At a recent confab, President Biden’s imperiled party pushed a new message: Democrats deliver.
The proposed slogan was panned; Democrats were terrified Republicans would respond with: “Yes! Democrats deliver crushing inflation, soaring crime, an open border, critical race theory for tots, full-term abortions on demand, a woke military, high taxes and out-of-control spending. And now… will Joe Biden’s Democrats deliver a recession?”
Yes, just when you thought things could not get worse, along comes the very real possibility of a downturn, thanks to Bidenomics, the war in Ukraine and an inept Federal Reserve. A year ago, during a robust recovery, such a forecast would have seemed ludicrous.
A top Wall Street economist recently conducted an informal poll of his firm’s clients. To his surprise, 100 percent thought the U.S. would be in a recession by next year.
Why such gloom? It starts with accelerating inflation, caused by out-of-control government spending and measures taken by the Biden White House that kept workers on the sidelines. Inflation is also being fueled by soaring energy prices, thanks to lower U.S. production amid reviving growth and now the disruption to Russian oil exports.
The past four recessions have been preceded by sharp hikes in energy prices; $120 oil is a red flag.
To combat spiraling prices, the Federal Reserve must begin raising rates aggressively, which will slow growth. Investors hope the central bank will manage a “soft landing”; history tells us the odds are low, and especially for today’s Fed, which has been behind the curve for months.