Wall Street rallied yesterday and today for no good reason as the Federal Reserve Board raised the Federal Funds Rate 75-basis-points to 3.75%, the largest rate hikes in 20 years trying to tame nearly 10% inflation. Then, today, the Commerce Dept. reported that U.S. Gross Domestic Product [GDP] shrunk another 0.2% in the Second Quarter [Q2] for an annualized decline in GDP of 0.9%. Today’s 0.2% decline was preceded in Q1 by a 0.4% decline, marking two quarters of negative GDP growth marking recession by the government’s definition. Biden White House sought to spin the results as an inevitable recalibration of the economy after the whopping job gains coming out the pandemic in 2021. White House officials tried to explain today’s negative Q2 GDP number as a natural consequence of the Fed’s action to hike interest rates, together with coming out of the 2021 pandemic.
All economic trends point to weakening of the U.S. economy, not due to some magical plague hitting the economy but 79-year-old President Joe Biden deciding he wanted to take on the Russian Federation. Biden’s proxy war, using Ukrainian troops, against the Russian Federation is more responsible for the economy downturn than anything named by the White House. “We don’t think we’re in a recession just yet,” said Aditya Bhave, senior economist at Bank of America. “But the bigger point here is that the underlying trend in domestic demand is weakening. You see a clear deceleration from the first quarter,” said Bhave, not admitting that the Ukraine War has put a real damper on the U.S. economy. What happened to inflation when Biden boycotted Russian oil, coercing the Western Alliance to stop buying Russian oil, creating the worst inflation in over 40 years.
Biden wants to pretend that his proxy war against the Russian Federation has had no effect on the economy. Yet ordinary citizens know that gas prices doubled when Joe decided he’d punish 79-year-old President Vladimir Putin for invading Ukraine Feb. 24. No economist that‘s worth his salt can pretend that the Ukraine War hasn’t fueled shortages and skyrocketing prices, leading the Fed to hike interest rates wildly to tame inflation., all caused because of Biden’s Ukraine War. Russia accounts for 10% of world oil sales, amounting to, before the Ukraine War, to 5% of U.S. oil purchases. Once Biden boycotted Russian oil, it threw U.S. energy markets into chaos, doubling pump prices, fueling inflation in the retail and transportation industry. Ehave and other Democrat-friendly economists don’t want to admit that today’s hyperinflation his directly related to Biden’s Ukraine proxy war.
White House officials won’t admit the damage the Ukraine War does to the U.S. economy, leading to another quarter of negative GDP growth. “Coming off last year’s historic economic growth—and regaining all the private sector jobs lost during the pandemic crisis—it’s no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation,” Biden said today. Biden knows, but won’t admit it, the damage his Ukraine proxy war has done to the U.S. economy. Pretending otherwise shows why his aggregate approval ratings are about 37%. ”But even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure,” Biden said. Biden has hit the U.S. economy with a wrecking ball all because of his vendetta with Putin. His relationship with Chinese Presidetn Xi Jinping isn’t much better.
Biden says the U.S. is on the “right path” for a two-front war, one with Russia, the other with China. House Speaker Nancy Pelosi (D-Calif.) has been assembling a delegation to visit Taiwan in August, prompting Xi to tell Biden today that there would be severe consequences. Biden won’t admit that in 20 months, actually much sooner, Biden killed U.S.-Russian and U.S.-Chinese relations. Biden talks about being on the “right path” to perpetual war with America’s adversaries. Generations of U.S. presidents before Biden made every effort to get along with Russia and China. Since Biden took office Jan. 20 m 2021, he has wrecked all the good will built up for generations for pragmatic, constructive relations with Russia and China. Now the U.S., under Biden’s leadership, faces the very real prospects of war with Russia and China, once thought unthinkable.
Biden has taken a prosperous U.S. economy under former President Donald Trump and trashed any economic recovery by taking on the Russian Federation. Paying for all of Ukraine’s government salaries and the proxy war against the Russian Federation continues to destabilize U.S. and World GDP growth. Biden can demonize Putin all he wants but the fact remains that the Ukraine War has thrown the U.S. and world economy into a tailspin. Whatever the Fed does to tame inflation, 69-ytear-old Federal Reserve Board Chairman Jerome Powell admitted that he’s not in control of geopolitical events like Biden’s proxy war against the Russian Federation. If Biden pushes China into a military confrontation, all best are off for the U.S. and world economy. Biden needs to remind himself that “peace is the highest aspiration of the American people,” not his constant state of war with Russia and maybe China.
About the Author
John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He’s editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.
