{"id":2088812,"date":"2023-11-03T08:06:01","date_gmt":"2023-11-03T12:06:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/no-bidenomics-wont-end-in-a-soft-landing\/"},"modified":"2023-11-03T08:10:41","modified_gmt":"2023-11-03T12:10:41","slug":"no-bidenomics-wont-end-in-a-soft-landing","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/no-bidenomics-wont-end-in-a-soft-landing\/","title":{"rendered":"Bidenomics won&#8217;t lead to a smooth outcome."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">14<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fno-bidenomics-wont-end-in-a-soft-landing%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2088812&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"article-content\">\n<blockquote>\n<p>In the\u200d contrast \u2064between elites \u2014 \u2064in Washington and \u200con\u200c Wall Street \u2014 and the working-class Americans across our country, two words banded about\u200b in recent months stand out: \u201csoft landing.\u201d<\/p>\n<p>In economic\u2062 parlance, the\u2062 term refers to whether a combination of monetary policy decisions \u200bby \u200bthe Federal Reserve, macroeconomic forces, and sheer good luck \u200ccan manage to lower\u200c inflation levels\u2063 without crushing economic activity to the point\u200c that it causes a recession\u200d and\/or massive job losses.<\/p>\n<\/blockquote>\n<p>But\u2062 to people in the nation\u2019s \u2062heartland,\u2063 the words \u201csoft landing,\u201d as they relate to our \u200deconomy, represent something\u2062 between a\u2063 misnomer and \u2064an insult. On multiple levels, millions\u200d of families\u200b have \u2062been getting kicked\u200c in the teeth for years \u2014 and will\u2063 continue to do so, whether a recession arrives\u2062 or not. To suggest that there\u2019s anything \u201csoft\u201d about it just shows the people who run our economy are out of touch.<\/p>\n<h2 class=\"wp-block-heading\">Inflation\u200d Baked into\u2064 Prices<\/h2>\n<p>A few weeks \u2064ago, the <a href=\"https:\/\/www.wsj.com\/economy\/central-banking\/cpi-report-september-mild-inflation-862679f7?mod=trending_now_news_4\" target=\"_blank\" rel=\"noreferrer noopener\">latest inflation report<\/a> showed \u200cthat the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/inflation-rises-again-hits-5-4\/\" title=\"Inflation Rises Again, Hits 5.4%\">consumer price index rose<\/a> by \u201conly\u201d 3.7 percent in September. That\u2019s\u200d down by more\u2063 than half from the 40-year high of\u2062 9.1 percent in June 2022. \u200cBut lower levels of inflation \u200dhaven\u2019t begun to solve the problems created by \u201cBidenomics.\u201d<\/p>\n<p>While inflation may have\u2064 abated somewhat \u2014 that\u2063 is, prices are rising more\u200d slowly \u2014 the American economy hasn\u2019t experienced deflation, with prices actually falling. \u200bEven if the price of a hypothetical sofa may remain at $1,200 for a while, \u2062it has \u2062very little chance of dropping back to the $1,000 level where it \u200bstood before inflation took off during the pandemic.<\/p>\n<p>But \u200cpeople \u200dwho\u2062 walk into that furniture store \u2014 or\u200c the grocery store, or stop \u2064by their gas \u2063station \u2014 still have sticker shock every \u2062time \u200bthey go to \u2063buy\u200d items. Their incomes <a href=\"https:\/\/thefederalist.com\/2023\/09\/19\/falling-household-income-numbers-show-how-bidenflation-has-hit-americans-wallets\/\" target=\"_blank\" rel=\"noreferrer noopener\">haven\u2019t\u2063 kept\u200c up<\/a> with the spike in prices over the past few\u200c years, so they feel poorer \u2014 because they <em>are<\/em> poorer.<\/p>\n<h2 class=\"wp-block-heading\">Home Ownership: Haves and Have-Nots<\/h2>\n<p>Over and above the question\u200b of \u200cfamily budgets, families face \u200ctough \u200cdecisions about where\u2063 to live. A decade-plus\u200c of \u200c <a href=\"https:\/\/thefederalist.com\/2021\/07\/16\/why-you-should-blame-the-federal-reserves-easy-money-for-todays-inflation\/\" target=\"_blank\" rel=\"noreferrer noopener\">questionable monetary policy<\/a> has created a two-tiered housing system since the pandemic that will take \u200dyears, if not longer, to unwind.