Americans are currently getting hit where it hurts most, and the Biden administration has done nothing to control the damage.
Despite the narrative pressed across the board in today’s media, our current economic woes cannot merely be chalked up to increased demand and trouble in the supply chains. Fundamentally, we’re facing a monetary crisis that President Joe Biden’s administration has done nothing to resolve.
Now the American people have begun to pay the price.
As the dollar’s value continues to weaken, inflation rates have soared to rates unseen in decades. The collapse in our currency has put further strain on the wallets of Americans at a time when nearly 1 in 8 families are struggling to feed their children and 1 in 6 renters are still behind on their housing payments.
All one needs to do to understand the severity of our situation is look at the prices Americans are paying for everyday goods. Gas prices are up 25% since February 2018. Grocery prices across the board are skyrocketing as people struggle to put food on their tables. And looking at the holidays, Americans paid 24% more for their Thanksgiving turkeys compared to 2020.
So much for the savings from our Fourth of July cookouts being 16 cents cheaper, Mr. President. Under Biden, there’s a chicken in every pot — where there was supposed to be a turkey (though we’d all have just soybeans if we ask the St. Louis Fed).
— DCCC (@dccc) December 2, 2021
By promoting the same failed policies of the last four years, Biden seems oblivious to the pain the American people are feeling.
The president recently announced he’s re-nominating Jerome Powell as chairman of the Federal Reserve in a move that further turns his back on the American people. After all, Powell’s work since taking the helm of the nation’s most powerful monetary institution has crippled the American economy.
Since the onset of the pandemic in March 2020, the Fed has verged on fiscal and monetary insanity. After reversing its moderate interest rate hikes in early 2019, the Fed slashed interest rates to zero and unleashed billions of dollars in a new quantitative easing program.
And in spite of Powell saying that “I don’t see us wanting to run through the bond market like an elephant snuffing out price signals, things like that,” the Fed began buying up hundreds of millions of dollars in corporate junk bonds while plagued with allegations of insider trading. The drastic shift in Fed policy marks the first time that it so radically experimented with our monetary policy.
But perhaps the most telling sign of our new currency crisis is the price of gold. Historically the best indicator of the strength of currency, the price of gold in U.S. dollars has skyrocketed under Powell’s leadership.
While an ounce of gold would have cost about $1335 on the day Powell became Fed chair, that same ounce today would cost roughly $1815 — marking a nearly 36% increase in cost. In fact, Powell’s monetary policies during the pandemic shot gold to its highest price since we left the Bretton Woods gold standard in 1971.
Returning the Fed to its original single mandate of maintaining a stable dollar would be the best method of fighting our rampant inflation, as was previously proposed in the Sound Dollar Act. And if there’s doubt that a stable dollar is the best vehicle for maintaining economic prosperity, legislation like the Centennial Monetary Commission, last introduced in 2015, would provide an excellent neutral forum to debate the issue.
While Washington commissions have deservedly gotten a bad reputation, reforming monetary policy has historically been preceded by commission recommendations. And in order to give a commission some real teeth, it could be expanded with the authority to audit the Fed, an especially prudent policy in light of the serious insider trading allegations.
Even Powell himself has admitted that our inflation will continue to boom well into 2022. And unless he reverses his course of unlimited quantitative easing quickly, we’ll continue to suffer at the hands of a weakening dollar. The Fed nearly doubled its balance sheet through all its junk bond and additional asset buying in the last year and scaling it down is a needed step.
The fact is, President Biden has done little more than pay lip service to reining in this monetary meltdown. And with his promotion of the same old, worn out policy dragging down the value of our money, he’s truly showing the American people what it means to “lower expectations.”
Nathan Williamson is Legislative Director for the Capitalist League. His commentary has been published in such outlets as the Washington Examiner and RealClearMarkets.