Heather Cox Richardson reports on Biden’s first year successes
Have you heard of Heather Cox Richardson? She is a History Professor from Boston who writes a daily “Letter to Americans.” Relatively short, the letters comment on some aspect of that day’s news with an historical perspective. On December 30, she summarized the accomplishments of the Biden Administration. I urge folks to read that letter.
It is available here https://heathercoxrichardson.substack.com/p/december-30-2021
I want to focus on the economic data that she uses to support her view that the Biden Administration has been very successful, notwithstanding the polling data that suggests widespread dissatisfaction with the economy.
And that polling data is stark. Check out, “Biden disapproval hits new high as voters give him bad grades on economy, new CNBC/Change poll says,” available at https://www.cnbc.com/2022/01/04/biden-disapproval-rating-high-voters-blame-him-on-economy-cnbc-poll.html. According to the article, “Frustrations over the economy are the main culprit behind Biden’s flagging popularity as nearly every demographic declared it their No. 1 issue. … Sixty percent of the survey’s 1,895 respondents said they disapprove of Biden’s handling of the economy, marking a six-point decline in approval from September. On personal economic issues, voters are even more likely to criticize the president. Some 72% disapprove of his handling of the price of everyday goods, while 66% disapprove of his efforts to help their wallets.”
This is an example of an amazing disconnect. In fact, the economy is doing quite well, as Richardson made clear in her letter.
Because of the resurgence of COVID in its delta and omicron variants, most Americans have probably forgotten that Biden made sure that the vaccines that were ready to be utilized by the end of 2020 actually got into arms. He did this by invoking the Defense Production Act which accelerated the production of the vaccines that had already won approval from the FDA. Biden’s administration, (according to Richardson’s letter) “also worked with states to establish vaccine sites and transportation to them and .. vaccine centers in pharmacies.” Though resistance to vaccines fanned by fake news outlets like Fox and Newsmax by made it impossible for Biden to reach the goal of 70% of adults being vaccinated by July 4, the rate of vaccination was initially very impressive.
But that was not all. Many people seem to have forgotten that without a SINGLE Republican vote, the Biden Administration was able to spend $1.9 trillion beginning in March of this year. This spending has helped dramatically cut the unemployment rate and one aspect, the expanded refundable child tax credit cut child poverty IN HALF. Had that bill not passed, federal spending was going to decline which would have aborted the recovery from the deep recession that had been caused by COVID in 2020. (In 2020, federal spending was 45 percent of GDP in large part because GDP had fallen dramatically --- from 21 trillion 373 billion to 20 trillion, 894 billion.). The INCREASE in federal spending in 2021 helped the economy recover. (As a result the ratio of federal spending to GDP actually fell to 30% in fiscal 2021 because GDP recovered dramatically --- the predicted number for all of 2021 is 22 trillion, 940 billion.).
The kick to federal spending in March led to more consumer spending which dropped the unemployment rate from 6.2 percent in February of 2021 to 4.2 percent in December. (Again, quoting Richardson): “4.1 million jobs were created in the Biden Administration’s first year, more than were created in the twelve years of the Trump and George W. Bush Administrations combined.” Lower unemployment led to wage increases that for the most part outpaced inflation despite the spike that occurred in the third quarter.
Though much of the political news focuses on the difficulty the Biden Administration is having convincing one Democratic Senator to support the Build Back Better bill, Richardson reminds us that a $1.2 trillion traditional infrastructure bill passed in November. The Trump Administration had both houses of Congress for its first two years and never even came close to getting an infrastructure bill through either House of Congress.
Richardson then introduces data on the overall growth of the economy, noting how much higher it is than in most of the industrialized world. “Bloomberg and the Wall Street Journal report that U.S. economic output jumped more than 7% in the last three months of 2021. Overall growth for 2021 should be about 6%, and economists predict growth of around 4% in 2022—the highest numbers the U.S. has seen in decades. China’s growth in the same period will be 4%, and the eurozone (the member countries of the European Union that use the euro) will grow at 2%. The U.S. is “outperforming the world by the biggest margin in the 21st century,” wrote Matthew A. Winkler in Bloomberg, “and with good reason: America’s economy improved more in Joe Biden’s first 12 months than any president during the past 50 years….”
Sometimes, national figures on economic growth mask problems for ordinary people. Given how unequally distributed are the fruits of economic growth in the US, overall national figures can be misleading. Not so today. The lower income people in the United States have benefited from current economic growth.
In fact, despite the fact that lower wage workers experienced greater job loss during the recession caused by the outbreak of COVID-19, the quick recovery of employment meant that between 2019 and the middle of 2021, wages for low income as well as high income workers remained steady. In other words, the rise in GDP did not mask an increase in inequality. (And as shown in my last commentary, some low wage workers --- especially those in hospitality --- found themselves with significant wage increases over the course of this past year.)
(The exception of course are those workers still unemployed --- but as noted above, the unemployment rate fell significantly over the course of last year.)
So why is public opinion so negative about the economy and Biden’s economic policies?
I asked an economist friend, Gene Steuerle of the Urban Institute, and his short, pithy answers was: “Negative news pays. It’s often that simple.” He is of course right as far as the mainstream media is concerned. However, we should not underestimate the role of dishonest so-called “news” outlets like Fox and Newsmax. They have created a bubble which a significant minority of Americans treat as gospel while everything else is dismissed as “fake news.”
So, right now, public opinion is very negative about the economy and the Biden Administration’s policies. If the mainstream media will actually report the facts and not emphasize “bad” news such as a spike in the price of gasoline (which has fallen since its peak on November 15 – see https://ycharts.com/indicators/us_gas_price for an interactive diagram), perhaps the perception of the economic realities will change. Also, lived experiences by ordinary people over the next months should make a difference. Those right wing outlets and their dishonest anchors will continue to lie about the economy, what else is new? But real people, experiencing real increases in income will be the best antidote to those lies.
Let’s hope the new year brings more understanding of the reality we are living through. And that the public reacts to the lies of the nay-sayers appropriately come November.
On Friday, January 7, the government released figures re the economy.
My economist friend, Dean Baker, did an analysis of the recently released data and if anything the numbers are even better than Richardson stated on December 30. Check out Baker's analysis here.
Michael Meeropol is professor emeritus of Economics at Western New England University. He is the author with Howard and Paul Sherman of the recently published second edition of Principles of Macroeconomics: Activist vs. Austerity Policies
The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.