Unleash Prosperity Hotline – Weekend Edition Issue #691
01/13/2023, 01/14/2023, 01/15/2023
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1) Biden Takes A Bow For Reducing The Inflation He Himself Created
Regular Hotline readers will recall that we predicted back in the late summer that inflation had peaked and would recede in the months ahead. This was because the forward-looking indicators we think are most reliable – such as the big slowdown in M2 growth, the flattening of the CRB commodities index, and the stable gold price - were all signaling lower inflation to come.
The chart below sent by one of our readers is highly instructive. Look what has happened to the growth of the monetary base. The Fed massively expanded the money supply in 2021 through the Summer of 2022 in order to accommodate the trillions of dollars of government spending by Biden.
More government spending and easy money from the Fed allowed inflation to explode to 9.1% last summer. Remember, when Biden entered office the inflation rate was 1.4%.
The damage to family finances from this two-year misadventure of rapid Bidenflation has been devastating. On average prices for goods and services are up almost 13% in two years, meaning month after month real incomes for the middle class have fallen.
Where do we go from here? Our view is that at this point we need at most one more Fed rate hike. Now the heavy lifting to repair the economy rests with Congress. The cancer cell in the U.S. economy is the runaway government spending and debt – which is feeding inflation and causing a multitrillion-dollar misallocation of capital in the United States from high (private sector) to low (government sector) return investments. Sorry, spending $300 billion on windmills and solar panels and hundreds of billions more to pay people NOT to work is a fool’s errand. Fraudsters have walked away with half a trillion of taxpayer money – ripping off the Medicaid, UI, food stamps, and PPP programs.
Republicans in the House must secure at least a $1 to $2 trillion package of cuts in federal expenditures over the next decade. Federal spending surged past the $6 trillion mark in 2022 with big increases built in for 2023 thanks to the unconscionable omnibus-ted spending bill that was passed before Christmas.
Below is a good chart from CNBC showing where consumer prices rose the most last year. Medical insurance rose by 8%. We thought the affordable care act was supposed to lower health costs and make them more “affordable.”
3) Can Sarah Huckabee Make Arkansas The 10th No Income Tax State?
We’ve often said that the real talent pool of the Republican party is the governors. We are excited to report that Sarah Huckabee Sanders, the former Trump Administration press secretary who won the Arkansas governorship in a landslide last year, has hit the ground running.
“A bold conservative reformer is coming to the governor’s mansion,” she announced at her inauguration.
Here is the Huckabee agenda:
A state hiring freeze, which would also freeze any new regulations.
A tax cut during her first year in office, with the goal of eliminating the state income tax completely. She noted that neighboring Tennessee and Texas are seeing massive job growth in part to their no-tax status.
An executive order to provide salary incentives for high-performing teachers.
An executive order to block any “left-wing political agenda” in Arkansas schools.
An expansion of charter schools and a review of whether public schools are being transparent with parents about their curriculum.
Sanders’ education agenda is being shaped by her new Secretary of Education Jacob Oliva, a former teacher who previously worked for Florida Gov. Ron DeSantis as head of the Florida Department of Education.
We recall tangling with Mike Huckabee, Sarah’s father when he was governor of Arkansas from 1996 to 2007 as he pursued tax hikes and higher spending. It looks like his daughter will be going in an entirely welcome opposite direction.
4) Biden: We Never Said We Wanted To Ban Gas Stoves! Uh Huh!
We and many others reported on the Biden administration's secret plan to move toward banning gas stoves and the outcry (mostly from women) has been so ferocious that the Biden administration has been forced to sprint backward. Their trial balloon has crashed and burned.
This is all just a vast right-wing conspiracy – the Biden administration is now assuring us.
Hardly. Here’s the real story. Earlier this week Consumer Product Safety Commissioner Richard Trumka, Jr. jumped the gun in announcing the plan under consideration. The chairman of the CPSC and Biden himself claimed the opposite. The media is dutifully working overtime to transform the story into a right-wing "culture war" fantasy:
The problem with this story line for the Democrats is they DO want to declare war on gas stoves – and they are ALREADY banning them around the country. Why? Because they hate anything to do with fossil fuels.
In New York the governor asked the legislature to enact a statewide ban in an official legislative proposal just days ago:
There are already local bans on gas appliances in new construction in San Francisco, Seattle, Los Angeles, and New York City.
The threat to our stoves is so clear and present that 20 states (in green below) are being proactive and have pre-empted local governments from banning gas ovens. Kudos to them.
