Yet Another Biden Regulation Will Increase Costs And Promote More Inflation

Authored by Mike Shedlock via MishTalk.com,

Want fewer goods and services and higher taxes to pay for them? If so, Biden is your man…

Davis-Bacon Act Changes

The Biden administration is redefining the Davis Bacon act, so that your tax dollars buy fewer and fewer services.

The Davis–Bacon Act of 1931 is a United States federal law that establishes the requirement for paying the local prevailing wages on public works projects.

A change in how prevailing wages are defined will drive up the costs of anything government touches. The cost of wind turbines, EV charging stations, road repairs, and everything federal construction project will rise as a result.

Free Raises for Everybody. Not.

The Wall Street Journal reports Free Raises for Everybody. Not.

“We are updating this law and giving workers across the nation a raise,” Vice President Kamala Harris proclaimed last week. She cited a heavy-equipment operator on federally funded construction projects in Allegheny County in Pennsylvania who would see his pay increase to $28 an hour from $17.

The new rule lets DOL adopt prevailing wages determined by state and local governments rather than contractor surveys. That means Big Labor’s friends in Albany and Sacramento will be able to dictate wages on public works. Prevailing wages in metro areas will also cover nearby rural counties where wages are typically lower.

The new rule extends the mandate to broadband, solar panels, wind turbines and electric-vehicle charging stations that are financed in part by Washington. Semiconductor firms receiving federal grants for new factories will have to pay construction workers the new prevailing wage.

The Inflation Reduction Act includes “bonus” tax credits that are five times larger for renewable projects that pay the prevailing wage. Because most aren’t profitable without the bonus credits, nearly all green-energy developers could have to pay the prevailing wage. That means the law may cost even more than the $1.2 trillion that Goldman Sachs estimated.

One obvious result will be higher costs on public works and probably fewer of them since federal dollars won’t go as far. States and localities may have to borrow more and raise taxes to fund projects. Fewer semiconductor fabs and renewable projects will probably be built since private capital won’t go as far.

Inflation Promotion Everywhere

• The EV push is inflationary

• Clean energy tax credits are inflationary

• Cap and Trade is inflationary

• Deglobalization is inflationary

• Tariffs and sanctions are inflationary

• Push for more unions is inflationary

• Student loan forgiveness is inflationary

CPI Rises 0.2 Percent, Shelter Again Accounts for Most of the Increase

The price of rent has risen 0.4 percent for 18 straight months. For discussion, please see CPI Rises 0.2 Percent, Shelter Again Accounts for Most of the Increase

Eviction moratoriums and the third round of fiscal stimulus contributed at least a bit towards rising rents. The Fed played a role as well. But Biden is responsible for everything in the bullet list above.

He also has his fingers in the militant push by the United Auto Workers (UAW) for preposterous demands.

UAW Demands

• 32-hour workweek

• 46 percent pay raise over 4 years

• Right to strike over plant closures

• Increased retiree benefits

• Defined pension plan for all workers

• Cost of living adjustments

UAW Declares War on Corporations, Seeks 46 Percent Wage Hike, September Strike Looms

For discussion of militant unions, please see UAW Declares War on Corporations, Seeks 46 Percent Wage Hike, September Strike Looms

Even if the price of rent starts dropping, temporarily suppressing the CPI, the inflationary pressures by this president are piling up, one after another after another with no end in sight.

Davis-Bacon is a real porker. We will have an inflation inferno if Biden’s polices continue for another four years.

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