close to accurate, the recession in 2009-2011 and the programs we saw then plus the 3x in FED liquidity would have moved inflation to ANY degree but it did not. We had massive spending programs and schemes but those did not move inflation. There is much more to the inflation narrative than flippant phrases and blame, We couldnt go from zero to 2% with all that spending and liquidity and having it stay at extended levels for almost 15 years and yet we moved from deflation to here in two years with say even a full 2x increase. Tha math just fails, there is no way we can lay full blame on just politicians for this, maybe in part but for sure not completely.

@wallstreetcappers

 It is an excerpt on just the numbers. It is not my theory and I do not think it is his theory.  It is just showing the numbers.  

Like they say:

Words talk, Numbers scream.

But when the pundits came up with a play on 'Reaganomics' and started 'Bidenomics' --  the Biden administration should never have embraced that term, because it was not meant kindly.

Now, as I have stated many times you cannot absolve Congress nor the President in this spending issue.

BUT BIDEN is in charge and he is the one that is going to be held accountable at the ballot box.  Absolutely he would be taking credit if things were going well with the economy -- so, the converse would apply as well.

If your contention is that Biden is not solely responsible for the spending -- it still does not work that way.

He could have vetoed every single spending bill.  Then he could at least say he tried.  But no, he not only signed them -- he advocated for them and even wanted more spending than he got.

So, IF HE DOES NOT do his part to curtail it, then he has to take the blame for it -- just as any other President would have to.

It may be human nature to simply look for a scapegoat when things go awry.  But the average person is not looking and trying to figure out the dynamics of the fiscal policies that caused it -- that is hard enough for those of us that have the background to try to nail it down and that is why there is so much disagreement about it.  That is also why you have so many differing ideas on how to fix it, or EVEN if it should be fixed.

The average guy is just going to care about his pocketbook and who is in CHARGE when things get more expensive and then remember that things were cheaper when the last guy was in charge.

So, while he may be 'partisan' in presenting the numbers; it is not, necessarily, 'shallow' because he is not trying to go in-depth on the exact causes, etc.

@Raiders22

 The last president who stood firm on spending was Clinton, nobody since him and even Clinton was not great. Before him Bush and especially Reagan were not against spending, its just what the spending was on that they cared about.

So saying Biden could have should have would have is silly since none of them could or should...its not how politicians function. The difference between a DEM and a REPUB is HOW the money is spent. Biden is a lifer loser but no way is it his onus to reign in spending, it is both sides and not one side or person that make it happen.

Price baskets are very volatile, I was looking at some historic PCE charts and reading up on the difference between CPI and PCE in terms of internal calculations and why one is different than the other and the PCE has gone up in various times when government spending was not out of standard deviation and it has gone down when spending is the same, I just do not think that prices are strongly influenced by government spending relative to total GDP. I also do not see in terms of real consumer spending, not a price index like CPI or PCE but total consumption from the US consumer that there is remotely enough DEMAND push to create this inflation and this fast. I think the root cause of inflation is based on the political bias of the person crafting the narrative. So your right wing sources are going to point to Biden, sites like ZH will blast Biden because that is the political bias narrative, liberal sources might deflect from Biden and point to covid regression spending. I see this inflation more about opportunity than a political narrative.

@wallstreetcappers

 It is good to look at it positively -- that is certainly a unique view.  

The average person is simply more interested in their pocketbook than opportunities for the politicians to push through their political agenda.

For sure, in hindsight it will look like Biden should have been more firm -- that view is far from silly.  It may not be solely his responsibility because he does not understand the ramifications -- or does not care for political reasons.  But just as Trump was responsible for hiring knucklehead advisers; Biden is responsible for the folks that allow him to go along with this nonsense.  It is far worse with Biden because he is not the one making these decisions anyway.  He is far past being able to do that -- which is very good.  On his best day, Biden would have been an economic failure as a President.  Now with others making 'his' decisions, it is pitiful.

So, no matter how you couch it, he has the responsibility to the people.  He is the last stop-gap measure, in a sense.  

The people will see him as failing them on their main concern.  Should they hold Congress more accountable?  Sure they should.  Will they?  Maybe...time will tell.

But even before the last talk by Powell the issue of Demand has been more and more of concern.

For example, even back then Chaar, from Lombard Odier was explaining why he thought the harder thing for the Fed to deal with was the demand portion -- as opposed, to the supply and the energy portions.

When you have a decent job growth market and retail sales doing well it is showing the signs of a growing economy.

But the issue becomes the service portion -- which is on the demand side for sure.  How can they deal with that?

