This is actually stunning news. It tells us just how bad the geniuses in Washington, D.C. — Democrats and Republicans alike — have messed up the U.S. economy for the American people.
We are referring to Chuck Whittall, the CEO of Unicorp National Developments Corp., last week reporting that he has asked the buyers of his St. Regis condos on Longboat Key to pay 13% more than what they already signed contracts to pay for their yet-unbuilt, multimillion-dollar condos.
Whittall sent letters to his buyers that the costs of his St. Regis resort and condo project on Longboat Key have exceeded his original budget by $110 million — even before the first speck of dirt has turned.
Prices for everything are going up, as we all know. In Whittall’s case, he cited increases in steel, concrete, drywall, air conditioners and PVC pipes. There are shortages for all of these materials either because of the lack of people to make them or the lack of people to transport from the manufacturer to the end user.
But here’s the point: In years past, no business, no CEO — except health insurers — would dare try to pass along a 13% increase in prices to customers.
What? 13%! Are you kidding?! Inflation is only 2.5%!
That’s why Whittall’s 13% price hike is so stunning and revealing. It tells you how bad reality is. And this is happening all over the country, the world.
And yet President Joe Biden, House Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer and their Democratic congressional colleagues apparently could not care less about all Americans. Smitten with power, they are determined to expand the federal government’s cost and hold on everyone’s lives.
To what end?
Tell us, Joe; tell us, Nancy: What is your vision for the U.S.? What is your vision for the 330 million American citizens? How will your agenda make all Americans better off and more free? Tell us how your agenda will make America stronger and raise everyone’s standard of living?
Tell us because this is an undisputed truth: Governments cannot and never create wealth.
The inflation tax
Sure, the mainstream financial press and Federal Reserve Chair Jerome Powell will call the widespread shortages and price increases “transitory — temporary and short-lived.”
Truth is, no one really knows how temporary they will be. But you can take this to the bank: If the congressional Democrats give Biden and Pelosi what they want — $4.5 trillion of new spending and more money that they do not have — America’s middle class and poor are going to suffer a long time. That’s who inflation hurts the most. The value of the dollars those people have will continue to decline and buy less and less.
And any new spending and taxation will just pile on top of the mistakes that triggered the shortages and rising prices to begin with. Those mistakes were shutting down the nation’s economy and handing out $1.2 billion in relief money to individuals and businesses.
Sure, the argument will go, something had to be done to stop the spread of COVID-19, and something had to be done to help all the Americans whom the politicians put out of work.
But it’s pretty apparent today that the politicians and health bureaucrats mandating the shutdowns and the congressional members who voted to print that $1.2 billion gave little, if any, thought to the effects — how their actions would play out over the next year, two years, three years, five years.
All they wanted was to be seen as heroes helping the American people now — from the damage and destruction they caused.
That is always the case. Politicians care about the now. They are oblivious — or ruthlessly callous — to these two undisputed truths: 1) Only government causes inflation; and 2) inflation is always an effect of what government does.
Inflation is not the rising prices. It’s when Congress prints more money to pay for government programs than what existing taxes cover. Inflation is when you put more money in people’s hands to buy the same amount or fewer goods in existence. Consumers bid up the prices on the short supply of goods and services.
Washington compounded the calamity during the pandemic. It increased the supply of money at the same time it contracted the supply of goods and services.
And that is why Whittall is asking his customers to pay an additional 13%. It is exactly why there is a shortage of everything, including employees.
Destructive for all
All of that brings us back to Biden, Pelosi and their $3.5 trillion social welfare and climate change spending and $1 trillion infrastructure bill.
(Let’s not forget a few of their other initiatives that we don’t have the space to address: giving up energy independence, opening the Southern border to an invasion of undocumented immigrants, forgiveness of college loans and federal takeover of elections.)
Why? What is the objective for all of this?
Neither Biden nor Pelosi — nor any Democrats, for that matter — has made the case or explained their vision for the future.
Biden gave us his campaign blather of “Build Back Better.” He promised lower costs for child care, college, prescription drugs and housing; to cut taxes for families with children and “workers without children.” And he promised that his government expansion will create jobs.
But how? The same way every Democrat politician would do it: by government force, coercion and fiat. By the people in power confiscating and looting from some and transferring and bestowing unearned benefits on those chosen by the people in power.
Biden, Pelosi and their followers say, of course, that all of these unearned benefits they want to bestow will be paid for “by making the tax code fairer and making the wealthiest and large corporations pay their fair share.”
What is a fair share? Who is the arbiter of “fair”?
Plain and simple for all of you Biden-Pelosi believers: There is no other description for this agenda than authoritarian socialism. It is communism. It is destructive — for everyone.
And it never works.
Tax the rich? Tax corporations? What the progressives never grasp is the wealthy are the job creators. Their capital — not the government-looted money — provides fuel for the economy. They invest in entrepreneurs who create jobs and create positive contributions to society.
When Biden & Co. say they’re going to make corporations pay their fair share, they are delusional. Corporations do not pay taxes. They never pay taxes.
Corporations pass those taxes onto others. They raise their prices, which hurts consumers. They don’t hire more people, which hurts those who need jobs. Or they hold down their wages, which hurts their employees.
Just as inflation hurts the middle class and poor, so do taxes — no matter who is taxed. As Steve Forbes has often repeated: When you increase a cost or price on anything, you get less of it. Raise a tax, you’ll get less tax revenue than you otherwise would.
Build back better?
Tell us, Joe Biden and Nancy Pelosi, how your “Build Back Better” will make us better. We can’t see it.
In recent months, we frequently have quoted the late Leonard Read, author of “Anything That’s Peaceful.” We do it again: Government coercion “has only the power to restrain, repress, suppress, penalize, destroy.”
That is not the vision Americans embrace.