The Biden administration is facing increasing criticism over its handling of the economy as many Americans continue to struggle with high inflation and soaring costs. Yet the White House is attempting to paint a rosier picture through a public relations campaign dubbing their economic policies “Bidenomics.”
However, the facts on the ground contradict the administration’s claims that things are getting better. At the grocery store, costs remain elevated for basic goods as inflation hovers near 40-year highs. Millions of families have seen energy and fuel prices surge over the past two years, with gas costing 60-70% more per gallon today compared to January 2021. Interest rates have also spiked, meaning car payments and other financed big-ticket purchases are considerably more expensive now versus just a couple years ago.
Simply put, ordinary Americans are feeling the pinch across all household budget items. But the administration wants people to believe otherwise through promotional gimmicks like Bidenomics. The reality is the reckless government spending and money printing policies pursued by Biden and the Democrats in Congress have directly fueled higher inflation. Their answer is to now expect American families to shoulder the burden and pain needed to get rising prices under control.
The Federal Reserve has been raising interest rates aggressively in order to reign in inflation, which is absolutely necessary. However, the side effect is that policy tightening also slows economic growth and makes borrowing more costly for both businesses and consumers.
So Americans are not only dealing with sky-high grocery, electricity, heating, and gas bills caused by misguided federal government policies. Now the very interest rate hikes required to correct those policy mistakes will also restrain people’s ability to finance major purchases going forward. Home loans, auto loans, and credit card rates will all steadily rise thanks to the Fed’s actions.
While the Fed certainly recognizes the economic pain this will continue to inflict on typical households, they have little choice if runaway inflation is to be contained. By flooding the economy with stimulus checks and ramping up spending to unprecedented peacetime records, the Biden administration made this painful monetary policy remedy inevitable.
What is perhaps most frustrating to many Americans is the Biden administration’s refusal to take accountability for the economic calamity they have unleashed. At no point has the White House said their excessive spending and expansion of the national debt have backfired. Nor will they admit the giant tax and spending bill passed last year as the Inflation Reduction Act has failed to reduce inflation whatsoever.
Instead, Biden officials angrily defend themselves when pressed on these clear policy failures. Or they try distraction tactics by claiming they are fixing supposed problems that do not really exist – all the while avoiding the true economic hardship happening across America in a high inflation environment.
The administration also continues pushing the narrative that wage growth is strong right now. While it is true average hourly earnings have increased solidly on a year-over-year basis recently, this overlooks two critical points.
First, the majority of pay gains enjoyed by workers have been eaten up by inflation or remain below the inflation rate. So the buying power and real wages of employees have, at best, just kept pace for certain segments of the labor market. For many other workers, actual purchasing power has declined as pay hikes still lag rising consumer costs.
Secondly, by historical standards the current pace of wage growth is quite typical in the late stage of an economic expansion when the labor market is exceptionally tight. It is not at all uncommon to observe 5-6% annual pay increases when the unemployment rate is as low as it is now. The fact wage growth seems slightly better than usual owes largely to there being over 10 million job openings in the country, allowing workers greater leverage to find higher-paying jobs or negotiate better terms with current employers.
The growing rejection of Biden as a credible leader also signals yet another establishment political dynasty falling out of favor with voters. In recent decades names like Clinton, Bush, and Biden have wielded enormous influence in Washington and the major political parties. Yet all now face a backlash after years of perceived corruption, self-dealing, and dishonesty while in the halls of power.
Younger generations seem especially fed up with the pattern of former presidents, senators, and other senior officials cashing in through six-figure speeches to Wall Street banks, foreign governments, and massive book deals once leaving office. The status quo way of doing business is now broadly seen as enabling access perks and privilege for only the rich and well-connected.
With more political competition being driven by populist outsiders combined with far greater access to unfiltered information online, Americans of all ideological stripes appear ready to move on from entrenched establishment families. The reality or even just perceived reality of quid pro quo between long-tenured politicians and special interests carries a stench voters want eliminated.
Whether nostalgia and name recognition will be enough to carry Joe Biden to a second term remains to be seen. But the bigger picture suggests the sun is finally setting on prominent multi-generational political dynasties dominating national affairs in DC.