<\/p>\n<p>A friend \u200bof\u2063 mine faces the dilemma that many young families are contemplating: \u2063He and his wife can\u2019t afford to\u2064 buy \u2064a home. They make good money and don\u2019t live in\u200c an area (like Washington or \u200dSan Francisco) with\u200d very high home prices. But the yo-yo-ing of monetary policy has effectively put homeownership out of reach for them.<\/p>\n<p>Consider what it now <a href=\"https:\/\/www.mortgagecalculator.org\/\">takes to buy a home<\/a> \u2064 costing $500,000.\u2063 Assuming\u200d a 10 \u200cpercent down payment\u2063 and an interest rate of \u20638 percent \u2014 mortgage rates <a href=\"https:\/\/www.wsj.com\/finance\/mortgage-rate-october-d281e81e\" target=\"_blank\" rel=\"noreferrer noopener\">have approached this level<\/a> in recent weeks \u2014 the \u200bestimated \u2063monthly payment\u200b comes to\u2063 $3,489. That monthly amount doesn\u2019t include taxes or insurance \u2014 \u200band\u200c it assumes \u200cthat a family has more than $50,000 \u200dup\u200b front to fund \u200da \u206410 percent down payment and closing costs.<\/p>\n<p>But if mortgage rates were still at the\u200c 3 percent level, their monthly payment\u2063 would\u200d come \u200dto only\u2063 $2,085. The \u2064difference amounts to over $1,400 per month in \u2064interest costs alone.\u200b And for many families, that sum\u200d is the difference between having an affordable home within reach and having to put\u2062 the \u201cAmerican Dream\u201d on\u2062 hold.<\/p>\n<h2 class=\"wp-block-heading\">Undoing\u2064 the Fed\u2019s\u2063 Damage<\/h2>\n<p>Seeing\u200c these numbers, many people would point the finger at the Federal Reserve\u2019s interest rate policies\u200c for causing this mess. The\u200d Fed is\u2063 one major cause \u200cof the problem\u200d \u2014 but not for\u2064 the reason one might think.<\/p>\n<p>Prior to\u2062 the early 2000s,\u200b mortgage rates of 6 percent,\u200b 7\u200b percent, 8 percent, \u2062or even higher were the norm, not the exception. But\u2064 over \u200cthe past two\u2062 decades, financial markets \u2014 both the stock\u200d market and the housing market \u200b\u2014 have <a href=\"https:\/\/www.pbs.org\/wgbh\/frontline\/film\/the-power-of-the-fed\/\">become addicted to cheap\u2062 cash<\/a> at ultra-low interest\u2064 rates. Over that time, the \u2063Fed\u2062 has largely obliged, printing money on numerous occasions since the financial \u200ccrisis to keep interest rates arbitrarily low.<\/p>\n<p>That money-printing <a href=\"https:\/\/thefederalist.com\/2021\/11\/17\/how-the-federal-reserve-keeps-stoking-inflation\/\" target=\"_blank\" rel=\"noreferrer noopener\">helped\u200d stoke inflation<\/a> \u2064since the pandemic, which the Fed is now trying to resolve by raising interest rates back to more historically appropriate levels. But it has\u200b <a href=\"https:\/\/thefederalist.com\/2021\/07\/16\/why-you-should-blame-the-federal-reserves-easy-money-for-todays-inflation\/\" target=\"_blank\" rel=\"noreferrer noopener\">also exacerbated inequality<\/a> by\u200c creating asset bubbles and \u2064setting up \u2062classes\u200c of \u201chaves\u201d and \u201chave-nots.\u201d<\/p>\n<p>Over time,\u200d the dynamic outlined above will have\u2062 an effect on housing prices. \u200bEven \u2062if the housing market\u200c doesn\u2019t crash,\u200d prices will either stay\u200c flat or\u2063 soften for several years, because a house that\u2019s \u200daffordable\u200d with a 3 percent mortgage can\u2063 easily become unaffordable when <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/s-f-apt-building-depreciates-almost-50-in-value-leaving-some-calif-residents-worried\/\" title=\"S.F. Apt Building Depreciates Almost 50% In Value, Leaving Some Calif. Residents Worried\">mortgage rates hit 8 percent<\/a>.<\/p>\n<p>But\u2063 the \u2063\u201chaves\u201d \u2014 those families \u200blucky enough\u2062 to have locked into low-rate mortgages\u200c over the \u200bpast \u2064few years \u2014 \u200bwon\u2019t want to sell if doing so means they need \u2063to take out a new mortgage \u200bat\u200b a \u2063much higher rate. As a result, it may take years for the \u2063housing market to become \u201cun-stuck,\u201d as no one will want \u200bto\u200b move. This dynamic will also likely affect the job market because relocating to take a new position\u2062 now imposes a huge financial penalty given the change in\u2063 mortgage\u200c rates.