Crom's Crommentary: Biden Is Governing Like It's the 1970s

Live from Music Row, Friday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – official guest host Aaron Gulbransen welcomed the original all-star panelist Crom Carmichael to the studio for another edition of Crom’s Crommentary.

CROM CARMICHAEL:

But the Crommentary is part of why I’m unhappy, all right? And that is Kyrsten Sinema looks like she’s going to sign on to this bill that the Biden administration and the Democrats have cooked up that is supposed to say ay it reduces the deficit, which is just farcical what they’ve done.

And it’s terrible how the media is reporting. But let me just give you a few little tidbits. When Biden ran, he promised to not raise taxes on anybody making over $400,000. Okay? That’s what he did. He said that.

Now, let me ask you, Aaron, let’s say that you’re paying $5,000 a year in taxes, and the next year your real income goes down, but you’re paying $6,500 in taxes. You’re paying $1,500 more than you paid the year before, but your real income is down.

Did your taxes go up? And Manchin says that he will not raise taxes on it by making under $400,000. Well, let me just say this. When inflation is going along at 10 percent, if your wages go up at 10 percent, guess what?

You pay 22 percent in taxes out of that 10 percent, and you pay Social Security and Medicare taxes. So really, you’re paying close to 35 percent of that $10,000 pay raise in taxes. And yet the Democrats and the media claim that extra money, that $3,500 extra, that you’re having to pay more than you did the year before in a tax increase.

It’s kind of like this isn’t a recession. So Manchin and the Democrats are raising everybody’s taxes, and they’re doing it by inflation, which is exactly the way the Democrats did it in the 1970s. Now, in the 1970s and this is part of the problem.

When you get 50 years from some previous event, you have to be pretty old like me to remember it. Most everybody else and neither of you guys has any memory of 1979. You might have been born, but that would be about it.

What happened is the inflation of the 70s started in 1966 and it built up over a very long period of time. And then when it finally hit, the amount of force that it took to stop it was immense. But that force took two forms.

One was dramatic increases by the Federal Reserve in tax rates. But the other thing was the public policy that Ronald Reagan put forth, and it was passed. And that was cuts in tax rates, reductions in regulations, and reductions in spending. Those three things.

Now, what is Biden doing? He is increasing spending, he is increasing taxes, and he is increasing regulations. And somehow he’s trying to argue that his policies will bring about the same result on inflation when the opposite policies actually did succeed in thwarting inflation and creating growth.

Logic should tell everybody that raising taxes on the private sector, and increasing regulations on the private sector is costly to the private sector. Let me be clear.

If there were no private sector, there would be no government, because the private sector is what creates the goods and services where people work and pay taxes from the production of the goods and services. The government spends that money.

If it spends it wisely, it’s limited. If it spends it unwisely, it’s huge. And we’re now seeing it become larger and larger. But here’s what’s interesting. Did you know that Manchin is getting $1 billion in this bill that will go to the Appalachian Regional Commission?

Did you know that? Is that news to you? Do you know who runs the Appalachian Regional Commission? Joe Manchin’s wife. So Joe Manchin’s wife is getting a billion dollars that she can now parcel out. Now, this is well known to everybody in Washington, but what do Republicans do? They sit there passing the CHIPS bill.

They go along with the Democrats on passing the CHIPS bill, which is not what it says it is. The CHIP’s bill was nothing but a pork barrel deal to give Democrats the power to force chip manufacturers to become unionized.

When you look at the bill, if you want businesses to build chip factories in the United States, there’s a simple way to do it. You just say anyone who builds a chip factory and if you want to define the chips, that’s high end chips, expensive chips, and the ones that have a lot of technology.

And if you want to do that, then you define what the chips are. And then you say, any company that builds chips to these specifications can depreciate the cost of building the factory in 36 months instead of 20 years. That’s how you would do it. And then you do it.

Now, you don’t have some anvil that you’re holding over the CEO’s head, but what Biden did was he got the Democrats with some Republicans to pass a bill that allows Biden to say to all these chip manufacturers in the US.

Well, you don’t get any money to build a chip factory unless you unionize your workforce. And that doesn’t help build quality chips. In fact, quite the opposite. Literally, every single decision that Biden makes and I’ve said this since I’ve been on Michael’s show it either helps Biden personally, either helps his family, or it helps the Democrat Party to the expense of everybody who’s not an activist in the Democrat Party.

And that’s why we have such a terrible recession. And I will tell you, after Manchin capitulated or actually got his billion-dollar payoff, depending on how you want to look at it and then the stock market jumped up tremendously.

Now I’m sitting there looking at that, and I’m saying, okay, what drives the stock market? There are two things that drive the stock market higher. One is immense amounts of new liquidity to come into the system that has to go somewhere, and they go to assets. That’s where liquidity goes or real economic growth.

Real economic growth. And low inflation will drive the stock market higher. But we don’t have real economic growth. In fact, we have the opposite. We have shrinking growth. But what we do have is now another giant boost of liquidity that’s coming into the system.

So anybody who thinks that inflation 12 months from now is going to be better than it is today is probably going to make investments or decisions that aren’t wise. Because everything that Biden is doing is a replay of the 70s accept Biden’s doing it on steroids. So I’m not happy today, Aaron.

Listen to the Crommentary: