Faced with high inflation and a shaky stock market, half of Americans believe they are worse off now than they were a year ago. And starting Wednesday, President Joe Biden is planning to tell people that this is a good reason to vote for him, traveling to Chicago to tout "Bidenomics" in what his aides are calling a "cornerstone" address.
Senior White House advisers circulated a memo on Monday previewing what they characterized as Biden's economic accomplishments: enormous domestic spending, higher taxes, and favorable treatment for unions. "Bidenomics," the memo says, "is both a winning economic strategy that is delivering results, and an approach that is strongly supported by the vast majority of the American people."
But not everyone shares the White House’s optimism. Some economists say recent economic gains have nothing to do with Biden’s policies, and have resulted from businesses returning to normal operations after a year of shutdowns. Meanwhile, these economists note, Americans still struggle with inflation levels not seen since the 1980s—a problem exacerbated by the same programs Biden heralds as a success.
"I think the legacy of Biden thus far is rapid inflation, stagnant real wages, and soaring debt," said Brian Riedl, a senior fellow at the Manhattan Institute. "I just think we would have been better off without inflation in the first place."
New spending under Biden totals roughly $6.5 trillion, the most since World War II. More than $4 trillion of that came during Biden’s first two years in office. It includes the nearly $2 trillion American Rescue Plan, the nearly $1 trillion infrastructure bill, and the nearly $1 trillion Inflation Reduction Act.
The White House calls these bills part of the president’s "Investing in America agenda," and argues they are an integral part of turning "the page on the failed trickle-down policies of the past." Economic data, they say, prove "that Bidenomics is both a winning economic strategy that is delivering results, and an approach that is strongly supported by the vast majority of the American people."
The inflation rate sits at just over 4 percent, down from 8 percent in 2022, but double what the Federal Reserve and economists generally agree is healthy. Persistent inflation means average Americans have seen their real wages fall every month since Biden took office, and there is little evidence things will change any time soon.
"For the average American family, they have seen their weekly paychecks go up on average 200 bucks, so that sounds really great. And it is by historic standards," said EJ Antoni, an economist and research fellow at the Heritage Foundation. "The problem is that prices have gone up so much faster than wages. It’s one thing to say something that sounds good but it’s another thing to actually improve people’s lives, and we just haven’t seen that."
The economic reality is reflected in Biden’s historically low approval rating. A recent Harvard survey found that 74 percent of Americans say their financial situation is not improving, and a May Fox News poll found 83 percent of respondents saying the president’s policies have not benefited them.
Where the Biden administration sees bright spots, such as the unemployment rate, others see a mirage. Although it is true that the unemployment rate sits at historic lows, Riedl said, such an outcome is unremarkable given the nation’s "overheated economy."
"Of course you’ll see short-term low unemployment and healthy nominal GDP growth under these conditions," said Riedl. "I think the Federal Reserve has had to perform heroically in order to keep unemployment down and managing the recovery from your policies shouldn’t be the same as taking credit for good policies."
There is little reason to believe Biden’s more recent legislative economic accomplishments are responsible for the strong labor market. Less than a year has passed since the president signed the Inflation Reduction Act, and many of the tax and spending initiatives the White House touts in its policy memo are spaced out for a decade.
Although the White House claims the Inflation Reduction Act will be responsible for "hundreds of thousands of good-paying clean energy jobs," the center-right Tax Foundation concluded that the law would ultimately cost the country nearly 30,000 jobs by the end of 2032. The unemployment rate is still higher than it was during the Trump administration, and the labor participation rate has dropped below pre-pandemic levels.
The White House’s policy memo says "our work isn’t done," but expresses confidence that the country’s worst economic days are behind it.
Antoni suggested this is a risky bet, and that although growth remains positive, leading economic indicators suggest trouble may be ahead.
"Effectively their message is ‘don’t believe your lying eyes,’" said Antoni. "You just can’t spend, borrow, and print trillions upon trillions of dollars and not expect negative consequences. I just don’t know when we forgot that."