DANIEL VAUGHAN: Inflation climbs, Wages fall, and Biden shifts blame

Inflation continues to run red hot under the Biden administration. The Bureau of Labor Statistics (BLS) recorded inflation at 40-year highs. Compared to last year, prices across all products were 7.9% higher nationally. But while inflation continues rocketing upwards, real wages are tanking.

Released at the same time as the inflation report, BLS also released their “real earnings” report. This report adjusts monthly and yearly earnings by employees for inflation. The BLS said, “Real average hourly earnings for all employees decreased 0.8 percent from January to February … This result stems from essentially no change in average hourly earnings combined with an increase of 0.8 percent in the Consumer Price Index.”

That shift in wages was just month to month. Year over year, the decrease in wages is even starker: “Real average hourly earnings decreased 2.6 percent, seasonally adjusted, from February 2021 to February 2022. The change in real average hourly earnings combined with an increase of 0.3 percent in the average workweek resulted in a 2.3-percent decrease in real average weekly earnings over this period.”

Red Hot Inflation.

According to BLS data, looking at February 2021 to February 2022, only two months showed wage growth when adjusted for inflation. Seven months showed a decrease in wages once inflation got included. The remaining two months showed zero percent wage growth adjusted for inflation.

The inflation referenced by the BLS is the highest measured in a generation. According to the data:

The 12-month increase has been steadily rising and is now the largest since the period ending January 1982. The all items less food and energy index rose 6.4 percent, the largest 12-month change since the period ending August 1982. The energy index rose 25.6 percent over the last year, and the food index increased 7.9 percent, the largest 12-month increase since the period ending July 1981.

Contrary to the White House, these numbers are not because of the war between Russia and Ukraine. President Biden tried to make this exact case in his statement.

It’s not Putin.

The White House statement said, “today’s inflation report is a reminder that Americans’ budgets are being stretched by price increases and families are starting to feel the impacts of Putin’s price hike.”

The Putin price hike is a clever line, but also totally wrong. The Biden administration didn’t announce sanctions until February 21, 2022, the last week of February. The CPI and Real Earnings report reflect a world before the war started. We won’t see Putin’s war reflected in the data until next month.

Democrats would love nothing more than to blame Vladimir Putin for everything wrong in America. Blaming Putin is something they got used to doing for four years under Trump. But while Putin is responsible for his despicable actions in Ukraine, inflation data has shown issues for a year now.

In just the last few months, Biden has blamed:

  1. Big Meat” for high grocery prices.
  2. Oil companies for high gas prices.
  3. A “cartel” of shipping companies for the supply-chain crisis.

And now they’re blaming Russia for everything. The White House refuses to acknowledge its energy policies, massive spending legislation, or government regulation as potential culprits for inflation.

For a President fond of saying the proverbial “buck” stops with him, Biden has passed that buck more times than a racecar at Talledega. You’ll find more accountability with Dan Snyder and the Washington Commanders or whatever they’re calling themselves this year.

The Buck stops with who?

Joe Biden has been in office for a year and flunked every test. Some of those tests were self-created; others are events presented to all Presidents. In either case, the United States is speedrunning all the greatest hits of Jimmy Carter, with Biden ad-libs thrown in for fun.

The problem is that we’re in a real crisis at the moment, both at home and abroad. Inflation is a destabilizing force that’s destroyed many countries. The Federal Reserve is standing by to hike interest rates to combat inflation. That plan may work, but we’ve never hiked rates to tamp down inflation in the middle of a war, global supply chain crisis, pandemic, and employee shortage.

A recession is a genuine possibility. There is a lot of uncertainty for America economically.

There’s no more certainty on the geopolitical side. Biden’s disastrously managed Afghanistan withdrawal opened Ukraine and Europe even wider to Russian influence. Brave Ukrainian resistance delivered a new backbone to Europe. However, it still falls to the United States to manage the war’s outcome.

Biden has yet to show he’s capable of leading Europe. So far, the United States has yet to offer a clear objective in managing Europe, Ukraine, and Russia. That uncertainty leads to misfires on sending lethal aid to Ukraine and mismanagement of allies.

The proof of Biden’s mismanagement is in the pudding. American wages are falling, inflation is climbing, and now the world is less safe. These data points are all from Joe Biden’s first year in office.

Three more to go for this term.