John Catsimatidis, the CEO of the New York City grocery store chain Gristedes, warned this week that prices won’t drop at the grocery store until the Biden administration stops “doing dumb things.”
He made the remarks while speaking on Fox Business Network’s “Mornings with Maria.”
“When the food executives feel confident that Washington is not doing dumb things — that’s when you’re going to get a break. When they feel that their earnings are going to survive,” he said.
Listen:
“I mean, everybody’s panicked. The bank executives are panicked, and food executives are panicked. Everybody’s panicked and say[ing] what’s the next shoe that’s going to fall? Let’s take a pause, and let’s see how things sort themselves out,” he added.
Host Maria Bartiromo concurred.
“Right. I spoke with someone at the Milton conference, and he said to me right now everybody’s in a freeze. He was talking about corporate executives. And he said people do not want to do big overlays in terms of investment. They’re freezing their spending right now,” she said, prompting Catsimatidis to jump right back into the conversation.
“They’re scared. The corporate executives are scared. The banking executives are scared. They got everybody scared. And if you keep raising interesting rates, you’re going to have another 1980, 1981 all over again. And that’s when we really have a problem. And the foreign governments are out-sourcing Washington right now.”
The economy entered a recession in the third quarter of 1981 on account of ridiculously high interest rates. Why were interest rates that high? On account of circumstances that closely mirror what’s happening now decades later.
“In the late 1970s, in America, prices were rising fast. In other words, inflation was running rampant, usually thought to be the result of the oil crisis of that era, government overspending, and the self-fulfilling prophecy of higher prices leading to higher wages leading to higher prices,” PBS News notes.
Then-Fed chair Paul Volcker resolved to stop it by raising interest rates, which in turn eventually led to the aforementioned recession.
That’s the bad news. The good news is that Volcker’s strategy did eventually work: “Ultimately, this persistence paid off. By October 1982, inflation had fallen to 5 percent and long-run interest rates began to decline,” according to Federal Reserve History.
“The Fed allowed the federal funds rate to fall back to 9 percent, and unemployment declined quickly from the peak of nearly 11 percent at the end of 1982 to 8 percent one year later (Federal Reserve Bank of St. Louis; Goodfriend and King 2005).”
The hope presumably is that the same thing will happen again. But this isn’t the only “dumb” policy the Biden administration is pursuing. Not by a long shot.
Writing for The Wall Street Journal a year ago, the Hoover Institute’s David Henderson and former Council of Economic Advisers chair Casey Mulligan warned that “increased regulation and increased taxation of capital — two Biden administration policy priorities” will “make recession more likely.”
“Most discussion about the possibility of recession focuses on the Federal Reserve’s monetary policies. But there are also factors on the supply side of the economy that may tip the U.S. economy into a recession. Among them are the tax and regulatory policies of the Biden administration,” the duo wrote.
In 2020 Fitzgerald, Hassett, Kallen and I predicted this consequence of Biden agenda; the agenda depresses productivity more than employment. Moreover, the labor wedges in his agenda are not currently in place. Just the productivity and capital wedges.https://t.co/OZvOUyA1HD
— caseybmulligan (@caseybmulligan) July 9, 2022
What specific policies in general? According to the Club For Growth, there are a LOT of them.
“President Biden pumped trillions of dollars in federal spending into the economy during supply chain interruptions, while demand was volatile due to the COVID-19 pandemic, causing prices to rise. Biden inherited U.S. energy independence and the U.S. as a net energy exporter on day one of his administration. However, Biden’s Executive Orders and regulatory actions turned us into a nation reliant on foreign energy — all because he sought to placate radical climate change environmentalists,” the club notes.
“Biden incentivized millions of Americans to drop out of the labor force, adding pressure on the supply chain. His policies created wage pressure on inflation. Progressive economic policies a made goods and services more difficult to come by, thus more expensive. Biden has even proposed the largest tax increases in American history in an attempt to fund his spending spree. This caused U.S. job creators and entrepreneurs in many areas of the economy that lead new business formation and risk-taking to stop investing in order to reevaluate the future of the U.S. economy.”
He’s also responsible for the $300 weekly unemployment bonus (that’s since expired) and mask/vaccine mandates (that hurt hiring).
Writers and editors can be contacted at [email protected] with feedback, tips, or corrections.
V. Saxena is a staff writer with a decade of experience as a professional writer, and a lifetime of experience as an avid news junkie. He holds a degree in computer technology from Purdue University. Saxena also contributes to BizPac Review.
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