The point to mark about the recession into which America has entered is that it is not caused by exogenous factors, like the Ukraine war, supply-chain issues, or Covid, as the White House and its press allies would like you to think. This downturn — the Biden recession — is the result of the current administration’s policy errors, which include over-regulating, overspending, and a failure to confront inflation with supply side measures. President Biden on Thursday sought to deflect the news that economic output has shrunk for two quarters, an oft-cited hallmark of a recession. He finds it “no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation.” Citing “historic global challenges,” he dodged the R-word, calling the current economy a “transition,” from which he expects America will emerge “stronger and more secure.’’ The Federal Reserve chairman, Jerome Powell, is following the White House, denying yesterday that a recession has begun. “There are just too many areas of the economy that are performing too well,” he observed, pointing to low unemployment and sustained wage growth. Senator Warren has already warned the Fed against “triggering a devastating recession.” Mr. Powell is wary to acknowledge it.Though the Fed helped shape our current economic crisis, this isn’t entirely a Fed recession. The cause of this downturn rests with Mr. Biden, who took office amid an economic expansion that he managed to transform into a recession by reverse alchemy. Worse, he’s doubling down, pushing legislation in Congress to raise taxes on corporations and to spend more. Such is the logic that tipped us into negative growth in the first place.In his first year in office, Mr. Biden saddled businesses with new rules and “more than $201 billion in regulatory costs and 131 million hours in new annual paperwork,” the American Action Forum reported, “three times the costs of Obama’s first year and nearly 40 times those of Trump’s.” The most costly of these relate to vehicle emissions, part of the green energy agenda for which Mr. Biden is renewing a push on Capitol Hill. The 77 executive orders issued by Mr. Biden “represent the highest number since the Ford Administration,” the Action Forum observed. Among the first of these is the revocation of approval for the Keystone XL pipeline, underscoring Mr. Biden’s prioritization of fighting climate change over American economic health. That order set, during Mr. Biden’s first year in office, a tone of hostility toward the fossil fuel industry.That included proposals in Mr. Biden’s budget to raise taxes on companies producing oil and gas. That was seen as “taking aim at the fossil fuel industry in a move that would push production overseas,” as Senator Moran of Kansas observed. It was no surprise, then, that energy prices started to rise. By the end of the year Mr. Biden was accusing oil and gas companies of price gouging and urged the Federal Trade Commission to investigate. In fact it was Mr. Biden who was doing the gouging — tax gouging. Something similar could be said of the spending bills Mr. Biden and Capitol Hill Democrats inflicted on the country in his first year. Hundreds of billions in stimulus checks, and hundreds of billions to bail out teachers unions and wasteful Democratic big cities — pretty soon, it starts adding up to real money. Sage voices, like Treasury Secretary Summers, warned of the inflation. Tax cuts and deregulation have yielded better results. The economic data this week — high inflation, negative GDP, depressed wages, crashing confidence — are the bitter harvest of what Mr. Biden sowed in 2021. He inherited from President Trump an economy that had “roared back from the brief but brutal pandemic recession,” the AP notes. The “transition” America needs now is new leadership in the White House.
