The news on the Bidenflation front continues to worsen. Not surprisingly, President Biden and his senior administration officials are in full spin mode.
On April 12th, the Bureau of Labor Statistics (BLS) announced that the Consumer Price Index (CPI) rose 8.5% annually between March 2021 and March 2022 – the steepest increase since December 1981.
The index for all items less food and energy – what is known as the core index – rose a hefty 6.5 percent during this same period, the largest 12-month change since the period ending August 1982. The shelter index alone rose 5.0 percent over the last 12 months, which the BLS said was the largest 12-month increase since May 1991.
We only had to wait twenty-four hours for the other inflation shoe to fall. On April 13th, the BLS announced that the Producer Price Index (PPI), the measure of prices paid by wholesalers, rose a whopping 11.2% from March 2021 to March 2022. This was the biggest PPI increase on record.
These enormous price increases are further eroding any advances in real wages since President Biden took office. Workers are behind the eight ball thanks to President Biden’s reckless spending and energy policies. Adjusting for inflation, average real pay was down in March. The 5.6 nominal increase in hourly wages, as calculated without taking account of the increase in the cost of living, means little to workers trying to make ends meet.
During a speech that President Biden delivered in Iowa on April 12th, the president boasted “We’re back.”
Yes, we are back – back to the disastrous hyperinflation days of the Jimmy Carter presidency.
President Biden continued to blame Russian President Vladimir Putin for the inflation surge, particularly for the dramatic rise in prices for food and gas.
“Putin’s invasion of Ukraine has driven up gas prices and food prices all over the world,” Biden said.
Let’s start with food prices. For the twelve-month period ending in March 2022, the CPI increase for food overall rose 8.8 percent. During the same period, the food at home price index rose 10 percent. But the increases in both these price indexes were rising well before Putin’s invasion of Ukraine on February 24, 2022.
For example, from February to March 2022 the food at home index rose 1.5 percent. The price index for food at home from January 2022 to February 2022 rose 1.4 percent. This means that the total price increase for food at home for the two months of February and March 2022 combined, which were the months most impacted by Putin’s invasion to date, was slightly less than thirty percent of the twelve-month increase between March 2021 and March 2022.
In short, the responsibility for the food inflation over the last year following President Biden’s signing of the Democrats’ partisan $1.9 trillion so-called “COVID relief” legislation lies mostly with President Biden himself and his spendthrift Democrat congressional colleagues.
Turning to the rise in retail gasoline prices, President Biden told his Iowa audience that “Seventy percent of the increase in prices in March came from Putin’s price hike in gasoline.”
Gasoline prices did rise dramatically this past February and March – 6.6 percent and 18.1 percent, respectively. But the president seems to think Americans will forget that the prices they were paying for gas at the pump were rising steeply months before Putin launched the invasion of Ukraine on February 24, 2022. The American people are not that gullible.
By midway through 2021 – months before Putin had gathered 150,000 troops on the Ukrainian border – Americans were already paying on average 32 percent more for gasoline to fill their tanks than they had just six months earlier before President Biden took office. By the end of 2021 – nearly two months before Putin’s invasion – Americans were paying on average 45 percent more for a gallon of gas than they had been paying at the start of 2021.
President Biden’s war on fossil fuels was largely responsible for those pre-Ukraine invasion gasoline price spikes. Biden set his anti-fossil fuel agenda in motion right away by cancelling the cross-border permit for the Keystone XL Pipeline on his first day in office. The Biden administration froze leases for drilling on federal lands and waters, imposed numerous regulatory roadblocks that impeded more drilling and production, and discouraged financial institutions from investing capital in the fossil fuel industry.
The inevitable result of all these actions, taken in the name of the radical Green New Deal, was the end of the Trump era’s U.S. energy independence and an insufficient domestic energy supply to meet demand. The surge in gasoline prices followed like night follows day.
Out of sheer desperation, President Biden has authorized the release of many millions of gallons of oil from the nation’s Strategic Petroleum Reserve. He has gone begging to OPEC nations to increase their oil production with no success to speak of.
President Biden has also taken a step that will add smog to the atmosphere this summer. Biden announced during his Iowa speech that his “Environmental Protection Agency is planning to issue an emergency waiver to allow E15 gasoline that uses more ethanol from homegrown crops to be sold across the United States this summer in order to increase fuel supply.”
E15 gasoline is gasoline that uses a 15 percent ethanol blend.
The Biden administration is projecting that the E15 gasoline waiver will result in a 10 cent reduction in the price of a gallon of gas at the pump. But there is less here than meets the eye.
Aside from the fact that only a few thousand pumps today dispense E15 gasoline, vehicles will typically go 4% to 5% fewer miles per gallon on E15 gasoline than on 100% gasoline. Vehicles using E15 gasoline will also be able to travel fewer miles per gallon than the more standard E10 blend (ten percent ethanol and ninety percent gasoline). Thus, whatever money consumers may save at the pump in purchasing E15 gasoline for their vehicles, they will have to refill their tanks at the pump more often.
The most disturbing consequence of President Biden’s politically expedient decision to waive the ban on E15 gasoline sales this summer is that Americans will be breathing dirtier air. The reason for the Environmental Protection Agency’s ban on summer sales of E15 gasoline in the first place was the concern that emissions produced from higher ethanol content would form ozone in reaction to summer sunlight, thus adding more smog in the atmosphere.
President Biden’s Iowa speech skipped over the core price index, which strips out food and energy prices from its calculation. Even Biden would have a tough time blaming the 6.5 annual increase in the core price index on Putin. If the president or his senior administration officials try to do so, they will have to explain why core prices in the United States have risen more sharply than elsewhere in the world such as Europe.
The annual core inflation rate in the Euro Area increased 3% in March of 2022 – less than half of the annual increase in the United States. Europeans are hurting to be sure, but not as much as the American people are hurting on President Biden’s watch.
President Biden’s dismal performance on the economy is taking its toll on him politically. His overall approval rating has slipped further to 38 percent, according to CNBC’s All-America Survey. Biden’s approval rating on the economy dropped to a dismal 35 percent. The cost of living is the top priority issue for 48 percent of those surveyed.
Clearly, the American people are not buying President Biden’s lame excuses for the consequences of his own disastrous economic policies.