The recession has likely already started. According to the GDP tracking tools used by the Atlanta Fed, the second quarter of 2022 will continue the economic contraction started in the first quarter.
This same tracking tool accurately predicted the negative GDP performance in Q1, and has shown a high level of reliability in the past.
I’ve made it clear in the past that I think the entire Biden Administration grossly underestimated the economic impact of his domestic war on fossil fuels. They also blew the inflationary impact of his stimulus package. Add that to volumes of new regulations that slow business growth, and the economic slowdown is easily predictable.
His policies to increase costs of domestic oil production, that he started on day one, have made it all but impossible to increase production here (despite their public claims). I have well documented these policy moves.
Petroleum ripples all through our economy. It affects food costs because of the impact on agriculture and shipping. It creates shortages and cost increases in plastics. It’s even partly responsible for the tampon shortage. It all goes back to Biden’s policies.
As a result of these failures, in just 17 months, Biden has recreated stagflation. I predicted that months ago
The most maddening thing is that his domestic war on fossil fuels is an insane policy with no possible positive result. We can’t build electric vehicles fast enough to meet his timeline. Our current electric grid can’t create the power tens of millions of vehicles would need, and we’re reducing more capacity than we’re adding. The production requirements of the batteries for EVs are an environmental nightmare, which is why most of the materials aren’t mined in the U.S.
Look, there are just over 2 million EVs on the road in the US – less than 1% of the 270 million vehicles on the road. Auto manufacturers annually sell about 17 million units in the United States. Even if they were able to pivot and sell 8 million EVs a year (which they can’t do for years because of supply issues), in 10 years that won’t even be a third of U.S. vehicles. The climate impact is slow. But the economic impact of gas at $5/gallon is crippling.
A conversion to EVs will take decades. We still need oil. Our economy thrives on it. Biden is dismantling the oil industry decades before it matters.
Do they really believe our world is on the edge of climate ruin? No, they have to know it’s not.
Maybe it has to do with rewarding cronies. The Green Movement itself will result in the largest shift in wealth from the lower and middle class to the Green Energy industry. It’s insane. It’s wrong. Its cost is multiples more than what the economic impacts caused by climate change would be.
Or, Biden knows that throughout history most shifts to a socialist government have been preceded by an economic crisis. Maybe that’s his goal. Or, perhaps they really are truly incompetent. I don’t care which it is. It’s wrong. We need a change.
Click here if you want to read from the creator of the chart, the Federal Reserve Bank of Atlanta.
This is Canada Day. Having already read some idiot who wants Canada to annex the U.S. (instead of his leaving the U.S. for Canada, which is far easier), it occurs that there is only one thing about parliamentary systems (also known as dictatorships of the majority) that are superior to the U.S.’ system — the opportunity to vote bad leaders out of office faster than in this country. That, however, requires a majority of the bad leaders’ party to realize their leaders are doing a bad job.