Biden's stagflation arrives

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Biden's economy is not working in two ways. First, millions of Americans have dropped out of the economy to live on government handouts.

Second, economic activity is on the decline.

CNBC reported today, "Producer prices climb 6.6% in May on annual basis, largest 12-month increase on record."

The story said, "On a monthly basis, the producer price index for final demand rose 0.8%, ahead of the Dow Jones estimate of 0.5%."

Rising commodity prices and wages are fueling this inflation.

Not demand, because the story also said, "Those higher price pressures came amid a pronounced dip in retail sales, which fell 1.3% in May, worse than the 0.6% estimate, according to the Census Bureau."

Given that two-thirds of the economy is retail sales, that is not a positive sign.

The story said, "Goods inflation continued to be the dominant inflation force, rising 1.5% as opposed to a 0.6% increase in services. In the pandemic economy, goods have run well ahead of services as economic lockdowns constrained consumer demand for services-related purchases."

So we have a drop in sales coupled with an increase in costs topped by inflation.

All we need is a rise in unemployment, and we will have a return of stagflation.

Forget putting Harriet Tubman on the $20 bill. We will need her for the $200 bill.

The economy rebounded from the pandemic thanks to President Donald John Trump's leadership in acquiring a vaccine and running the show like a businessman. Unemployment dropped from 14.7% in April 2020 to a mere 6.3% nine months later, when he handed the economy over to Obama Junior.

The first three months went fine, but then came May. 

The Wall Street Journal was optimistic, reporting, "Spending, in part driven by government stimulus, has helped propel the broader U.S. economy, which grew at a 6.4% annual rate in the first quarter. Economists project that by the end of this year gross domestic product will reach the path it was projected to follow had the pandemic never happened—and then exceed it, at least temporarily." 

I hope that is true. I hope the economy fully recovers, despite Josef Biden's failure to understand or embrace capitalism. But I remind readers that he spent 44 years in Washington pushing socialist programs and opposing the capitalist programs of Reagan and Trump. 

Cancelling the Keystone XL pipeline to bring Bakken oil from North Dakota to the market was a bad move, as is talk of erasing President Trump's tax cuts, which dropped unemployment to 3.5% -- its lowest level in 50 years.

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