Even Trumpers are having to admit it.
By TOM
REDBURN
Perhaps the only comparable periods were the late 1990’s
in the midst of the Clinton-era tech boom driven by the expansion of the
Internet, and the mid–to-late 1960s, after the Kennedy-Johnson tax cuts of 1964
and before a combination of Vietnam War and Great Society spending forced the
government to raise interest rates and taxes to try to restrain inflation.
We’re still living in an era of deep inequality, of course, ushered in by profound changes in the global economy and the neo-liberal policies initiated during Ronald Reagan’s presidency.
But the tight
labor market of recent years has helped narrow the gap, as workers in the
bottom half of the income ladder have made outsized gains, while the growing
strength of labor unions has also lifted the fortunes of blue-collar industrial
workers, even those not unionized as employers raise wages to compete.
All in all, despite ongoing problems with expensive
housing and health care costs, Americans are doing so well heading into this
election year that the economy should provide plenty of support for the
incumbent president despite the rose-colored contentions of his far less
successful predecessor.
Writing in The Washington Monthly, economist Robert. J. Shapiro lays out the undeniable comparison between the economic performances of Joe Biden and Donald Trump.
“Donald Trump’s prospects for a second presidential term
may well rest on whether voters accept his proposition that facts no longer
matter. A case in point is his narrative that the economy was stronger during
his presidency than under President Joe Biden. With few reality checks from the
economic media, most of the public apparently agrees: One recent survey found that voters prefer Trump over
Biden on the economy by 59 percent to 37 percent.
“As Trump closes in on his third GOP presidential
nomination, it’s time to set the record straight: By virtually every measure,
that narrative is patently false.
“From growth and jobs to investment and business
creation, the economy has performed substantially better under Biden than it
did under Trump. Biden’s superior record holds even if we set aside the
pandemic’s impact in 2020. The exception, of course, is inflation. But just as
the COVID-19 pandemic led to the collapse in Gross Domestic Product and
employment during Trump’s last year in office, it was also the main reason
prices rose so much for a time here and globally, according to new analysis
from the Federal Reserve. . .
“Based on spending, consumers also prefer Biden’s
economy. From 2021 to 2023, real personal expenditures increased an average of
4.5 percent per year, versus Trump’s record of 2.6 percent from 2017 to 2020.
In this case, a pandemic pass for Trump increases Biden’s advantage: Real
consumer spending grew 2.0 percent per year from 2017 to 2019, an annual rate
that trails Biden by 55 percent.
“On employment — on top of growth, investment, and
consumer spending — Biden puts Trump’s record to shame. The Bureau of Labor
Statistics (BLS) reports that since Biden became president, the
number of Americans with jobs has increased by 14.3 million—versus a net loss
of 2.7 million over Trump’s term, the first decline since Herbert Hoover.
“There’s a reasonable argument that a more accurate
picture of job creation under Trump and Biden should set aside the collapse in
employment during the early pandemic and the bounce
back from that collapse in 2021. Even so, Biden beats Trump handily. Under
Biden, from January 2022 to December 2023, employment grew at an average annual
rate of 2.4 percent compared to a 1.5 percent rate under Trump from January
2017 to February 2020. That’s another Biden win, this time by a margin of 60
percent. . .
“Far from mismanaging inflation, Biden tamed it. [Though
I’d give more credit to Fed chairman Jerome Powell for that.] As a result,
America has fared better than other advanced countries. In 2023, while U.S.
consumer prices rose 3.3 percent, they increased 4.1 percent in France, 3.9
percent in Great Britain, and 3.7 percent in Germany. And we beat inflation
without sacrificing growth: In 2023, real GDP grew 2.5 percent in the United
States compared to growth rates of 1.0 percent in France, 0.5 percent in the
United Kingdom, and negative 0.5 percent in Germany.
“I’ve been a pushover for data ever since I oversaw the
Bureau of Economic Analysis and Census Bureau as the Under Secretary of
Commerce in the late 1990s. But politicians and the press must also take real
economic numbers seriously. It’s time to reframe the narrative based on data
that rigorously tracks what happens in the economy and not on mythmaking.
President Biden’s record not only eclipses Donald Trump’s, but when policy made
a difference — on growth, employment, investment, and inflation — Biden stepped
up and improved our economic conditions. Those are the facts.”
