What was the core purpose of Bidenomics? Was it just a meaningless slogan so the Biden Administration could pretend they had an economic plan? Or, was there actual substance to the concept? One might say that there was indeed a purpose to Bidenomics, but it was not to solve the ongoing stagflation crisis. Rather, Bidenomics was a plan to hide or deny the symptoms of the crisis and misinform the American public on the country's fiscal health.
One method which Biden used effectively for around a year was the dumping of the Strategic Oil Reserves onto the global market as a means to drive down CPI, making it appear as if inflation was receding when it really wasn't. Now, this strategy has run its course with oil reserves at their lowest level in decades right as the US may be entering war in the Middle East.
The next tactic was to lie the administration's role in rising US jobs numbers, as Biden claimed that he had the largest increase in employment of any president in history. This was, of course, because Democrat controlled states kept lockdowns going for as long as possible, and when they were forced to reopen jobs numbers surged along with returning business functions. On top of this, trillions of dollars in covid stimulus created a short lived spending bonanza which is now starting to wane.
Another trick has been to misrepresent increased spending and retail numbers as if this is a sign of a strong US consumer; all while ignoring the fact that consumers aren't buying more stuff. They are buying less and spending more because of inflation.
Higher spending and plummeting volume is a bad thing, not a good thing. This is why consumer confidence has dropped to five month lows despite all the spin in the mainstream media about “recovery.”
It may be very difficult for the White House (or the Federal Reserve) to hide the effects of stagflation for much longer as increasingly dismal data for the year is released. The US Court System has published their annual statistics for bankruptcies from September 2022 - September 2023, and the numbers aren't good.
Total bankruptcy filings for the nation rose by 13% in 2023, with 433,658 cases. Corporate bankruptcies increased by 30% this year with 17,051 cases. Bankruptcies fell sharply in 2020 as the covid pandemic precipitated the $8 trillion+ stimulus package. Helicopter money and PPP loans stalled the advance of a growing trend of economic decline in the US, but helped trigger the stagflation crisis as a consequence. Despite the massive fiat money injection, the bankruptcy train is gaining momentum once again.
Expectations for next year are not encouraging. Global analysts are predicting a “fall of zombies” in 2024 as rising debt costs slowly squeeze corporations and small businesses alike. Businesses facing high debt costs after years of low rates will have to compete to secure enough cash in the biggest corporate refinancing rush seen for years, just as banks rein in risk ahead of stricter capital rules.
Failure to secure the cash they need at rates they can afford, could lead to mass insolvencies and layoffs in the near term. Can Biden keep the facade going until elections next November? It looks unlikely.