I have made the point in a couple of other posts on the economy that what really counts in economic growth is productivity–how much output there is per worker. Government regulations and other disincentives to invest hinder productivity growth and hurt improvement of quality of life for all Americans. Today we saw several pieces of news showing just how pathetic the Biden economy is actually doing. Inflation on a month over month basis showed a slight decrease but is still extremely high at 8.7%. Is your income growing that fast? No it isn’t, as the data also shows a continuing fall in real income–meaning that money people have is able to pay for less and less.
Inflation isn’t going to ameliorate significantly because there will be lots of pressure from workers to get their wages back up to at least cover their increased costs of living, because rent increases are just starting to show up in the official inflation figures and because health care, which is 20% of the economy, is just beginning to push large price increases through. Falling gasoline prices aren’t going to make any difference in light of these other factors and you can assume that the Presidementia will find some way to make gas more expensive again too.
But the big news is the record decline in productivity. That also has price implications because if the same number of workers produces less that means the unit cost of whatever is being produced is higher and a higher end price to the consumer has to be charged to make up for those cost increases. The decline, at an annualized 4.7%, was the highest on record. Democrats are passing all kinds of laws and rules that will hinder productivity even more. That is all they know how to do. (Prod. Article)
So please, enjoy the wonderful Biden economy while it lasts.