Fortunately, the narrative of the so-called
“viberecession” is changing as public perceptions are catching up with reality.
The latest jobs report even seems to have chastened fools like former Trump
adviser Larry Kudlow, who still pontificates on Fox News and CNBC despite his
abysmal record as both an economic policymaker and forecaster.
“I was wrong about the recession,” Kudlow said on Groundhog Day after the monthly
employment report estimated the American economy added more than 350,000 jobs
in January. Job gains for all of 2023 were revised up by more than 300,000 to a
total of 3 million, and the jobless rate remained at a very low 3.7 percent.
“Everybody was wrong.”
That last point is not true, but it was a common error.
[Editor’s Note: During Trump’s first three years, so
before the pandemic, the economy added on average 180,000 jobs a month. Under
Obama once the effects of the Great Recession ended in early 2010, job growth
averaged 190,000 new jobs per month, 5% better performance than Trump.
Biden has averaged 400,000 jobs per month since February 2021. Excluding
the nearly eight million net jobs lost during Trump’s last 11 months in office,
the Biden economy has added more than 174,000 new jobs per month.]
After a long string of coverage emphasizing problems like
inflation, high interest rates, and the threat of recession, reporting in The New York Times also shifted markedly on
Friday, with three separate pieces painting a positive picture of the American
economy.
Jim Tankersley, one of the most perceptive economic
reporters in the country, was given the assignment of assessing the political impact of today’s sunny
economy.
“A run of strong economic data appears to have finally
punctured consumers’ sour mood about the U.S. economy, blasting away recession
fears and potentially aiding President Biden in his re-election campaign.
“Mr. Biden has struggled to sell voters on the positive signs in
the economy under his watch, including rapid job gains, low unemployment and
the fastest rebound in economic growth from the pandemic recession of any
wealthy country.
“For much of Mr. Biden’s term, forecasters warned of
imminent recession. Consumers remained glum, and voters told pollsters they
were angry with the president for the other big economic development of his
tenure: a surge of inflation that peaked in 2022, with the fastest rate of
price growth in four decades.
“Much of that narrative appears to be changing. After
lagging price growth early in Mr. Biden’s term, wages are now rising faster
than inflation. The economy grew 3.1 percent from the end of 2022 to
the end of 2023, defying expectations, including robust growth at the end of
the year. The inflation rate is falling toward historically normal levels. U.S.
stock markets are recording record highs.
“The Federal Reserve, which sharply raised interest rates
to tame price growth, signaled this week that it was likely to start cutting
rates soon. ‘This is a good economy,’ Jerome H. Powell, the Fed chair, whose
central bank is independent from the White House, declared at a news conference
this week…
“‘Today’s report is another in a long line of
expectation-busting gains on behalf of working Americans,’ Jared Bernstein, the
chairman of the White House Council of Economic Advisers, said in an email on
Friday. ‘And with easing inflation, we’ve got wages handily beating prices,
meaning more buying power. Importantly, confidence measures, including a 13
percent surge in January from the [University of Michigan] survey, suggest that
people are reliably starting to feel these gains…’
“The narrative shift is also evident in the way Mr.
Biden’s critics talk about the economy. Some have resorted to scouring recent
data for any sign of weakness.
“Alfredo Ortiz, the president and chief executive of the
Job Creators Network, a conservative advocacy group, said on Friday that the
jobs report was ‘not the home run that Democrats and the mainstream media
claim.’ He noted that ‘employment actually declined last month in the mining,
quarrying, and oil and gas extraction industry. This economic sector lubricates
the American economy and provides jobs to support a family on.’
“…Trump has gone further, suggesting that large recent
stock market gains are a result of investors believing he will defeat Mr. Biden
in November and return to office — a theory that few, if any, Wall Street
economists endorse.’
“When asked on Fox Business Network on Friday why stocks
were rising if the economy was bad under Mr. Biden, Trump replied, ‘because they think I’m going to be
elected.’”
That’s looking less likely these days.
Tom Redburn retired
from The New York Times at the end of 2016. In 23 years at the paper, he served
as economics editor, deputy business editor and managing editor of the
International Herald Tribune in Paris. Before that, he was a reporter at the
Los Angeles Times, the IHT and The Washington Monthly. Reburn lives in
Plymouth, Mass., where he is on the board of the Plymouth Independent, a local
news organization, and writes the newsletter Redburn Readson Substack.