The Coming Biden/Harris Recession

As of noon today, in response to the poor job market report, the Dow was down nine hundred points. The investors and economists were anticipating a report showing 175,000 new non-farm jobs created in July, but instead, only 114,000 jobs were reported.

In addition, unemployment ticked up to 4 4% from a June number at 4.1%. All this negative reporting  sparked fears that a recession was on the horizon, if our economy was not already in the throes of one.

In any event, Wall Street may be finally catching up to Main Street. For months, actually for almost three years, inflation has raged out of control no matter what the Biden Administration has said.  Or did.

As a retired banker, I can assure you that I learned early on that two things drive the American economy: the cost of housing and the cost of energy. While they may not appear to be verticals, their paths cross constantly.

You need energy to get material and product from Point A to Point B. To do it inexpensively is paramount to keeping the cost of material and product low and affordable.

In order to build, remodel or refurbish a house, the cost of materials and product, and the cost of money needed (interest on loans) has to be low. If the energy costs are high, the cost for the product needs to absorb that cost, which translates to a higher interest rate.

All other costs are contingent on these two factors. Hence, Economics 101.

And while the left in this country is pushing for outrageous goals to force us to be green by unreasonable time frames, it is still noble to aspire for a better world for our posterity. But until we can efficiently harness green energy as cheaply as we can use fossil fuel, it will be a goal and not a reality.

We did learn from living through the pandemic, that many jobs can be done from home. The use of gasoline was reduced because the car was in the driveway. All the time. We learned to order our groceries and used new services to deliver them. We used Zoom and Meet to hold meetings with staff and business clients. And more new solutions were developed and used to live our daily lives.

This afternoon, the market made back almost 300 points it had lost this morning, closing down 610 points for the session. This weekend, all eyes will be on the futures which will give us a good indication if the market will continue to recover its loss from today, or repeat that weekend in October, 1987 when it continued its drop dramatically for several more days.

Ultimately, we learned today that Bidenomics isn’t working and many more people fear losing their jobs in August and the months to come.

And prices for food and other necessities will continue to climb until we lower the cost of energy and housing. That MUST BE the government’s first priority. Throwing money at it won’t solve the problem.

It is time for Biden and Harris to realize and admit THEY are wrong.