So the Biden White House put on their jogging shoes and took a victory lap last week because “. . . IT IS WORKING!”
“It” is, of course, the admin’s brilliant inflation reduction plan – a highly secret document, apparently – that resulted in PPI (Producer Price Index – the price of things on the manufacturers’ dock before it arrives at the consumer) “falling” from 8.4% in September 2022 to 8.0% in October.
Yeah, yeah, yeah, right?
“It is working!” indeed
Of course, there are cynics who will point out that inflation since Joe Biden took office has been an uphill climb, shown thusly:
As you can see, exactly since Joe Biden took the oath of office, prices have exploded upward. Note these are monthly increases; the cumulative situation is even worse.
1. Since Joe Biden took office, CPI is up 13.92%.
2. Same time period food alone is up 18%.
These numbers are now embedded meaning they are baked into the cake forever and are never going away.
So, Big Red Car, no victory lap?
No, dear reader, no victory lap.
We are still in the stranglehold of 40-year record (back to Jimmy Carter days) inflation territory and while it is true that 8.0% is less than 8.4%, it is a meaningless difference.
Surely, things are getting better, right, Big Red Car?
Actually no, dear reader.
I believe we are just now seeing the structural fallout from the higher interest rate suppository medicine administered by the Federal Reserve, the guys in charge of monetary policy.
White House, Congress does fiscal policy; Fed does monetary policy.
My exemplar? Housing, more specifically mortgages – which are down a healthy 55% since last year.
Allow me to share two data points:
1. JPMorgan, big mortgage lender, issued 46% fewer mortgages in the last quarter than they did a year ago. They are cutting staff.
2. Wells Fargo, another big mortgage lender, is down 90%, also cutting staff.
On the issue of cutting staff, include Rocket Mortgage, Redfin while others such as First Guaranty Mortgage have declared bankruptcy and Sprout has closed its doors.
This is going to get a lot worse before it gets better.
Bottom line it, Big Red Car
Fine, here it is: the economy is still in the first trimester of getting ill. It — whatever the heck IT is — is not working and it will get a lot worse before you have to worry about a victory lap.
But, hey, what the Hell do I really know about anything anyway? I’m just a Big Red Car.
Have a great weekend. Call someone you have grown apart from due to COVID. Strike up that relationship. Go visit your Mom.