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It’s Biden v. inflation — and Biden’s losing

President Biden wants Americans to know: Curbing inflation is his top, top, top priority.

He recently penned an op-ed published in the Wall Street Journal with this headline: “My Plan for Fighting Inflation.” The plan didn’t contain much new in the anti-inflation category, but it did contain a red alert, which may have been the point.

The piece prepared the public for an economic slowdown, the likely result of the Federal Reserve’s commitment to reining in its reckless monetary policy. Biden warns that in coming months “growth will look different” and forecasts that job gains will drop from recent monthly totals of 500,000 or so and head lower, to maybe about 150,000.

This will not be “cause for concern,” Biden writes, “it will be a sign that we are successfully moving into the next phase of recovery…”

The last thing Americans were told not to worry about was inflation, so that advisory gives us pause. It was last July – when the Consumer Price Index came in at 0.9 percent, significantly higher than the prior month’s 0.6 percent price increase – that Biden gave an address celebrating the bang-up job he had done in his first six months in office.

He assured us: “Some folks have raised worries that this could be a sign of persistent inflation. But that’s not our view. Our experts believe and the data shows that most of the price increases we’ve seen are — were expected and expected to be temporary.”

In response to a question that same day, Biden was even more dismissive, saying “There’s nobody suggesting there’s unchecked inflation on the way — no serious economist.” That was not true.

Now we worry, and investors are worried, about the impact of the Federal Reserve’s efforts to squeeze out inflation by raising interest rates and shrinking its $9 trillion balance sheet. Optimists hope we can get through this tightening cycle without plunging into a recession, but no one knows. 

Least of all Biden. He hopes that in coming months, as growth sputters and job gains dry up, he will be able to pitch this as normal — a successful “transition” to a slow-growth economy. Just like Obama, Biden will explain to voters that we must settle for mediocre growth and lowered expectations.

This is not a White House, or a president, that expects to win.

But it is a White House eager to scapegoat others for its multiple failures. It was not surprising to see Biden haul Federal Reserve Chairman Jerome Powell into the Oval Office, as part of his posturing on inflation.

After laying out his plan, Biden invited Powell over to tell him just how important fighting inflation is. In the presence, it should be noted, of Treasury Secretary Janet Yellen, who has seemingly been in the witness protection program of late. Maybe she is embarrassed by having gone along with Democrats’ reckless spending in 2021 or having completely dropped the ball on inflation and instead parroting Biden’s absurd talking points about Build Back Better. Either way, Yellen has been curiously invisible during this period of economic upheaval.

Biden made a big point of insisting that even though he had summoned Powell to the Oval Office, he was not going to interfere with the Fed’s actions to slow the economy. The president compared himself favorably with his predecessor because he has left the Fed alone, instead of “inappropriately” trying to influence that independent board’s actions.

The only problem with this bizarre boast is that Trump was actually right when he complained that the Fed was hiking rates at the wrong time (with inflation below 2 percent and Europe heading into recession, which would have slowed our growth), and Biden was wrong not to demand the Fed take action earlier.

Biden’s op-ed effectively handed the inflation-bashing baton over to Powell, saying the Fed “has a primary responsibility to control inflation.”  

This is a comforting position for the White House because, in coming months as growth slows, the White House will pin the blame for a softening jobs market on Powell. Indeed, there are already signs that the slight ratcheting up of interest rates is taking a toll.

Housing, a key sector, has been hit by higher mortgage rates. The National Association of Realtors reports that existing home sales fell in April, for the third month in a row; at the same time, the Census Bureau recently reported that new single-family home permits dropped in April. 

Meanwhile, hiring is beginning to soften. The four-week moving average of initial unemployment claims has begun to inch up, and numerous companies, especially in the tech sector, have announced a slowdown in hiring.

None of this is surprising, but it is shocking that even as his approval ratings collapse and his party faces a thumping in November, President Biden is clinging for dear life to a “Green New World” agenda that stands in the way of him tackling higher prices.

