One of the frustrating things for Democrats heading into an election year is that Joe Biden is getting little credit for the economic recovery under his watch, and continues to lag in polls, as working people think Biden has done little good for them. They reminisce about the good times when Donald Trump was in charge — before the COVID pandemic spurred economic collapse and rampant inflation worldwide. Biden beat the increasingly unbalanced incumbent fair and square, but Trump supporters tried an insurrection to keep their fake populist cult leader in power.
Biden was blamed for higher prices for goods as the nation emerged from the pandemic, even though inflation in the US, which topped out at 9.1% in June 2022, was lower than other industrialized nations.
On Oct. 26, the Department of Commerce announced that the nation’s gross domestic product grew at an annual rate of 4.9% in the third quarter. This growth rate ran well above even optimistic forecasts, economist Dean Baker noted. The next week, Biden boasted that the 3.9% jobless rate in October was the 21st consecutive month of unemployment below 4%, the longest stretch in more than 50 years. The following week the Labor Department reported inflation was flat in October. The Core Consumer Price Index, which excludes food and energy, hit a two-year low. And food and fuel prices are also trending down.
Remember that the unemployment rate was 4.7% when Trump took office in January 2021. Barack Obama had put the economy back on track after George W. Bush left it in a recession. The economy was running smoothly when Obama turned it over to Trump, and he rode it for three years, as 6.7 million jobs were created and the jobless rate dropped to 3.5% in January 2020. Good times! But then COVID struck, the unemployment rate shot up to 14.7% in April 2020, and 19.3 million jobs were lost. The economy recovered 9.9 million jobs by January 2021, the jobless rate dropped to 6.7% and Trump finished with a net loss of 2.67 million jobs.
Restoring the economy and getting the US back to normal was a key focus for Biden as he moved into the Oval Office. Under Biden, Democrats managed to pass four major economic packages. The first, the $1.9 trillion American Rescue Plan, passed on a party-line vote in March 2021, sent $1,400 stimulus checks to working-class Americans, extended increased unemployment benefits, provided funds for vaccine distribution and school reopenings and expanded health insurance subsidies and the child tax credit, which lifted 2.9 million working-class families out of poverty. The bipartisan $1.2 trillion Infrastructure Act was passed in November 2021 and the $891 billion Inflation Reduction Act (IRA) and the $280 billion CHIPS and Science Act, both passed in 2022 on party lines, were loaded with tax incentives and direct funding for industrial projects and operations.
Construction jobs have grown by 676,000 through October 2023, totaling 8,033,000, According to the Census Bureau, the construction build-out has happened especially fast in the Mountain division in the West, which includes states like Utah, Colorado and New Mexico. South Central divisions have also seen a marked rise.
“Honest to goodness, [the top of my agenda] is finding and training qualified manpower, because that’s what’s needed. We don’t have enough,” Courtenay Eichhorst, president of the New Mexico Building and Construction Trades Council, told The Hill in June.
Manufacturing jobs have grown by 799,000 since Biden took office, for a total of 12,960,000, not including 35,000 workers who were on strike and returned to work in November.
Trump increased the budget deficit from $665 billion in 2017 to $983 billion in 2019, then during COVID it vaulted to $3.1 trillion. Biden got the deficit down to $1.375 trillion in 2022 but it bounced to $1.6 trillion in 2023.
The CHIPS and Science Act was particularly intended to reinforce the semiconductor industry in the US, after manufacturers that depend on computer chips experienced a major shortage from East Asian manufacturers, such as Taiwan, after the pandemic eased. Concerns grew over the territorial ambitions of China, the US’s main economic and military rival, which was taking an increasingly aggressive stance toward Taiwan.
The investments in the CHIPS Act may have moved China’s President Xi Jinping to throttle down the move toward confrontation with the US. When Biden and Xi met in San Francisco Nov. 15, Xi arrived somewhat weakened, owing to the Chinese economy’s recent underperformance. Youth unemployment is high, exports and foreign direct investment are down, and debt is a major issue, Richard Haass, a former aide to George W. Bush, noted in a column after the meeting. “The last thing Xi and China’s economy need are more US export controls, sanctions, and tariffs,” Haass wrote.
After the passage of Biden’s economic package, investment in manufacturing construction shot up to $200 billion in May 2023, more than doubling pre-pandemic levels. Total jobs in the US surpassed Trump’s high point in June 2022, and since then, another 4.5 million jobs have been created, for a total of 13.95 million jobs created under Biden through October.
Biden and Xi had a useful session, agreeing to restart military-to-military communications, curb the deadly opioid fentanyl, cooperate in the fight against climate change, and discuss risks associated with artificial intelligence. But the relationship has been deteriorating for several years and will remain typified by competition more than anything else for the foreseeable future, Haass noted.
As for the impact of inflation, “Fresh data released by the Federal Reserve [in October] confirms that Americans’ inflation-adjusted net worth surged between 2019 and 2022, and real incomes are up as well,” Matthew Yglesias noted at Bloomberg Opinion. “There’s plenty of room to debate and even second-guess the stimulative policies enacted during COVID, but it’s just not the case that inflation has left people worse off than they were before. The labor market recovered rapidly and robustly from pandemic disruptions.”
Sen. Bob Casey, D-Pa., who is up for re-election in 2024, sees most of the price increases as due to corporate greed. He noted that prices on chicken and pork have outstripped inflation.
Even potatoes, traditionally a cheap staple food, have had significant price increases in recent years, now sitting at 60% over last year. And the largest producer of frozen potato products, Lamb Weston Holdings, told shareholders, “it has greatly outperformed the S&P 500 over the past several years because its potatoes are ‘one of the highest-margin food items on the menu.’”
Overall, Casey reports, “For the average Pennsylvania family, costs went up by $3,194 in 2021 and by $3,546 in 2022, just due to corporate profiteering.” To fight back, Casey calls for Congress to pass bills like the Price Gouging Prevention Act and the Big Oil Windfall Profits Tax, as well as stronger enforcement of existing consumer protection regulations.
That will require re-election of Joe Biden, who at 81 still appears in better shape than most of his critics, and also holding onto, and expanding the Democratic majority in the Senate, along with putting a Democratic majority in the House and sending current House Speaker MAGA Mike Johnson back to the bench. — JMC
From The Progressive Populist, December 15, 2023
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