I’ve been struck by the opinion divide on the state of the economy between people with real jobs in America and the elite opinions in Washington.
Gallup and other primary and reputable pollsters find that the public is very worried. About 2 in 10 respondents rate the U.S. economy as good or great. That compares with nearly 6 in 10 people who thought the economy was good or great throughout Donald Trump’s presidency. In other words, three times the number of people liked the way things were going under Trump policies than feel the same way about Bidenomics.
The Washington Post, The Atlantic and other rags inside the Beltway ― the one place on the planet that gets richer when the rest of the country gets poorer — have been wondering why the public is so down in the dumps. The standard view inside the Beltway is that the public just doesn’t appreciate how well the country is doing. They say the job market is robust, and that is true. The public has made a lot of money in the stock market. Also true, until recently. And we are doing better than France and Italy and Germany.
To listen to this chorus, which includes the White House economics team, you’d think we should be partying like it’s 1999! President Joe Biden says he’s abandoned “trickle-down economics.” Instead, he’s setting the course for a sturdier and more robust economy. But rather than “building back better,” we’d probably be much better off if he’d just left things the way he found them.
The public is right to have its “spidey senses tingling.” Unfortunately, it feels to many like we’re on the beach and the winds are calm, but a tsunami is coming.
They are right to be afraid. Over the past two and a half years, since the start of COVID, we have spent and borrowed in Washington $5 trillion we don’t have. Our welfare and give-away programs have chased millions out of the workforce for two years now and into the hammock. Free rent. Free medical care. Free food. No need to rush back to work. As The New York Times put it recently, Biden is implementing “cradle to grave” government.
We’ve practiced a crank idea called Modern Monetary Theory that instructed us that we could go on spending and borrowing without worrying that the bubble will pop. People like Janet Yellen, Alexandria Ocasio-Cortez and Bernie Sanders actually drank this Kool-Aid.
But guess what? The bubble’s already popping. Over the last year, the inflation rate of 8.3% is outpacing the wage increases of 5.4%, and that’s been the case for virtually every month that Biden has been in office. By contrast, The Wall Street Journal reports that wages outpaced inflation every year that Trump was in office.
So consider family incomes. Under Trump, median household incomes rose by about $6,000. And that wasn’t for the rich. Working-class people saw those giant gains in living standards and purchasing power. Under Biden, we don’t have the census numbers yet, but based on the wage and inflation numbers, it is likely that the typical middle-class family has lost somewhere between $2,000 and $4,000. And this is supposed to be a recovery.
The losses worsen month after month, and inflation stays above the wage gains. In other words, the public isn’t just imagining that the economy and family finances are heading south. They are.
This was so predictable due to the overspending and the war on American energy that only a liberal with ideological blinders on couldn’t see it coming.
But instead of calling off the failed economic strategy, Biden, House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer are still peddling green energy and the $3 trillion Build Back Better bill. No wonder the stock market and pension funds have lost an estimated $7 trillion in the last three months.
No one in the White House or the media will admit any of this. They’re doing just fine, thank you. It seems the only thing that will turn things around is a regime change.
Stephen Moore is a senior fellow at Freedom Works. He is also author of the new book: “Govzilla: How The Relentless Growth of Government Is Devouring Our Economy.”