Biden’s obsession with the green economy clearly takes precedence. Pandering to climate zealots is more important than providing affordable gasoline to take America’s workers to their jobs. It is more critical than making sure people can afford fuel oil or natural gas to heat their homes next winter. It tops making sure we have a steady supply of electricity heading into summer.

Climate is everything.

But as we approach the summer months, which analysts warn may contain rolling blackouts and soaring electricity prices, the cost of Biden’s war on fossil fuels will become even more evident. Powell will not be responsible, nor will Russian President Vladimir Putin, or greedy meat processors or gas stations.

The gross mismanagement of our energy resources – the squandering of our 100-year supplies of oil and natural gas – will fall directly on Biden, as will a stalling economy and continued inflation. Unhappily for Joe, voters place the buck at his door.

Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.

Source: TEST FEED1

Ohio Senate race in virtual deadlock: poll

The Ohio Senate race between Republican J.D. Vance and Rep. Tim Ryan (D) is in a virtual deadlock, according to a new poll.

The USA Today Network Ohio/Suffolk University survey released Wednesday found that Vance leads Ryan by just more than 2 percentage points among likely Ohio voters, well within the margin of error.

Vance received the support of 41.6 percent of voters questioned compared to Ryan’s 39.4 percent. Almost 17 percent of respondents percent remain undecided in the closely watched race to replace retiring Sen. Rob Portman (R).

Additionally, 39.8 percent of respondents said they find Ryan more favorable, compared to the 34.6 who say the same about Vance.

While support for the candidates largely falls upon party lines, Ryan is trying to appeal to moderates in an attempt to take away more votes from Vance, as the GOP candidate struggled for much of the race to break out of the middle of the GOP primary pack. When former President Trump endorsed Vance in mid-April, the Republican candidate’s popularity improved, with many seeing the endorsement as a key test of his strength within the GOP.

While Ryan continues to run a moderate campaign, David Paleologos, director of Suffolk University’s Political Research Center, said that he may lose some ground as many Ohio residents grow more frustrated with the economy and President Biden’s leadership.

“Here’s Ryan trying to emerge from the quicksand … and he’s getting drawn back into it because the problem of the economy is so ominous in Ohio,” Paleologos said, according to the Cincinnati Enquirer.

Many believe Biden will be a hurdle for Ryan, according to the new survey, as 49.4 percent of Ohio voters said they want their vote in November to change the direction in which Biden has led the country.

The poll of 500 likely Ohio midterm voters, conducted between May 22-24, has a margin of error of 4 percentage points.

Source: TEST FEED1

97 percent in Arizona poll concerned by rising gas prices

The overwhelming majority of Arizonans are concerned about rising gas prices, according to a new poll out Wednesday.

The Arizona Public Opinion Pulse (AZPOP) survey by OH Predictive Insights (OHPI) showed that 97 percent of Arizona voters say they are concerned by gas prices.

Additionally, 91 percent of Arizonans participating in the survey said they expected the already high gas prices to rise again a month from now.

Only 9 percent said they expect prices to be the same or lower.

In terms of blame, the poll found that 36 percent of respondents blamed rising gas prices on President Biden, 26 percent blamed oil companies and 23 percent blamed the ongoing Russia-Ukraine conflict.

The survey also found that four in five respondents said they were concerned about supply shortages.

“The long-term anticipated impacts from the pandemic are surfacing as it globally disrupts the supply chain, heightening concern for Arizonans as supply shortage continues to burden virtually everyone, “ Mike Noble, OHPI chief of research, said in a statement.

“With statistically all Arizona voters [97 percent] concerned with gas prices and 80 percent concerned with supply shortages, it is clear that pocketbook issues are a national, bipartisan pain point that must be tackled by leadership heading into this pivotal midterm election,” Noble added.

The survey was conducted between May 9 and May 16 and included 938 registered voters in Arizona. It has a margin of error of plus or minus 3.3 percentage points. 

The results come as gas prices have hit record highs and continue to climb after already surging significantly earlier this year when governments turned away energy supplies from Moscow amid Russia’s invasion of Ukraine. 

