For an alternate viewpoint, see “Counterpoint: The Economic Consequences of President Biden.”
I would not ordinarily talk this way. I just want to make the point that we can say with absolute certainty that if Donald Trump were president and we had the exact economy we now have, we know he would proclaim the GREATEST ECONOMY EVER!
We could also be certain that every Republican member of Congress would agree with him. And they would have a good case.
And, if we had gotten here based on President Trump’s policies, they would be justified in taking credit. This is especially true when we consider that we had to overcome a once-in-a-century pandemic and the disruptions created by the largest war in Europe since World War II.
To put the basic facts on the table, unemployment has been at, or near, a half-century low. The unemployment rate for Black workers hit the lowest level ever. Inflation did take a bite out of wages in 2021 and the first half of 2022, but in recent months wages have been substantially outpacing inflation.
This is especially true for workers at the bottom of the wage ladder. Wages for production and non-supervisory workers, a category that excludes managers and highly paid professionals, are 1.7 percent above their pre-pandemic level after adjusting for the rise in prices. For workers in the low-paid hotel and restaurant sector, the increase is 6.3 percent.
Higher pay is just part of the story; the Conference Board reports that workers are enjoying higher job satisfaction in the nearly 40 years that they have fielded their survey. This should not be surprising given the massive amount of job shifting over the last three years.
The strong labor market gave workers unprecedented opportunities to leave jobs they didn’t like. In fact, workers were so confident of their labor market prospects that record numbers were prepared to leave jobs before they even had a new job lined up.
And we have seen an enormous increase in the number of people who can work from home, with estimates of more than 45 million. This saves workers thousands of dollars a year in commuting costs and hundreds of hours of commuting.
The improved economic situation shows up in other areas. We have seen a substantial rise in homeownership, especially among disadvantaged groups. There were large increases in homeownership rates among the young, Blacks and Hispanics. The share of homeowners among households earning less than the median income hit a record high.
Since the pandemic, the United States has had the highest growth rate of any wealthy country. Its inflation rate is among the lowest, below that of Germany, the United Kingdom and Japan.
There is a lot here to like, but beyond just the good news, President Biden has a powerful argument that he deserves credit. We can start with the American Recovery Package he pushed through Congress just after taking office. He managed to get it through without a single Republican vote. They widely condemned the package as inflationary, as did many prominent economists, including prominent Democratic economists.
This package put money in people’s pockets, protected them from the worst effects of the pandemic shutdowns, and helped to supercharge the economy. While it took us close to a decade to get back to the unemployment rates we saw before the Great Recession, we managed to return to pre-pandemic levels of unemployment in a year and a half after Biden took office.
We did see a bout of inflation, but the hit was not noticeably worse than in countries that did not have big recovery packages. Furthermore, many of these items have since come down, as items like eggs and gas are now selling for close to their pre-pandemic prices. A short bout of inflation seems a small price to pay for a strong labor market.
Perhaps even more important were the bills changing the long-term direction of the U.S. economy. Biden got a bipartisan infrastructure bill passed in his first year. This was followed by the CHIPS Act to promote the domestic production of cutting-edge silicon chips. And he got the Inflation Reduction Act passed, which set off a massive surge in investment in clean energy and electric cars. We will see the benefits of this legislation for decades into the future.
In short, yes, we have an outstanding economy. And yes, Biden fought to pass the legislation that got us here. That means he gets the credit.
