Inflation accelerates at lightning pace in new setback for Biden

“U.S. consumer prices raced ahead in November at the fastest pace in 39 years, dealing a potential setback to President Joe Biden’s spending plans and giving Republicans more ammunition against Democrats heading into the election year.

Costs for key goods and services soared 0.8 percent for the month and 6.8 percent for the year, the highest since 1982, the Labor Department reported Friday. Prices for everything from food to automobiles have been surging as blistering demand from cash-rich consumers in a growing economy overwhelms a supply chain plagued by a lack of available workers.”

“The cost increases, which are outpacing wage gains and turning Americans’ views on the economy sour, have sliced into Biden’s approval ratings and made the 2022 midterm elections even more challenging for Democrats. The hot reading on consumer prices, which followed a 6.2 percent jump in October, is also likely to fuel Republican criticism of Biden’s economic performance, which they have dubbed “Bidenflation.”

It could embolden conservative Democrats such as Sen. Joe Manchin of West Virginia to oppose the president’s $1.7 trillion Build Back Better package, which the party hopes will clear the Senate by Christmas. Biden will need every Democratic vote in the 50-50 Senate to pass the bill.”

““Fortunately, in the weeks since the data for [Friday’s] inflation report was collected, energy prices have dropped,” Biden said in a prepared statement. He added that the CPI report “does not reflect today’s reality, and it does not reflect the expected price decreases in the weeks and months ahead, such as in the auto market.”

At the White House press briefing on Thursday, National Economic Council Director Brian Deese echoed these points and said many top economic forecasters see inflation falling quickly next year and coming closer to the Fed’s target of slightly over 2 percent per year for by the end of 2022.”

History Shows That Biden Is Handling Putin the Right Way

“In all three of the previous crises, the U.S. and its allies concluded that the territory in question was not vital. In Georgia and Ukraine, the U.S. did not have the military capability to engage Russia directly and made clear to partners it would not enter the conflict. In Syria, Washington was unwilling to continue supporting the opposition to Bashar Assad in the face of Russian military action, focusing more on de-escalation including a military hotline to Russian forces. These moves assured Putin that the geopolitical outcome he feared was not forthcoming, discouraging him from upping the ante.”

“At the same time, the U.S. took military steps to limit Russian success, hedge against further aggression or signal determination. The riskiest move was President George W. Bush’s order to airlift a whole Georgian brigade from Iraq to Tbilisi in 2008, while sending U.S. naval assets to the Black Sea. In 2014, the U.S. and NATO initially provided Ukraine with non-lethal military aid, but gradually expanded that to include lethal defensive systems, training and small rotational deployments. In Syria after 2015, the U.S.-led anti-ISIS coalition indirectly put military pressure on Assad while avoiding confrontation with Russian troops.

In each case, the U.S. signaled that “no military solution” was not an absolute, underlining that although the U.S. did not seek direct conflict with Russia, a robust military response was on the table to defend vital interests, including treaty allies.”

“The U.S. and Europe have used sanctions to respond to Russian aggression by targeting top decision-makers, the Kremlin’s military-industrial complex, and the key sources and intermediaries for Putin’s personal wealth (in the Syria case, Damascus and Tehran were also sanctioned). Though sanctions could not undo actions Russia had already taken, they helped deter Moscow from pursuing more expansive aims.”

“In all three conflicts, the U.S. effectively mobilized allies. The Bush administration blessed French President Nicolas Sarkozy’s lead on the 2008 negotiations that prevented further fighting between Russia and Georgia, and similarly backed France and Germany on the Normandy format talks that brought Russia—not just Russian-backed proxies—to the table with Ukraine. Syria crisis management was a cooperative effort by the U.S., EU states, the Arab League, and eventually Turkey and Israel under pro forma U.N. leadership.”

“Finally, U.S. administrations have used face-to-face meetings and calls between top leaders to convey this message of de-escalation backed by firm resolve.”

“Though critics often decry engagement with the Russians as a reward for bad behavior, the crisis management playbook shows that it is essential. Earlier this year, during the last Russian buildup along the Ukrainian border, Biden defused the situation with direct high-level dialogue, particularly face-to-face meetings with Putin and Ukraine President Volodymyr Zelenskyy. With this week’s Biden-Putin call, and the launch of a follow-up dialogue on European security that will include U.S. allies, Washington is again choosing wisely to engage.”

Texas, Florida see uptick in Obamacare enrollment

“About 4.6 million people signed up for Obamacare through the fifth week of open enrollment, with roughly 923,000 people newly enrolled, according to the Centers for Medicare and Medicaid Services.

Enrollment is up 20 percent in Texas and 9 percent in Florida compared to this time last year, administration officials told reporters…crediting increased subsidies from the American Rescue Plan.”

“These two states also have some of the highest uninsured rates in the country. Texas leads the nation with 17.5 percent of its population uninsured, according to the Kaiser Family Foundation. Florida ranks fifth, with 12.3 percent of its population uninsured.”

“Overall, states that have not expanded Medicaid — which includes Florida and Texas — saw a 9 percent uptick in enrollment, officials said.”

Analysis: U.S. wants more oil, but OPEC+ can’t turn on the tap much harder

“U.S. pressure on OPEC+ to pump more oil and cool red-hot crude prices has shone a spotlight on a relatively new problem for the producer group: it doesn’t have much extra capacity to hike output faster, even if it wanted to.”

“OPEC+, which includes Russia, has resisted pressure for swifter hikes, sticking to its plan of gradually raising output by 400,000 barrels per day (bpd) each month since August, saying it worries a faster increase will lead to a glut in 2022.

