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Biden stagflation is Coming

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发表于 11-5-2022 06:37 PM | 显示全部楼层 |阅读模式
The Wall Street Journal published an article titled "Biden stagflation is Coming" on its website on December 13. The article was written by Phil Gram, former chairman of the SENATE Banking Committee and a visiting scholar at the American Enterprise Institute, and Mike Soren, a partner at Policy Research. The White House continues to insist that inflation will soon subside and the US will return to pre-coronavirus prosperity. But the Biden administration's regulatory agenda virtually ensures that the post-pandemic economy will never be the same. The growing regulatory burden imposed by Mr Biden's executive orders, his regulators' open hostility to the US economic system and a return to progressive era antitrust enforcement will restrain growth. All the ingredients to turn current inflation into stagflation will be present.

America's painful experience of regulatory overreach is still ahead. When the subprime-related recession ended in mid-2009, economists were predicting a strong recovery. In early 2010, the Office of Management and Budget forecast average real GROSS domestic product growth of 3.7 per cent in 2016, the Congressional Budget Office estimated 3.3 per cent in the same period and the Federal Reserve forecast 3.5 to 4 per cent growth through 2014. In fact, during the recovery from 2010 to 2016, GDP growth fell to 2.1%, the lowest in 80 years.

In the early days of the Biden administration, the cold, dead hand of government regulation reached even further than it did under Obama. The original executive order stripped away the cost-benefit analysis that underpins regulatory policy, defining benefits as encompassing "social welfare, racial equality, environmental protection, human dignity, equity, and the benefit of future generations." The executive order opposes mergers and acquisitions that put consumers at risk and targets the oil and gas industry for extinction.

In seeking to re-regulate the railroads, Biden seeks to undo the legacy of deregulation left by President Carter and Senator Ted Kennedy, whose achievements made the U.S. transportation system the most efficient in the world and cut the cost of moving people and goods in half. On antitrust enforcement, Mr Biden seeks to roll back nearly half a century of bipartisan reforms that have dismantled progressive-era regulation and dramatically increased productivity, particularly in transport and high-tech communications. Nowhere is the Biden administration's aggressive regulatory agenda more evident than in his appointees. President Clinton appointed Larry Summers, Arthur Levitt, and Alan Greenspan to regulate and grow the economy in a way that was in the interest of consumers, not to overhaul it. Clinton's regulatory agencies and regulatory policies allowed America to prosper.

Mr Obama's regulators have killed businesses and jobs, while Mr Biden's are openly hostile to the industries they regulate and the US economic system. Instead of protecting investors and consumers, they seek to make companies serve government objectives. Through Biden's executive orders and regulatory policies, the US economy is changing from the great giant of world capitalism to a pliant puppet of capitalism, its master being the government rather than the consumer.

If the economic stagnation caused by Obama era regulations is being repeated in a way that amplifies the obama-era regulations, slower growth looks set to follow the current post-pandemic boom. Stagnation could easily turn into stagflation if new stimulus spending and monetary adjustments are used to stimulate slowing growth.

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