Certainly he was trying to sum it up in a way most folks could understand -- but as he said this is coming from somewhere.  And it has to be from a strong economy -- people have jobs and money and are spending that money.

So, even if the energy prices goes up and adds to it -- the FED already is going to have a dicey job.  There is looking like a much lower probability of a 'soft landing' at this point.  A recession may be more likely and it can be argued is even needed somewhat.

That is making it very difficult to even say the FED will lower rates this year.  IT can very easily be argued they should be raising them.

Now, how the election timing calculus will play into that is a concern.  Maybe they wait until after the election to act.

So, yes, you may be right that a political narrative may play a part in this -- even though it should be completely apolitical.

@Raiders22

 Here is the problem facing the FED, you cannot stimulate supply and suppress demand at the same time via interest rates...they work inversely. If you want to stimulate supply via monetary policy then you have to lower rates and thus finance costs, then corps can leverage supply and we saw that for 15 years. If corps can borrow near zero then their decisions will be more aimed at increasing profits and that comes from selling more goods and services and that is easier with lower rates.

Old economic theory says you slow demand by raising rates which shifts the mentality of the consumer to save more and spend less, that is the theory the FED holds and old econ books teach but it is false. This generation are not savers even if you raised rates as high as 7-8-9 percent, people are piggy consumers to a fault and do not see the future value in present day saving. Most of this generation have not suffered through a back breaking recession or an extended period of economic decline like previous generations did. If the mindset is not focused on the future and to save for the future then rates are not really a motivating factor. For me it is, I see rates and am interested in locking in some long long term rates for retirement diversification but most are not planning like that in THIS generation. Our savings rate is declining/stagnating so the FED has even less tools than ever given they cannot both stimulate supply (which is needed to cool inflation) and reduce demand (which they falsely think is possible and that is the problem in their eyes).

So since they are not really able to control much of anything it seems their role in moving inflation has been zippo for 20 years and will continue to be the same.

@wallstreetcappers

 Here is the problem facing the FED, you cannot stimulate supply and suppress demand at the same time via interest rates

'Stimulate Supply'? Of what, exactly?

If corps can borrow near zero then their decisions will be more aimed at increasing profits

As opposed to being aimed at what?  The entire premise of most businesses is about increasing profits.

This generation are not savers even if you raised rates as high as 7-8-9 percent

How do you know this?  What backs this up?

Most of this generation have not suffered through a back breaking recession or an extended period of economic decline like previous generations did.

And if they do?  Human nature is human nature.  This is the psychology part of economics. 

So since they are not really able to control much of anything it seems their role in moving inflation has been zippo for 20 years and will continue to be the same.

Correct.  The tools are always somewhat limited and that is why it is dicey.  The mainly will be interested in keeping the employment as full as possible and the prices as stable as possible.  That is the whole premise of the folks that say they should have been more proactive and got out in front of this and should maybe even be doing more now.  We all saw this coming.  They have to use the tools that they do have.  Whether you see it saw 3 or 4 different tools considering how you group the 'open market operations' part of it.  That is why I say Powell and his group did a very poor job of managing this.

@Raiders22

 1. I was pretty clear on my reply, the FED to suppress inflation either needs to help increase supply of goods and services or reduce demand and you cannot do both at the same time via ONLY monetary policy. They work inversely.

2. Opposed to not borrowing to increase supply, pretty clear on that. Corps with lower borrow costs will produce more than with higher borrow costs..not a tough one there. They will take risks to leverage production IF borrow rates are lower. Maybe that concept is too difficult for you?

3. Declining savings rates WITH increased interest rates prove that, one of the basic theories in traditional finance is an increase in savings rates leads to an increase in savings. The US as a population has not been increasing savings relative to the increase in rates, another one not easy to understand for you?

4. If they do...great reply. If people struggle through difficult situations are they not impacted by going through those situations? What does human nature have to do with not struggling like past generations has an impact on how the current generation makes decisions? Again not sure why you cannot follow something quite simple.

5. My thought is the FED overestimates the abilities they have to impact inflation via monetary policy. They could not stimulate inflation and they have not suppressed inflation and this in a way reduces the need of their institution and for sure the value of it for inflation. They have to stand by their prime directives as a purpose for existing but some of their core purposes they are for sure not at all fulfilling. They will never admit that or it would potentially risk their powers to be limited and for sure they wont ever want that to even be considered by congress and the treasury.