As of Wednesday, the average gas price in Arizona was $4.973 per gallon, above the national average of $4.671, according to the American Automobile Association.

Source: TEST FEED1

Crucial Crimea: Why the illegally occupied territory must be returned to Ukraine

After a hesitant beginning, the West has rallied to provide Ukraine the military assistance it needs to check Russian aggression. Longer-range rocket systems should be part of a comprehensive strategy.

But Russian President Vladimir Putin understood from the outset the importance of  the Black Sea. In the face of a catastrophic world food crisis, all eyes have now turned to the Russian blockade of Ukrainian ports. The ultimate key to winning the war is the return of occupied Crimea. He who controls Crimea controls the Black Sea, and that’s important for several reasons.

Russia may be losing the land war, but it’s winning the war at sea. The tale of Russian maritime dominance comes in two parts: destruction and denial. It started in 2014, when Russia raced to annex the Crimean peninsula in less than 48 hours. Moscow destroyed, or seized, most of the Ukrainian navy, making Kyiv defenseless in the Black Sea. As soon as roads and wires to mainland Ukraine were cut, Moscow started adding submarines, frigates, missile defense and other anti-access area denial capabilities to the region.

Power projection from the Black Sea permitted Russia’s Syria intervention. Long-range Russian military capabilities capable of striking NATO territory made this maritime domain a no-go zone.

Since 2016, Putin has poured billions of dollars into building the “Crimean bridge.” For years now, Moscow has used the excuse of the illegal bridge to restrict or at times block Ukrainian industry exports from Mariupol. But Putin never intended to stop here. The Azov Sea blockade was one indicator. And in only three months of war, Russia has already obliterated the key port city of Mariupol. What’s left is the jewel, the Port of Odessa.

Moscow has not been able to decimate and capture Odessa. Russia proceeded with missile terrorism and blockade: It deploys its Black Sea fleet – including an estimated 20 warships – plus the placement of mines (perhaps as many as 400 mines already) to own this space. None of Russia’s maritime warfare is possible without Crimea and Russia’s Black Sea fleet. Russia can lose the war on land but still cripple the Ukrainian economy and wreak havoc around the world.

The U.S. and UK are now onto proposals to create a humanitarian corridor to allow grain shipments out of Odessa. This is complicated, to put it mildly. Commercials ships need escorts. Escorts must navigate mined waters. Moscow must grant permission for passage. No surprise that Putin is willing to consider granting permission in exchange for lifting sanctions.

In the short term, we must find ways around the current blockade, if we’re to avert starvation this summer. But the ultimate key to solving the problem and winning the war is getting occupied Crimea back to Ukraine.

It’s become a mantra that direct conflict with Russia must be avoided at all costs. But the proxy war is already on. It’s finally time for the U.S. and its allies to develop a proper strategy to win. It involves risk. But placing Crimea now at the center of our deliberations is a must.

Recovering Crimea will require additional and robust Western military support. The newly approved $40 billion from Congress helps Ukrainians in the Donbas. Recovering Crimea will entail different kinds of assistance. The Danish Harpoon anti-ship missiles on their way now are a good start. Putin’s bridge must be destroyed (something Ukrainians have already called for). Once the peninsula is cut off from re-supply, Ukraine can launch a major ground counter-offensive to neutralize Russian military capabilities.

We know by now that Ukrainians will fight fiercely. They’ll need to be equipped to take out Russian air defense systems. This will have to include long-range rocket systems. We should prepare for a long siege.

There’s a war still to be won on land. But a crucial element of any lasting peace is Ukrainian victory in the Black Sea. For this to happen, Russia’s illegal occupation of Crimea must be ended. Without this, the war will drag on and the world will feel its effect.

Iulia Joja teaches at Georgetown and George Washington Universities and runs the Black Sea Security program at the Middle East Institute in Washington, D.C.