Yet OPEC+ can’t even hit those goals. Production by OPEC+ was 700,000 bpd less than planned in both September and October, according to the International Energy Agency (IEA), raising the prospect of a tight market and high oil prices for longer.”

“plunging investment in production caused by the pandemic and environmental pressure on oil majors, particularly in poorer OPEC states, means just three OPEC members – Saudi Arabia, the United Arab Emirates and Iraq – have the extra capacity in place to hike supplies relatively quickly.”

“Saudi Arabia is now producing close to 10 million bpd but has never produced more than 11 million bpd for a sustained period of many months, even though it says it has more capacity available.”

The US’s refusal to accept reality in Ukraine could get a lot of people killed

“US Secretary of State Antony Blinken recently met with his Ukrainian counterpart Dmytro Kuleba in Washington and declared that the US commitment to Ukraine’s security and territorial integrity is “ironclad.”

The meeting between the two officials came as Moscow stationed 90,000 troops near the Ukrainian border, leading many to fear that a large-scale Russian invasion of Ukraine could be imminent. Ukraine has been mired in a war with Russia and Russian-backed separatists in the eastern Donbas region of the country since 2014.

Blinken’s comments are just the latest example of a top Biden administration official failing to accept the geopolitical reality of Ukraine.”

“Is Biden really prepared to send young American men and women to fight and die over Ukraine? This kind of rhetoric from the Biden administration does not serve US interests and counterproductively increases the risk of the United States being dragged into a war with Russia.

By continuing to provide quasi-security guarantees to Ukraine, Washington is playing a dangerous game of escalation with Moscow. Russia’s deployment of 90,000 troops near the Ukrainian border is likely Moscow calling Washington’s bluff.

The United States has provided $2.5 billion in military aid to Ukraine since hostilities broke out. Despite this significant investment, the war has continued because the underlying geopolitical causes of the conflict have not been addressed — namely Russia’s concern that Ukraine will be granted NATO membership.”

“Russia has proven that it is willing to bear significant monetary and human costs to prevent a western-aligned Ukraine. Years of tough economic sanctions and the estimated loss of several hundred Russian soldiers has done little to change Russia’s objectives in Ukraine.

Unlike Russia, the United States simply does not have a strong enough interest in Ukraine worth risking a potential nuclear war over.

Ending the conflict will require a comprehensive political settlement that takes Russia’s geopolitical anxiety into account. One may not agree with Moscow’s security concerns; however, it is necessary to address them in pursuit of a peaceful resolution. Such a settlement should see Ukraine’s territorial sovereignty restored and position Ukraine as a neutral buffer state, neither aligned with Russia nor the West.”

“Working toward a realistic resolution in the form of a neutral and non-aligned Ukraine could provide an opportunity for the world’s two largest nuclear powers to form a stable and predictable relationship.”

Wait, is Russia going to invade Ukraine?

“Ukraine is central to this vision. Culturally and economically, Putin sees Ukraine as tied to Russia. Putin used his hot vax summer to publish an article about how Ukrainians and Russians “were one people — a single whole,” according to an English translation posted on the Kremlin’s website. For him, the ex-Soviet Republic is not really a sovereign state but belongs to Russia, or at least would if not for the meddling from outside forces (read: the West) that have created a “wall” between the two.

“Step by step, Ukraine was dragged into a dangerous geopolitical game aimed at turning Ukraine into a barrier between Europe and Russia, a springboard against Russia,” Putin wrote.

This issue of Ukraine being a “springboard” for military action against Russia is also unacceptable to Putin. He wants to recreate a “sphere of influence” for Moscow, and Ukraine is the buffer between it and NATO. As Ukraine moves closer to the West, that buffer crumbles.

“The reason there’s a war in Ukraine has a lot to do with Russia’s perception of the post-Cold War order in Europe, this notion that Western states have been moving closer and closer to Russia’s borders, and indeed, gobbling up its natural sphere of influence,” Oliker said. “Ukraine’s the front line on that.””

“NATO and member states within NATO like the US and Great Britain are cooperating with Ukraine on security, they’re helping in training and reforms, and providing (or selling) military equipment. But a close partnership is not the same as membership, as it doesn’t come with the obligation of mutual defense, and the NATO countries don’t exactly want to sign themselves up for a potential war with Russia.”

‘Expect additional long-term damage’: U.S. labor shortage exacerbated by immigration slowdown

“Immigration into America has slowed down tremendously, which may hurt the labor market and economic growth as the country tries to bounce back from the coronavirus pandemic, according to a new note from J.P. Morgan.

“Population slowdown threatens trend growth,” the Nov. 12 note stated, highlighting the fact that due to more aging boomers retiring from the workforce and 3 million fewer immigrants in the country, trend labor force growth is going to be limited at only 0.1% per year and risks hurting overall GDP growth.”

““Immigration is crucial to growing the labor force and for economic growth, particularly in the medium and long term,” Stuart Anderson, executive director of the National Foundation for American Policy, told Yahoo Finance.

Anderson added that the Trump administration’s policies greatly limited legal migration and the pandemic worsened the numbers overall, contributing to a shortage of available workers. “If similar policies were to resume in 2025, expect additional long-term damage to U.S. economic growth and the American labor market,” Anderson warned.

J.P. Morgan researchers noted that the Census Bureau estimated that the working age population (ages 16 to 64) peaked in 2019, and has been “falling for almost two years,””