Not that it matters nor that anyone needed to see this, anyone with even a fleck of financial intelligence knows that saving rates are on a multi decade march downwards but-

https://fred.stlouisfed.org/series/PSAVERT

@wallstreetcappers

 1. I was pretty clear on my reply, the FED to suppress inflation either needs to help increase supply of goods and services or reduce demand and you cannot do both at the same time via ONLY monetary policy. They work inversely.

What would you see as an example of this?  When would you say that it has happened?

2. Opposed to not borrowing to increase supply, pretty clear on that. Corps with lower borrow costs will produce more than with higher borrow costs..not a tough one there. They will take risks to leverage production IF borrow rates are lower. Maybe that concept is too difficult for you?

I am asking 'opposed to maximizing profits'?  Is that too difficult for you to answer?

@wallstreetcappers

 Declining savings rates WITH increased interest rates prove that, one of the basic theories in traditional finance is an increase in savings rates leads to an increase in savings. The US as a population has not been increasing savings relative to the increase in rates, another one not easy to understand for you?

Is it not too easy for you to explain this historically?  You are saying what is happening just in the last couple of years is a change in the dynamic of human psychology and finance?  Why?  What changed?

If they do...great reply. If people struggle through difficult situations are they not impacted by going through those situations? What does human nature have to do with not struggling like past generations has an impact on how the current generation makes decisions? Again not sure why you cannot follow something quite simple.

Again, I do not know why you cannot understand something so simple.  People react the way they do; if nothing changes they will continue to.  One they experience a recession they will react they way folks always have -- unless something else changes.  So what is the point of saying they have not yet experienced one? 

My thought is the FED overestimates the abilities they have to impact inflation via monetary policy. They could not stimulate inflation and they have not suppressed inflation and this in a way reduces the need of their institution and for sure the value of it for inflation. They have to stand by their prime directives as a purpose for existing but some of their core purposes they are for sure not at all fulfilling. They will never admit that or it would potentially risk their powers to be limited and for sure they wont ever want that to even be considered by congress and the treasury.

 Absolutely, one of the main reasons they should do away with it.

But IF they are going to be tasked with doing something -- then do it AND dot it better.  They did a pitful job this time -- just like they did the last time.  They never admit anything because then they would have to admit where they failed. 

@wallstreetcappers

Yes, while the inflation has been very low.  If the folks were to get better rates on the savings vehicles -- there is always a tendency to veer more toward investing it than to simply spend it.  You can juxtapose it with the cost of everyday living currently and say, maybe the average person cannot do that right now.

But common sense dictates that people become more attracted as the rates who up.

Even the ones that are already invest will bounce to a less volatile area if it increases its rate, etc.

@wallstreetcappers

 All of the perjorative talk is also unnecessary.  I never understand why you dip to that in every single discussion you have.

When someone asks for clarification -- simply answer what they ask.  If you do mot know how to explain it clearer, do not get mad at the person asking the question.  Just try or refer them to somewhere that can or wheverer you came up with ideas that go against the accepted ideas, so they can look at it for themselves..

No need to always get the sense you are being called out.

I am simply asking where you get your 'ideas' on this and why you think it holds up when questioned.

but what do they have to gain by destroying us is my question ?  What are their motives ? What is the reasoning ? Is it some kind of devious master plan ? Or just sheer stupidity ? Do they just implement policies with no real plan ?

I think “ they “ are just like the people you see around you in everyday life …… they just do things without thinking and when things don’t happen perfectly for them , or they meet resistance or failure , they get mad and start blaming everything and everyone around them . 

@Raiders22

 You intentionally provoke and use the guise of not understanding as a means of a put down. Its not even hid well enough to be clever. Your replies are strangely offensive and it is obvious you have to make an effort to be intentionally combative. Read your replies to me and notice that almost always you have to be confrontational and passive aggressive so how do you think that would go over?

Then I address your combative retort and you play the victim card. The value in this forum should be open and positive discussion not you nit picking and forcing negative replies, it is a waste of time and it is almost like you are unable to have a conversation with someone who might actually see different than you.

Even this last set of replies you still have to find fault when there is not any need for doing so. I post a link to a chart which shows the declining rate of savings which was a DIRECT combative response you made and your response what the crap was that? Does the chart show that the savings rate has declined since almost 1985? Yes or no? Yes it does...the FED raised rates recently and did the savings rate go up or down? That was my reply and you did not address it instead you deflected and nit picked yet again.

Its not a secret you seem unable to discuss without the constant passive aggressive stuff and your style of put downs via someone elses content is really lame. I am not interested in cut/paste content from a biased site, I can and do find that without the need from you doing the same. If you want to have discussion then stop with the weak retorts and feeling the need to try and put me in my place. I dont find that interesting and you are rarely right even using other peoples content.