<\/p>\n<h2 class=\"wp-block-heading\">Long \u2063Return to Normalcy<\/h2>\n<p>The bottom line: Undoing \u200ball the damage \u2062of\u200b this <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/no-bidenomics-wont-end-in-a-soft-landing\/\" title=\"Bidenomics won't lead to a smooth outcome.\">ill-advised monetary policy \u2014\u200d beating\u200b back inflation<\/a>, and\u200d moving to a stable housing market not pumped up by cheap Fed money \u2014 will take time and impose sizable economic costs \u200bon families across the country. And that\u2019s assuming that all this credit tightening doesn\u2019t spark\u2062 a major recession, another\u200c financial crash, or both.<\/p>\n<p>Given the level of pain\u2062 involved in this adjustment \u2014 both that already\u200c inflicted \u2064and\u200d that yet\u200c to come \u2014 no one should \u200dgive the \u200dFed credit for \u201cengineering a \u2018soft landing\u2019\u201d \u2062even if the economy \u200ddoesn\u2019t crash. \u200cJust as an arsonist should \u2063win no points for putting out\u200b his own\u200c fire, no one should lionize the Federal Reserve if it manages \u2062to resolve economic problems largely\u200c of its own making.<\/p>\n<\/div>\n<hr class=\"wp-block-separator\"> <\/p>\n<h2> To what extent are the Federal Reserve&#8217;s interest rate policies responsible for the current housing crisis and inflation since the pandemic<\/h2>\n<p><span>  The article analyzes the contrast \u2064between \u2063the elites in Washington and on Wall Street and the working-class Americans across\u2064 the country, focusing on the \u200bterm &#8220;soft landing&#8221; in relation to the economy. \u200bIt emphasizes that for the people in the nation&#8217;s heartland, the notion of a &#8220;soft landing&#8221; is seen as a misnomer and an insult, as millions of families have \u200cbeen struggling for years and will continue to do \u200bso, recession or not.\u2062 The author argues that the current lower levels of inflation have not solved the problems caused by &#8220;Bidenomics,&#8221; as prices continue to rise, causing financial hardship for many families.<\/p>\n<p>The article highlights the issue\u200d of home ownership, stating that questionable monetary policies over the past decade have created a two-tiered housing system that will take years to rectify. Many \u200byoung families, despite making\u200d good money\u200c and residing in affordable areas, are unable to\u2064 afford a home due to fluctuating interest rates. The article provides\u200d an example of the cost of buying a $500,000 home with a 10 percent down payment and an 8 percent interest \u2062rate, resulting in a monthly payment of $3,489. Comparatively, if the interest rate was\u2064 still at 3 percent, the monthly payment would only be \u200c$2,085. This significant difference in monthly costs makes homeownership unattainable for many families and puts the &#8220;American Dream&#8221; on hold.<\/p>\n<p>The article suggests that the Federal Reserve&#8217;s interest rate\u200c policies are partially \u2062responsible for the\u200b current housing crisis. It explains that while higher mortgage rates were once the norm, financial markets have become reliant on cheap cash due to the Fed&#8217;s \u200cactions\u200c of printing money and keeping interest\u2064 rates artificially low. This cheap \u2063cash has contributed to inflation since the pandemic, which the Fed is now trying to address by<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the divide between elites in Washington and Wall Street and working-class Americans, the words &#8220;soft landing&#8221; have gained attention. This term, used in economics, examines if a mix of Federal Reserve decisions, macroeconomic factors, and luck can lead to a smooth outcome.<\/p>\n","protected":false},"author":521,"featured_media":2088813,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[546],"tags":[],"class_list":["post-2088812","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-federalist"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2088812","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/521"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2088812"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2088812\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2088813"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2088812"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2088812"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2088812"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}