Source: TEST FEED1

Zelensky: Russian strikes near chemical plants 'just madness'

Ukrainian President Volodymyr Zelensky on Tuesday said that Russia’s airstrikes near chemical plants in his country are “no longer surprising” but “just madness.”

“Given the presence of large-scale chemical production in Severodonetsk, the Russian army’s strikes there, including blind air bombing, are just madness,” Zelensky said.

“But on the 97th day of such a war, it is no longer surprising that for the Russian military, for Russian commanders, for Russian soldiers, any madness is absolutely acceptable,” he added.

The president also specifically said areas like Severodonetsk, Lysychansk and Kurakhove are “at the epicenter of the confrontation.”

“Everyone at all levels must now be lobbyists for the supply of modern heavy weapons and modern artillery to our state. All those systems that can really speed up the victory of Ukraine,” Zelensky continued. 

His remarks come as the Biden administration announced that it would ​​send long-range rocket systems as part of a $700 million weapons package to the besieged country. 

The package including High Mobility Artillery Rocket Systems (HIMARS) is intended to repel Russian systems but not to be used to strike Russian territory.

“We have moved quickly to send Ukraine a significant amount of weaponry and ammunition so it can fight on the battlefield and be in the strongest possible position at the negotiating table,” Biden said in a guest essay for The New York Times published Tuesday.

“That’s why I’ve decided that we will provide the Ukrainians with more advanced rocket systems and munitions that will enable them to more precisely strike key targets on the battlefield in Ukraine,” he added.

Approximately $4 billion in U.S. aid has been sent to Ukraine since Russia began its invasion on Feb. 24. 

Source: TEST FEED1

Mr. President: Keep your focus on tax fairness

With conflict abroad and midterms ticking closer, the president has a very narrow window to right both his political fortunes and legislative agenda.

President Biden’s budget proposal landed with a familiar thud on Capitol Hill this spring. In and of itself, this was not altogether that surprising. Most presidential budgets are aspirational in nature and face the Congressional meat-grinder before ever becoming law. But it was still surprising to see the administration use the budget introduction to default back to a series of stale tax proposals — chief among them a sizeable hike in the corporate tax rate — that have long been disregarded as a combination of bad politics and bad policy. Recycling them was neither subtle nor savvy, as they were known to be DOA.

As Congress returns to Washington after the Memorial Day recess, speculation will be rampant over where negotiations stand on a reconciliation package and how to pay for it. Democrats desperately need a win, and they need to deliver on at least some of their campaign promises before voters go to the polls in November. Sen. Joe Manchin (D-W.Va.) seems justifiably concerned about record-high inflation which may give Democrats an opportunity to finally eke out a deal… if Democrats don’t get in their own way.

The president and Democrats in Congress should forget about a divisive corporate tax rate increase. Raising the rate does not have majority support in Congress, and more importantly, fails to achieve the administration’s stated goal of tax fairness as it would disproportionately fall on full-freight payers like retailers who already pay their fair share in corporate taxes.

Instead, if the president is serious about advancing his domestic policy priorities, he should revisit the text from his State of the Union. On a broad bipartisan basis, the American people believe it is unfair when a highly profitable company pays little to nothing in federal corporate taxes. A domestic minimum tax placed on such companies is widely supported by voters in both political parties and should be included in any proposal that makes it to the president’s desk.

Retailers are strong advocates for a competitive corporate tax rate, where all profitable companies contribute to the needs of the nation. Rates can stay where they are if all entities making large profits are paying taxes. We support a well-crafted domestic minimum tax that corrects the inequities in the current code which currently allows many companies to legally pay nothing in federal taxes while retailers and other industries (not to mention individuals) pay full freight. If the president returns to the goal of achieving tax fairness, he can score a significant political victory.

In an evenly divided Senate, focusing on tax fairness is the smartest way to fund a large portion of the president’s domestic agenda before the midterms. And for many of those policies, there isn’t time to waste. The president’s agenda includes a significant investment in a 21^st century energy economy to better fight the growing threats of climate change, which retailers agree deserves immediate attention.

