Bidenomics is nothing to brag about, but the president keeps trying anyway | Opinion
President Biden has been sounding like Don Quixote on the campaign trail lately. He continues tilting at the windmill of “trickle-down” economics and telling half-truths at best about “Bidenomics.”
The most truthful thing Biden said was that he “came to office determined to change the economic direction of this country.” And he has — for the worse.
When the president took office, the economy was growing at a $1.5 trillion annualized rate, and inflation was 1.4%. Consumer sentiment was rising, and real wages had grown 8.6% under President Trump.
But Biden slammed the brakes on the economy and has even managed to throw it in reverse with an agenda that increased regulation, taxation, spending, borrowing and printing money.
Economic activity, as measured by gross domestic product, contracted for two consecutive quarters last year. Another measure of economic activity — gross domestic income — has been negative for three of the last four quarters. The economy is stalling out, unlike inflation.
Biden is quick to take credit for inflation coming down, but not for running it up to 40-year highs in the first place. A year and a half into his term, inflation had gotten so bad that prices were rising in a single month about as fast as they rose in the entire year before Biden took office.
Core inflation, which excludes the volatile food and energy categories, has been above 5% for a year and a half. At this point, inflation is a cornerstone of Bidenomics.
And rising prices have demolished workers’ purchasing power. While the average family earns more dollars today than when Biden took office, those larger paychecks buy less. Adjusted for inflation, the average American family has seen their annual incomes fall about $5,600 under Biden. For many families, that is an entire month’s pay.
Yet the president brags about the state of the American worker under his watch, as Biden cites ad nauseam the monthly jobs numbers. These figures have been artificially goosed by several factors, like double counting individuals who have multiple jobs, but also because the economy was artificially shutdown in 2020.
About 70% of the job growth under Biden was just the economy returning to pre-pandemic levels as government lockdowns were lifted, but Bidenomics has slowed the recovery markedly. Average monthly job growth fell by two-thirds after Biden took office, and the labor market still hasn’t returned to its pre-pandemic trend.
Both the labor force participation rate and the employment-to-population ratio remain depressed, and labor productivity is even worse. When Biden took office, labor productivity was growing by 2.7 times the post-war average, one of the best increases in 75 years. But Bidenomics took no prisoners, and labor productivity quickly tanked, with negative annual growth for five quarters in a row – a new record.
In the second quarter of 2022, while the overall economy was contracting, labor productivity had its largest annual fall on record, dropping 2.5%. More than one-fifth of all contractions in labor productivity during the post-war period have occurred on Biden’s watch.
Instead of addressing these real concerns for American families, Biden ignored them to attack the strawman of “trickle-down” economics, a loose collection of ideas that has never been formally defined as a coherent theory, let alone defended or implemented by any president. The president is inventing boogeymen to fight in much the same way that Don Quixote fabricated villains in his mind.
The nation would be better served by an agenda that prioritized economic growth through shrinking the federal budget, not the family budget.
E.J. Antoni is a public finance economist at The Heritage Foundation and a senior fellow at Committee to Unleash Prosperity.
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