River News: Our View

If you were planning for interest rates to come down this year — as everybody on the mountaintops proclaimed would happen — better put away your plans for that new house or car and start calculating ways to continue to pay that sky-high credit card debt because the Fed signaled last week that interest rates might not be coming down after all.

Once again, the experts were all wrong, or maybe just misunderstood, but that’s OK because, you know, they are experts and deserve our respect.

Anyway, Fed chairman Jerome Powell made his hold-your-horses proclamation after the inflation rate surprisingly rose for the third straight month, increasing at a hot 3.5-percent clip. First, the experts said inflation was temporary, then they said the rates would subside over time. This was based on their reasoning that the glut of money they injected into the system really wouldn’t ignite consumer demand, while pandemic-related supply chain disruptions would disappear.

In other words, the experts told us, inflation really was just temporary, just for much longer. 

Now, apparently, “temporary” is going to be your house guest for who knows how much longer, assuming you can afford to keep your house.

All this is what is known, among the college and the affluent professional crowds, as Bidenomics. They all love it. You just print as much money as you can, pump it into the economy, and everybody will be happy. (While you’re at it, open the border completely. Simultaneously turning on the spigots of unrestrained cash and of an unrestrained illegal migrant invasion makes the beautiful people living with their heads in the clouds feel good about themselves.)

Of course, down on the streets and far below the clouds clogged with elites, happy is as happy does, and happy isn’t doing so much right now. In the last few weeks alone, a slew of reports has outlined just what in our lives is getting costlier: Everything.

Owning a home, if you’re trying to get into the market or make a move, takes winning the lottery or giving up your first-born. It’s not just the mortgage interest rates, which are again approaching 7 percent, or the cost of building, but insurance rates are through the roof, so to speak — rates rose by more than 10 percent in 19 states in 2023, and property tax hikes are on the march in most sectors of the country.

Even for those who own homes, staying in them is increasingly a financial chore. One recent analysis pegs the cost of home maintenance in the fourth quarter of 2023 at $6,663 a year, up 8.3 percent from the previous year.

Ditto for utility bills, and Biden’s upcoming clean energy rules are going to drive those even higher. If you listen to the Biden administration, everything on the energy front is hunky-dory, but the fact is that the cost of electricity has risen by 29.4 percent since Old Joe was wheeled into office. 

According to a Wall Street Journal calculation, electricity prices have increased 13 times faster under Biden than in the seven previous years. 

Naturally, Biden’s answer to this is to force the closure of ever more baseload power plants.

All totaled, a Fannie Mae economic analysis shows, property taxes, maintenance, utilities and insurance make up more than half of homeowners’ overall costs, a new record and in effect a second mortgage.

All this has got Americans on the ropes, but no one is playing Rope-A-Dope. In a February online survey of 1,000 homeowners by Clever Real Estate, nearly one in five said they couldn’t afford a $500 emergency repair without going into debt. Another 42 percent said they have delayed home repairs or maintenance because they can’t afford them.

And almost 10 percent of homeowners surveyed by Fannie Mae last year were not confident they could afford their home insurance premiums at their next renewal.

Then there are grocery prices, which remain outrageously stuck at about 25 percent above where they were just four years ago. Staples are even higher. In fact, the Wall Street Journal calculated, it takes $137 to buy the same basket of staples that cost $100 in 2019.

In 2019, the average price of a dozen eggs was $2.36. Today the average cost is $3.84.

Oh, if you’re renting, you don’t get a break. That’s because rent prices are 30 percent above pre-pandemic levels. In March alone, rents were 3.6 percent higher than the previous March. The average growth in 2018 and 2019 was 4.1 percent, so you can see where you are. You might not join the elites in the clouds, but your debt will.

Gasoline was also up in March. In fact, as of mid-April, AAA reports that gas prices were 50 percent higher than when Biden took office, with the national average for a gallon of gas coming in at $3.62, compared to $2.39 on Jan. 20, 2021, when the president was sworn in.

Gas and food alone contributed more than half of the monthly increase in the March index for all items, the government reported. 

Of course, the president’s answer to all this is, if costs are going up for folks, just put more government money in their pockets, and he has undertaken new initiative after new initiative to do just that — canceling student loan debt here, there, and everywhere, for example, in yet another form of stimulus. Never mind that flooding the economy with more government money simply drives inflation around and around in a vicious circle that the average American can’t keep up with.

The president’s other tactic is simply to tell businesses to lower their prices, even if it causes them to go out of business. He used this trick in the early days of his administration, telling gas station operations just to lower the price of fuel, the cost of which his administration had driven through the stratosphere with oil sanctions and more, and now he’s got the same message for grocery stores.

Pure genius.

All of this is complicating matters politically for Joe Biden. His re-election hinges on just a few of his favorite things. 

First, he must keep young voters in his corner. That’s what his obsession with canceling student loan debt is all about.

Second, he must keep black voters in the party tent. That’s troubling for him, given that Trump in the latest Wall Street Journal survey is getting the support of 30 percent of black men. The former president isn’t wowing black women, but neither is Biden, and the latter group is looking for third-party alternatives. Here, the Kennedy brand could come into play.

Third, Biden must keep Trump’s numbers depressed in the suburbs, where Democratic and independent women loathe the former president with a passion not seen since Hillary found out about Monica. 

Biden does have advantages to pull it all off in the end with those voting groups (and this is why he is suddenly ticking up in the polls) — the naive liberalism of most young voters combined with student loan cancellations and the Democratic promise of ever more freebies; and black loyalty to the Democratic Party, which, until hard evidence shows otherwise, will likely bring most black voters back to the party and to Biden by election day.

Which leaves the suburbs as once again the probable deciding factor, and the Democrats have as close to a silver bullet as you can have, or a dagger to thrust into the belly of Republicans everywhere, if you want to look at it that way: Abortion.

Republicans just keep getting thrashed on abortion, and it doesn’t look like the issue is going away anytime soon, even with Trump’s constitutionally and politically correct position against a national abortion ban.

Sure, immigration could hurt the president, but it remains abstract in most suburbs. 

All things being equal, Biden looks well positioned to give Trump a beat-down by election day in the suburbs and walk away with the prize.

But if inflation continues as it appears it might, all things might not be equal. That’s the one place Biden can’t spin his message. It’s the one place where voters feel the pain every time they fill up the car, every time they pay their utility bill, or go to the grocery store.

Inflation as an issue won’t likely abort the abortion issue as a Democratic weapon, but it could hurt just enough to tip a close election, and the latest news just isn’t good for Joe Biden.

Inflation is Joe Biden’s Achilles heel. On election day, when voters cast their ballots, most of their lives will not yet have been touched by the invasion on our southern border. On the other hand, many of those voters will surely have been touched by abortion in one way or another, but for many if not most it won’t be the most recent pain they have felt in their lives. 

That would be their busted grocery and gas and household budgets, the exhaustion of their savings, and the deferral if not the outright implosion of their dreams.

For them, the cost of everything will have gone up, and with that the cost of their democracy. Their votes could well represent the price tag of all their future hopes, as well as those of their children. Rest assured, such voters will cast their votes wisely and carefully.