Addressing the uneven burdens in the current tax code, combined with reducing the tax gap by collecting taxes already owed, is enough to reduce the deficit and fund significant investments in the president’s domestic agenda.

Tax fairness, deficit reduction and major investments in fighting climate change — this is a triple lindy opportunity for the president and Democrats, and now is the time to stick the landing. They just need to seize the opportunity that’s right in front of them. 

Hana Greenberg is the vice president of tax at the Retail Industry Leaders Association.

Source: TEST FEED1

Our changing energy landscape will stretch beyond Europe

In the early 2000s, the European Union commissioned a war game from my political risk firm to look at whether its then-current distribution of energy imports made strategic sense. The “Big Three” for European natural gas production were then Russia, Algeria and Norway, in decreasing order of political risk.

Unsurprisingly, the outcome of the game led to the conclusion that overreliance on Moscow for oil and natural gas imports was strategically fraught with peril, since dependence on the Kremlin for energy would bleed into geostrategic considerations. Simply put, it is hard to be cross with people who are heating your homes. Instead, the game’s outcome led to recommendations for Europe to import more liquified natural gas (LNG) from the United States and Qatar, two countries from whom Europe was unlikely to receive any calamitous geostrategic surprises, as opposed to Russian piped gas. Obviously, the recommendations were ignored and  Europe sleepwalked into its present calamitous situation.

Worse, during the sleepy end-days of Angela Merkel’s premiership in Germany, Berlin actually advocated strongly for the Nord Stream 2 pipeline, which would have left the most important economy in Europe utterly dependent on Russian natural gas. To his detriment, President Biden was perfectly prepared to go along with this daft policy in order to avoid a fuss — that is, until Russia declared war on Ukraine. 

Amid all the noise of the 24-hour news cycle about the war, it is vitally important to take a longer view of what is going on in terms of energy geopolitics. Recently, I had such a mountaintop view while reading Alexander Mirchev’s “The Prologue: The Alternative Energy Megatrend in the Age of Great Power Competition.” Do not let his sometimes-verbose writing get in the way; Mirchev paints a panoramic picture of the coming “brave new world” in which energy, defense and economics will be integrated more than ever.

As Henry Kissinger put it in assessing Mirchev’s work, the book offers a “sweeping exploration of the changing energy landscape that looks far into the future.” This is what is needed as Europe scrambles to wean itself from Russian energy after decades of dependence. Mirchev puts the energy question in larger terms, accepting that the race to develop alternative energy supplies is so advanced that it will amount to a megatrend in our new era, and this new disruption — much as happened with the internet — will impact energy independence issues, environmental security and defense and geopolitical considerations.

Rather than look at all these aspects in the usual fruit-fly manner, dutifully listing them as if a laundry list, Mirchev instead uses this coming megatrend as a guide to assess the geopolitical landscape. He points out that almost every area of public policy will be securitized, because of their interconnections and the West’s increasingly fierce competition with the emerging Sino-Russia axis.

Germany’s example is merely a glaring case in point, as a decades-old energy policy that was unconcerned with security of supply has come back to bite Berlin, and hard. It is simply impossible in this case — as should have been clear — to separate energy policy from foreign policy. Only now, with Germany’s green energy minister, Robert Habeck, at the helm, has Mirchev’s salient point been taken to heart.

In my experience, this holistic analytical approach is typically lacking among many decision-makers, who are seemingly unaware that energy, macro-economic, technological and strategic factors are all merely dots in the pointillist painting. Only by taking a step back and connecting the dots can we make sense of the whole, with understanding and good policy to follow.  

My only real criticism of Mirchev’s work is also, perhaps, its strength: In laying out a roadmap for the world ahead, this book sometimes leaves one hungry for specifics, for more compass points to fill in our map. But in a foreign policy world where there is far too little ambition, this criticism amounts to a sort of back-handed compliment.

I wish the Germans had had a chance to read Mirchev’s work years ago. A good deal of the present crisis in European energy and strategic policy could have been averted. However, it is never too late to learn and Mirchev has given the Europeans, and the rest of us, much food for thought.

