President Joe Biden was in Chicago last week to take credit for some of the economic successes of his administration.
“Bidenomics is working,” he said. “When I took office, the pandemic was raging and our economy was reeling, supply chains were broken, millions of people unemployed, hundreds of thousands of small businesses on the verge of closing after so many had already closed — literally, hundreds of thousands on the verge of closing.”
“Today, the U.S. has had the highest economic growth rate, leading the world economies since the pandemic. The highest in the world,” Biden said.
While he may be using the term “Bidenomics,” he admitted that he didn’t come up with it.
“I didn’t realize the economists in The Wall Street Journal did,” he said, adding that he was happy to go along with it.
As Biden continues to struggle with low approval ratings, his administration wants to change the conversation by touting the economic achievements, all in an effort to win over middle and working-class voters who could make a difference in 2024. But with many of these same voters frustrated over protracted inflation and high interest rates, is it wise for Biden to pin his electoral hopes on the economy?
Inflation and interest rate hikes have put pressure on the middle class, as the cost of groceries, homes, cars and even electricity have become more expensive. The cost of carrying credit card and other debt has also gone up.
According to Bloomberg, the middle class has lost more than $2 trillion in wealth since the Federal Reserve began hiking interest rates in March 2022.
But the Biden administration is willing to bet on its economic policies, as seen in a recent White House memo, “Bidenomics Is Turning the Page on Failed Trickle-Down Policies and Transforming Our Economy — and It Is Strongly Supported by the Vast Majority of Americans.”
This memo touted job growth, low unemployment and the federal government’s massive infrastructure plan.
What exactly is “Bidenomics”? Or — what does the administration hope people will think of when they hear the slogan? As Vice President Kamala Harris tweeted, it’s “about growing the economy from the middle out and the bottom up, not the top down.”
Still, many voters aren’t buying into Biden’s economic agenda. The latest Associated Press/NORC Center for Public Affairs Research poll found that only 1 in 3 American adults approve of Biden’s economic leadership. Within his own party, roughly 60% of Democratic voters approve of his handling of the economy, while only 1 in 10 Republicans approve.
These findings are similar to what emerged in a Deseret News/HarrisX survey from last month, where 61% of those who identify as middle class and 64% who identify as working class claim that the economy is on the wrong track.
When asked what the most important issues are facing the U.S., the top response was price increases and inflation, chosen by 26% of respondents, followed by 21% who said it is the economy and jobs, which tied with guns and school safety, as D. Hunter Schwarz reported.
The Biden administration says that compared to other leading economies, inflation in the U.S. is low. But, compared to recent levels, inflation is still high.
Fed Chairman Jerome Powell said in testimony last month to the House Financial Services Committee that interest rates will go up again this year as the Fed continues to battle inflation.
“Inflation has moderated somewhat since the middle of last year,” he said in his testimony. “Nonetheless, inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go.”
The personal consumption index, which is an indicator of inflation, was up by 3.8% in May, 2 percentage points above the Fed’s goal, according to Politico.
Apart from the contrasting messaging on inflation between the Fed and the Biden administration, Biden has also touted the number of jobs created during his time in office, although he does not mention that those jobs were added after cratering during the pandemic.
Since Biden took office, 13 million jobs have been added to the economy, including 800,000 manufacturing jobs, according to the memo. The Biden administration credits some of this job growth to legislation passed in the last two years.
For starters, there is the $300 billion Chips and Science Act, which included money to set up manufacturing plants across the country to reduce dependency on foreign technology. In the Inflation Reduction Act, $369 billion was included for energy security and climate change-related investments. More than a trillion dollars will be spent on the 2021 Infrastructure Act, according to The Guardian.
And Biden would like to increase spending on social services, health care and education.
But, as The Wall Street Journal’s chief economics commentator Greg Ip, wrote, “it’s logically inconsistent for Biden to disown inflation while taking credit for tight labor markets since they are mirror images of the same thing: an overheated economy.”
Desmond Lachman, a senior fellow at the American Enterprise Institute, told Fox News that while these policies may have boosted employment, they also led to higher inflation.
“They spend like drunken sailors — that is what’s causing problems,” Lachman said. “It’s easy to get unemployment down for a short period of time, but it’s difficult for a long period of time. The way they got it down so much is by overstimulating the economy, but now they have inflation.”
Meanwhile, Republicans, like House Speaker Kevin McCarthy, have criticized Bidenomics as “an economic disaster.”
McCarthy in a tweet last week tried to redefine “Bidenomics” as an “economic disaster” behind the cause of “decades-high inflation, high gas prices, lower paychecks, and crippling uncertainty that leaves Americans worse off.”
On Thursday, McCarthy said Biden’s economic agenda is a “bust” and “does nothing to utilize the resources God has blessed America with.”
“What we need is a long-term plan to make China and India dependent on American natural gas,” he added.
Whether or not Bidenomics works, it’s still considered “quite likely” that the U.S. will enter a recession this year, as Fed committee members said in a meeting mid-June.
This possibility — paired with the already burdened working- and middle-class — could make Bidenomics a hard sell.