In a recent survey, Americans ranked inflation as the most urgent issue facing the country. So, our ears perked up when Pres. Biden began laying out his plan to bring down inflation in his State of the Union address. After listening to his speech, you can’t help but think that he’s thrown in the towel — subsidizing Americans seems to be the only idea he had.
Biden believes he can cut energy costs for families by throwing more money at solar and wind power, as well as providing tax credits for electric vehicles. “This is reminiscent of the story of the boy who kills his parents and throws himself at the mercy of the court for being an orphan,” says economist Steve Moore. Oil and gas prices are rising because the Biden Administration and progressives have declared war on American fossil fuels. They’ve forced cutbacks on drilling, blocked new pipelines from being built, and tacked on higher and higher taxes at the pump. The fact is that Biden cares less about rising energy prices for consumers and more about keeping the green energy industry happy, which gives nearly all of its political contributions to Democrats.
Biden also wants to subsidize child-care for families, home care and long-term care, and pre-K for every three and four-year old. Rachel Greszler of the Heritage Foundation notes that there are a lot of strings attached to these programs – strings that will drive up costs. Greszler writes the child-care program in the original Build Back Better proposal calls for paying a “living wage” that could be as much as $39 per hour. For a single mom in Boston, this means doubling child-care costs. So much for reining in inflation.
Next, Biden wants to bring down the cost of prescription drugs through price controls. Data shows that while overall prices are up, the prices for prescription drugs have actually declined, wrote Wayne Winegarden, Director of PRI’s Center for Medical Economics and Innovation. Moreover, the average annual growth in prescription drug prices has been less than overall inflation for the past five and ten years. Bottom line, says Dr. Winegarden, “relative to all other prices, the prices of prescription drugs as measured by the CPI have become more affordable not less.”
All of Biden’s ideas to tame inflation were all the more perplexing since they were in his failed Build Back Better plan, which never made it out of a Congress controlled by his own party.
Finally, Biden lectured businesses to “cut your costs and not your wages.” With rising energy and construction costs, and continuing supply chain problems, this is nearly impossible to do. In addition, he continues to push for a $15 minimum wage. California having “been there, done that” has lagged the national unemployment rate, before, during and after the pandemic.
Few have been able to take Pres. Biden’s first State of the Union address seriously, not even the late-night comics. Biden’s last line: “Go Get ‘Em!” took the brunt of the jokes. Who was he talking about? Putin? Pokémon? wondered Jimmy Kimmel. Well one thing is clear, it wasn’t inflation.
Rowena Itchon is senior vice president of the Pacific Research Institute.