E.J. Antoni on May 27, 2022
The latest data from the Department of Commerce shows gross domestic product (GDP) contracted in the first quarter even more than originally estimated, falling 1.5%, the first downturn since the pandemic’s onset. Just as economic growth has turned on its heels and headed backwards, so too has the White House’s messaging on the economy notably shifted.
President Joe Biden has repeatedly taken credit for the economic recovery from the government-imposed shutdowns, completely ignoring the fact that former President Donald Trump added 12.5 million jobs during the current recovery, while Biden has added fewer jobs in more time.
Too busy bragging about his handling of the economy, Biden has spent the last 18 months trying to kill the goose that was laying golden eggs for him.
Yet for over a year, the White House has touted the strength of the economy, particularly the labor market, and has proceeded to take credit for the nation’s economic growth. The fact that Trump bequeathed Biden an economy that was energy independent and flourishing after tax reform and deregulation was ignored. It was Biden who deserved full credit for the splendid economic recovery.
These unforced errors are directly responsible for the current economic malaise, but you would never know that from listening to the White House. Instead, a host of other factors are to blame, like the cessation of pandemic-era “stimulus” checks. Rather than touting the economy, the president now seeks to distance himself from it.
Somehow, the president is no longer single-handedly responsible for the economy, or a stock market that had more consecutive weeks in the red than any time since the Great Depression.
It is reminiscent of the White House’s Orwellian talking points on inflation over the last 18 months. First, they denied inflation existed, and then said it was transitory after it became impossible to deny rising prices. Shortly thereafter, it was a high-class problem, and then inflation was somehow good for you. More recently, inflation is back to being bad and is now caused by Russia, greedy corporations and speculators — anyone but Biden.
The depth of that liability is more than the 1.5% decrease in GDP, which was worse than expected. Prices rose by 8.0%, also worse than expected. Inflation is so high that all of the savings accumulated during the pandemic have now begun to dwindle, with savings collapsing 79% since Biden took office. Real earnings (earnings adjusted for inflation) are down. Credit card debt is exploding. And all in an environment of rising interest rates as the Fed finally gets around to doing its job.
The initial data for April from the Bureau of Labor Statistics and the Census Bureaus indicate more of the same for the second quarter. This is rattling financial markets which are finally realizing that much of the apparent growth we’ve seen over the last 18 months was not real growth but monopoly money sloshing around the economy. Biden was taking credit for the illusion of growth, but now wants no blame for the reality of recession.
By the time the midterms roll around, it is very likely that the economy will officially be in a recession, at which point the Republicans will want to talk about nothing else. Meanwhile, the Democrats’ only options will be to ignore the topic or ironically blame those who warned them about the consequences of spending trillions of dollars, financed by the hidden tax of inflation.
This political arithmetic will almost surely yield widespread Republican victories in the midterms. Those Republicans would then do well to remember why they were sent to Washington – to stop the spending, borrowing and printing charade.
E. J. Antoni is a research fellow for regional economics in the Center for Data Analysis at The Heritage Foundation and a senior fellow at Committee to Unleash Prosperity.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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