In a speech to the World Economic Forum last week, U.S. Treasury Secretary Janet Yellen pitched a rebranding of the Biden-run economic agenda as a “modern supply-side” economy. This curveball claim from Yellen, as baseless and disingenuous as it is, will still have some swinging for the fence.
Yellen stated that the Biden admin's “new approach is far more promising than the old supply-side economics, which I see as having been a failed strategy for increasing growth.” What she failed to be clear about is that in her version of supply-side economics, the supply comes from the government, requiring the government to print more money and forging the country deeper into debt.
Yellen and her colleagues have for years argued against supply-side economics. One of their arguments that I have agreed with is that increasing supply does not necessarily mean you will increase demand. Without demand, all the supply in the world is irrelevant.
A case in point is former Federal Reserve Chair Ben Bernanke who for years attempted to create demand with an overabundance of money flow and low interest rates. It didn’t work. Business owners were smart enough to see that it didn’t make sense to borrow money, no matter how low the rates, if there was no demand. We find ourselves in the same place today with consumers who are hunkered down as they look at the big picture of our economy.
According to Yellen, her “modern” supply-side economics “seeks to spur economic growth by both boosting labor supply and raising productivity.” If it actually worked it might be helpful, but history and the Biden administration's ill-formed plans both expose an agenda that is obstinately anti-productivity.
President Obama broke the record for being the first president in history to preside over less than 2% productivity for more than three years—and he did so for his entire eight years in office. Bernanke faithfully manipulated those numbers in an effort to conceal the truth, but productivity is hard to fake.
Now the Federal Reserve is claiming 6% GDP growth in our economy. However, if you look at the numbers released by the Federal Reserve on Friday, it’s difficult to find the growth. A careful look at the numbers shows no growth at all.
Like China, this administration believes it can say whatever it wants, regardless of facts, and people will believe Biden & Co.
It’s impossible to have a 6% GDP growth rate without correlating numbers in sectors like consumer spending, manufacturing and productivity. If this GDP rate were real, we would be seeing the ISM service sector index, manufacturing index, consumer spending and hires all up considerably across the board -- with job openings and quits down considerably.
Mathematical Error or a Flat-Out Lie?
Considering the lack of these contributing factors, we are dealing with either a severe mathematical error or a full out lie.
Will these smoke and mirrors analytics continue to fool Wall Street? Will Americans swing at Janet Yellen’s rebranded curveball, forfeiting even more power to our government? Is this the “new normal” we will all accept, where facts and truth are meaningless? I hope not.
Dan Celia is president and CEO of Financial Issues Stewardship Ministries, Inc., and host of the nationally syndicated radio and television program “Financial Issues,” heard daily on more than 660 stations across the country, reaching millions of households on several TV networks, including FISM-TV. Visit www.financialissues.org.
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