Dr. John C. Hulsman is president and managing partner of John C. Hulsman Enterprises, a global political-risk consulting firm headquartered in Milan, Germany and London. A life member of the U.S. Council on Foreign Relations, he is a contributing editor for Aspenia, the flagship foreign policy journal of The Aspen Institute, Italy. Follow him on Twitter @JohnHulsman1.

Source: TEST FEED1

Texas police: School door shut but didn't lock before attack

An exterior door at Robb Elementary School did not lock when it was closed by a teacher shortly before a gunman used it to get inside and kill 19 students and two teachers, leaving investigators searching to determine why, state police said Tuesday.

State police initially said a teacher had propped the door open shortly before Salvador Ramos, 18, entered the school in Uvalde, Texas, on May 24.

They have now determined that the teacher, who has not been identified, propped the door open with a rock, but then removed the rock and closed the door when she realized there was a shooter on campus, said Travis Considine, chief communications officer for the Texas Department of Public Safety. But, Considine said, the door that was designed to lock when shut did not lock.

“We did verify she closed the door. The door did not lock. We know that much and now investigators are looking into why it did not lock,” Considine said.

Investigators confirmed the detail through additional video footage reviewed since Friday’s news conference when authorities first said that the door had been left propped open. Authorities did not state at that time what had been used to prop open the door.

Considine said the teacher initially propped the door open but ran back inside to get her phone and call 911 when Ramos crashed his truck on campus.

“She came back out while on her phone, she heard someone yell, ‘He has a gun!’, she saw him jump the fence and that he had a gun, so she ran back inside,” removing the rock when she did, Considine said.

Steve McCraw, the head of DPS, hadn’t said why the teacher initially propped open the door when it was first detailed Friday. The first mention of a door left propped open, which officials now say didn’t happen, led to questions about the teacher’s actions and whether she had made a horrific mistake.

Since the shooting, law enforcement and state officials have struggled to present an accurate timeline and details of the event and how police responded, sometimes providing conflicting information or withdrawing some statements hours later. State police have said some accounts were preliminary and may change as more witnesses are interviewed.

San Antonio attorney Don Flanary told the San Antonio Express-News that the Robb Elementary School employee, whom he’s not naming, first propped open the door to carry food from a car to a classroom, and that she immediately moved to close it when she realized the danger.

“She kicked the rock away when she went back in. She remembers pulling the door closed while telling 911 that he was shooting,” Flanary told the newspaper.

“She thought the door would lock because that door is always supposed to be locked,” Flanary said.

Flanary did not immediately return telephone messages left at his office from The Associated Press.

Investigators are also still trying to interview Uvalde Consolidated Independent School District Police Chief Pete Arredondo, who state police have said was the commander of the school shooting scene while it happened. Arredondo has not responded to multiple requests for comment from The Associated Press.

McCraw, the head of the Texas Department of Public Safety, has said Arredondo treated the active scene as a hostage situation and as if children were no longer at risk, while 19 police officers waited in the school hallway outside the classroom where Ramos was.

McCraw called that the “wrong decision,” saying the focus of the investigation has shifted to Arredondo and the police response.

Other officers in the Uvalde city and schools police departments continue to sit for interviews and provide statements, but Arredondo has not responded to DPS requests for two days, Considine said.

Later Tuesday, the Combined Law Enforcement Association of Texas, which represents police officers, urged its member officers to cooperate with “all government investigations” into the shooting and police response and endorsed a federal probe already announced by the Justice Department.

The organization was also sharply critical of the constantly changing narrative of events that has emerged so far.

“There has been a great deal of false and misleading information in the aftermath of this tragedy. Some of the information came from the very highest levels of government and law enforcement,” CLEAT said. “Sources that Texans once saw as iron-clad and completely reliable have now been proven false.”

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More on the school shooting in Uvalde, Texas: https://apnews.com/hub/uvalde-school-shooting

Source: TEST FEED1