Don’t believe the White House hype: Biden is ruining the economy, not fixing it
Following the release of jobs data indicating nonfarm payrolls increased by 943,000 in July, the Biden administration has repeatedly claimed the better-than-expected jobs increase is a sign that the “Biden plan” to fix the economy is working.
For example, in a press statement on Aug. 6, President Biden said it is now “indisputable” that “the Biden plan is working,” as well as that, “The Biden plan produces results, and the Biden plan is moving the country forward.”
On Wednesday, Biden continued his victory lap, claiming, “Economic growth is up to the fastest in 40 years, and unemployment is coming down.”
“This isn’t accidental,” Biden later added. “It is the result of our strategy to get shots in arms, grow the economy from the bottom up and the middle out. And it’s the rest of the — the result of the American Rescue Plan and everything else that we’ve done.”
Although the creation of 943,000 new jobs in July is undoubtedly good news, the Biden administration deserves very little credit for these gains. And even more importantly, when put into proper context, the recent jobs figures are, at best, a huge disappointment.
At the end of 2019, just prior to the outbreak of the coronavirus pandemic, the U.S. economy was still roaring. Fueled by Republicans’ 2017 tax reform law and the Trump administration’s commitment to reducing unnecessary government regulations, unemployment in numerous categories had reached historic or near-historic lows, including for African Americans, women, workers without a college degree and Hispanics.
After state and federal officials began locking down economic and social activities across the United States in early 2020, the economy faced an unprecedented collapse. From Feb. 2020 to April 2020, more than 16.35 million full-time jobs were destroyed.
From May 2020 to Jan. 2021, the final month of the Trump administration, many of the full-time jobs that had been lost during the government-imposed lockdowns returned as states started to reopen increasingly larger parts of their economies.
According to data from the Bureau of Labor Statistics (BLS), by the end of Jan. 2021, 10.66 million of the 16.35 million full-time jobs destroyed during the pandemic had been recovered, an average of 1.18 million jobs recovered per month.
Since Biden entered the White House, 2.47 million full-time jobs have been added, an average of just 412,666 jobs per month.
The rate of improvement for full-time workers did increase in July 2021, after three months of very little growth in the number of full-time jobs. But almost all of the gains were related to the further loosening of economic restrictions imposed during the pandemic, regulatory changes at the state and local levels only made possible because of the creation of a few important COVID-19 vaccines — none of which had anything to do with Biden, who wasn’t in the White House when they were developed.
Some have claimed that the Biden administration still deserves credit for the recent economic gains, because it is his administration that has overseen the vaccine rollout in 2021. But even the New York Times, a longtime critic of President Trump, has acknowledged, “Mr. Biden benefited hugely from the waves of vaccine production that the Trump administration had set in motion.”
The Times further acknowledged, “Mr. Biden had been in office less than a month when Moderna announced that it could deliver 200 million doses by the end of May, a month earlier than scheduled, simply because it had become faster at production. Pfizer was able to shave off even more time, moving up the timetable to deliver its 200 million doses by a full two months, partly because of newfound efficiencies and partly because it was given credit for six doses per vial instead of five.”
Most importantly, although the economy has managed to recover about eight in 10 of the full-time jobs lost, there are still four million fewer full-time workers today than there were in Dec. 2019 and 1.71 million fewer part-time workers.
There are also 4.52 million more people who are not in the labor force, despite millions of open jobs, trillions upon trillions of dollars of additional debt and a growing inflation problem.
According to BLS, the “all items” Consumer Price Index “rose 5.4 percent for the 12 months ending July, the same increase as the period ending June,” and wage growth has been unable to keep up. That means inflation is effectively making millions of American families poorer every month.
Meanwhile, wealthy Wall Street investors and corporations have become increasingly wealthier, thanks almost entirely to the Federal Reserve’s reckless money-printing policies, and housing has become more unaffordable than ever. The median sales price of a home sold in the second quarter of 2021 was more than $50,000 higher than it was just one year prior.
The Biden administration and congressional Democrats aren’t done spending money, either. They are on the verge of pushing trillions of dollars in new infrastructure spending and government programs, policies that will continue to cause inflation and may pose a serious risk to the stability of the economy. In the past, rapid inflation and skyrocketing home prices have been strongly associated with economic downturns and/or a stock market crash.
President Biden hasn’t saved the economy from disaster. The modest progress we’ve seen under his administration is due mostly to the work of state lawmakers and vaccine makers. His reckless spending programs have the potential to push the country toward another financial catastrophe, perhaps as soon as within the next year or two.
That’s hardly a record worth celebrating.
Justin Haskins (Jhaskins@heartland.org) is the editorial director of The Heartland Institute and the director of Heartland’s Stopping Socialism Project.