Bidenomics Is Bad Economics | RealClearPolicy
Praise for Bidenomics from some media sources might lead people to believe our economic situation has never been better. What most Americans are experiencing is far less rosy. Inflation is no longer just a buzzword whispered in economic circles. It’s a harsh reality hammering the wallets of Americans. Families across the nation are feeling the pinch, as they struggle to cover necessities like food and fuel. A gallon of milk that cost $3.12 during the Trump presidency (2017-2020) now costs $4.01, a 29% increase. Unfortunately, wages have not kept up with growing costs.
Despite reassurances from the Biden Administration and its allies in the media, the undeniable truth stares us in the face: the economic policies touted as saviors are, in fact, exacerbating the financial burdens of hardworking Americans.
During the Trump presidency, the average price increase for goods and services was a modest 7.6% over four years. That is less than 2% increase in prices for each of those four years. Contrast that with the more than 5% increase in prices for each of the last three years. This amounts to a staggering 17.6% increase in costs under President Biden’s watch, with one year remaining. This isn’t just a blip on the economic radar. It’s a troubling trend that spells disaster for household budgets across the nation.
Source:
These price increases are a direct result of the Biden Administration’s spending bills. Ironically, one of these bills was named the Inflation Reduction Act.
For blue-collar workers—particularly, women workers—the impact has been devastating. Under the Trump Administration, real (inflation-adjusted) median weekly earnings saw a $63.10 increase for all workers and an impressive $78.80 increase for women workers. Fast forward to the Biden era, and real median weekly earnings have plummeted by $13.20 for all workers and a staggering $23.70 for women workers.
Source:
Black workers and Hispanic workers have also fared significantly worse in the Biden era. Black workers experienced $65.70 increase in real weekly earnings in the Trump era compared to $28.80 in the Biden era. Hispanic workers experienced $47.20 increase in real weekly earnings in the Trump era compared to $7.80 in the Biden era.
Middle-class families find themselves grappling not only with skyrocketing inflation but also with the specter of unaffordable housing. Mortgage interest rates have surged by a jaw-dropping 70% in just three years. During the Trump presidency, a 30-year fixed rate mortgage average in the U.S. was 3.89%. It is now 6.60%. Monthly mortgage payments for a median-priced home have ballooned by over $1,000 compared to the Trump era, making the dream of homeownership feel more like a distant fantasy than a tangible goal.
So, is Bidenomics working? For the millions of struggling Americans grappling with inflation, stagnant wages, and unattainable housing, the answer is a resounding no.
It’s time for policymakers to wake up to the harsh reality facing everyday Americans and take meaningful action to address the economic challenges squeezing the life out of the American dream. That has to start with a different mindset about how to approach government spending. Here Washington should take a lesson from states that scrupulously balance budgets and prioritize outlays based on available resources.
Unfortunately, federal lawmakers have become far too comfortable with deficit spending, and with this unconstrained view of resources, they’ve embraced new ways for government to “solve” problems with taxpayer money. The Inflation Reduction Act is the most egregious example, more than a trillion in spending for what amounts to a social engineering experiment, but members on both sides of the aisle are guilty of “authorizing beyond America’s means.”
Until leadership in Washington confronts the hardships everyday Americans are facing and acts accordingly, the rhetoric of economic success will ring hollow in the ears of those who bear the brunt of misguided policies.
Sanjai Bhagat, PhD, serves on corporate boards, and is author of Financial Crisis, Corporate Governance, and Bank Capital (Cambridge University Press).
Marlo Oaks is the Treasurer of the State of Utah. He graduated with a degree in economics from Brigham Young University and an MBA from the University of California, Los Angeles Anderson. He also holds the CFA and CAIA investment designations.
