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Now Comes The Big Blame On Big (Whatever)

As we wrote on June 10th, August 10th and 11th, September 3rd, and November 2nd, President Biden's policy decisions have been killing our economy. From killing the Keystone XL pipeline to closing ANWAR to the new "Green" requirements for ports, the economy killing blows just keep on coming. And all of that is before we even get into his COVID policies which have crippled our transportation network and have been emulated and echoed by Democrat governors all over the country.

I suppose we also ought to give honorable mention to his trucking reform recommendations which were adopted by California (or came from California, you can argue causality either way since they were likely built together by the party) and his attempted stimulus forced minimum wage fiat (it has been thoroughly chronicled by multiple outlets how the Democrat party is using Stimulus payments to attempt to force employers to raise wage points for their employees).

Yet now, the Biden Administration is taking a cue from Senator Elizabeth Warren, and is asking the Federal Trade Commission (FTC) to look into the "profit margins" of Americas largest corporate retailers and resellers. After all, they must be price gouging, how else could this have happened?

Well, it is really not hard to connect the dots.

First, the Biden Administration threatened to raise the minimum wage and to disrupt corporate profit margins. This set the tone for the market to prepare for contraction and/or inflation.

Second, the Biden Administration killed the Keystone XL pipeline. This tipped off oil speculators that Biden was every bit as ready to go after American oil production as he had signaled. In response, they began buying up every barrel they could find which, unsurprisingly to anyone who understands supply and demand economics, caused the price to go up. Since gas companies are not going to voluntarily reduce their profit margins, they passed the higher costs on to their consumers. This got bad enough that the President had to go and beg OPEC+ to pump more. You can see how effective that was.

Thirdly, he imposed harsh new rules for "Green Compliance" on American ports of entry and then hit them with a double whammy of COVID lockdowns and stimulus which led to many of their longshoremen sitting at home and not working. When no one is unloading ships, nothing is getting to your neighborhood stores. This mixed with California's new trucking laws and harsh continued COVID responses has left many ships out at sea and many people in need of what they have on them.

Fourthly, his response to inflation rising from the stimulus money given out that was not backed by any Gross Domestic Product, was to give more stimulus money to attempt to "kick start the economy." Except, unlike Trump who first eased COVID restrictions and then used the stimuluses to kickstart a dormant economy, Biden choked off the economy with enhanced COVID regulations and then attempted to stimulus it through anyway.

It ended up working out just like you expect. No better than an old car with a flooded engine (for those who can remember what that is).

So now, instead of stepping up to the podium and clearly laying out the fact that his plan has failed and that his policies have failed, the President has decided to blame the companies for not reducing their profit margins during a crisis.

Oh, he will not say it that way out loud, he will dress it up with lipstick and say that they are "gouging" customers and that they are "being unresponsive to the state of the country around them." Yet they have not changed, their margins have not changed, the valuation that they are asking for their product has not changed, it is simply adjusted for both cost increases and inflation. You can put lipstick on a pig, but in the end, it is still a pig.

In other words, they are not taking less for their work or their product. That is what he is really mad about.

Yet why should they? Their employees will not take pay cuts for the sake of the economy, and right now many are being paid even more than they normally would because of the lack of workers. Their suppliers and vendors will not give them discounted good and services for their production. The trucking companies will not give them a reduced rate for transportation, and YOU KNOW that Warren Buffet's Berkshire Hathaway rail company will not be "taking one for the team."

So the administration wants them to what, reduce profits margins?

For all those of you yelling, "YES," have you considered the consequences of that decision?

Let us just take Wal-Mart for example. If they were to reduce profit margins and thereby reduce gains, their stock price would drop. When their stock price drops, their portfolio drops as well which means that their business credit ability drops. If it drops badly enough, they might have to engage in a buy back to prop it up. If they do that, they have to cut into operating cash. How do you free up more operating cash? Well you reduce operations.

What does that look like? Well, you have to either close locations or lay off employees. It is not like Wal-Mart has billions of dollars in the bank. That money is carefully invested in buildings, trucks, infrastructure, and investments. To free up that money for use to do a buy back they would have to free it up by selling those assets off.

So, congratulations, you won, Wal-Mart got less profit, but now the people that worked for them are the ones suffering for it. The only people you hurt are the people at the bottom. Wal-Mart can function with a few more self checkout lanes and a little less staff.

They cannot operate without a senior executive staff.

You see, this mythos that these companies have all of this money sitting in the bank just waiting to be spent to buoy the economy is ridiculous. The cost of freeing up that money for use in that way would leave us in an even worse economic condition than we are today which is already a worse off position than we were in just two years ago.

Everything that Biden has done to attempt to "help the little guy" has done exactly what we have been saying it will do since before he took office, it has hurt the little guy. It always does, as Democrat's "helpful" policies have always done. But this is what is expected when you see the world in ideals rather than realism. You always have to deal with what is, not what you want it to be.

No, this mess is completely the making of President Biden and his anti-business and anti-economy policies, period. Anyone who actually believed him and his campaign about being able to "take from the rich to feed to poor" is now seeing the results of their decision.

You can never raise the poor into prosperity by attacking those who create economic wealth and jobs. Doing so only ever causes severe damage to those who depend on those same people for their livelihoods.

You can lament the "greed" that keeps it that way, but you will never change it.

That is just life.

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