@wallstreetcappers

 It is not finding fault.  I am asking where you get the idea from is all.

I posted the guy's numbers on 'Bidenomice' and you went off on several tangents about it not being Biden's fault, etc.  Then drug the FED into it.

Now I am asking again:

I was pretty clear on my reply, the FED to suppress inflation ... needs to help increase supply of goods and services

Where are you getting this from and when has it happened and why bring it up about 'Bidenomics'?

@wallstreetcappers

 Even this last set of replies you still have to find fault when there is not any need for doing so. I post a link to a chart which shows the declining rate of savings which was a DIRECT combative response you made and your response what the crap was that? Does the chart show that the savings rate has declined since almost 1985? Yes or no? Yes it does...the FED raised rates recently and did the savings rate go up or down? That was my reply and you did not address it instead you deflected and nit picked yet again.

Correct.  Because again the savings rate is not their main concern.  For example:

Yields on savings accounts and certificates of deposit have been hovering at high levels, thanks to the Fed’s increased interest rates, according to Ken Tumin, banking expert and founder of DepositAccounts.com. That said, “several banks have been lowering deposit rates (with the) expectation that the Fed will start cutting rates at some point this year.”

Certificate of deposit rates have been the first to fall, and a few online banks have also started lowering online savings account rates. Ally Bank dropped its rate to 4.25% from 4.35% and Discover to 4.25% from 4.30%.

Etc., etc.

So, you have to ask if that is the only thing to be questioned, and obviously, it is not.  The inflation and cost of good and services and tending to pre-existing debt is where the concern is.

It is far different if you are someone that has no debt and has plenty of savings already.  Then you can make the savings adjustments.  But to say the savings rates are not increased to draw customers does not make sense.  Otherwise, they would not consider it. 

Etc., etc.

@wallstreetcappers

 Its not a secret you seem unable to discuss without the constant passive aggressive stuff and your style of put downs via someone elses content is really lame. I am not interested in cut/paste content from a biased site, I can and do find that without the need from you doing the same. If you want to have discussion then stop with the weak retorts and feeling the need to try and put me in my place. I dont find that interesting and you are rarely right even using other peoples content.

It is not passive-aggressive to question someone when they say something that no one else has said before.  I am asking where you get that idea and are there examples and what experts back it up?

I could simply say you are wrong and no one else says that or agrees with you.

We all have ideas outside the box sometimes and when new information is presented can change our minds or have them reinforced.

How else would you like someone to ask without offending you?

@Raiders22

 Oy...

Inflation is by definition an increase in prices, the prices of goods and services. Consumers demand goods and suppliers provide goods and services which to be consumed. The intersection of supply and demand is price. Please do not try and retort what price is or who a supplier is or what consumers do blah blah blah...basic econ theory is prices in a capitalist economy is determined by a meeting of the minds of supply and demand.

So....if the FED wants to influence inflation via monetary policy how can that be done? They have few tools that influence inflation and that is to influence demand and then using monetary policy they can impact supply.

Why do you think Apple floated near zero interest debt? Why did so many corps like MSTR float near zero debt? Because the cost of that debt was near zero. It was not that they needed to have more cash rather the cost of that debt was so cheap it made financial sense. So the FED via ultra low rates influenced corporate debt issuance AND with that issuance MANY corps could fund their operations, many many fringe frackers were able to be active because of cheap debt and that low finance cost means that corps can produce more than they would otherwise because it costs zero to do so. 

When by example Coke who has all the infrastructure and distribution in place decides to borrow cheap money and can produce more product at lower prices and make more money based on VOLUME then that is where the FED can influence supply. Making finance costs near zero positively impacts production from corps, finance costs are a very large consideration for decisions on capital goods, marginal production, hiring pretty much everything.

So if the FED wanted to have impact on supply to INCREASE it now via monetary policy, they cannot do so. Raising rates impacts corporate borrowing rates, we have seen that since rates started going up and that is partially why the market drops when the FED gives a signal of rates not going down OR even going up.

I know you think me answering a question is a tangent, not sure why but the FED raising rates CONSTRICTS supply, so it is counter to impacting inflation. The FED cannot suppress consumption using monetary policy and not also constrict supply at the same time. It is like the argument that the FED really is not conducting QT when they keep a massive program for banks as they have, they cannot be "draining liquidity" as they claim while also offering overnight borrow facilities to make sure banks dont go under due to leverage/liquidity rules.

Corps will take more risks on excess supply when/if rates make the business decision favorable.