"Wages for workers are up!”
That was the sunny news delivered by President Biden at a recent campaign stop. Is it true? Not really. Though real wages have finally trended slightly higher, Americans are still underwater since Biden entered the Oval Office.
The Biden camp may have dropped talking up “Bidenomics,” but the spiel’s half-truths and tone deafness live on.
The Biden reelection campaign is still trying to sell its economic policies to skeptical voters, even as a recent Wall Street Journal shows that “Only 23% of voters say Biden’s policies have helped them personally, while 53% say they have been hurt by the president’s agenda.” Biden’s pitch hasn’t worked, isn’t working and won’t work. But, they aren’t giving up.
Joe Biden is unhappy about his poll numbers — as well he should be. They are historically terrible; the only person those low grades could possibly please is Jimmy Carter, who no longer sets the benchmark for most unpopular president ever. According to Real Clear Politics, Biden’s average approval rating across all polls stands at 40.5 percent; that compares with 44.5 percent for Donald Trump at the same point in his presidency, 46.5 percent for Barack Obama and 58 percent for George W. Bush.
Biden apparently laid into his team before Thanksgiving, demanding his aides do something to improve his standing. The upshot is yet another salvo from the White House about the wonders of Bidenomics, including the usual rewriting of history about what a catastrophe Joe Biden faced as he took office in January 2021.
In a campaign event just recently, Biden claimed, “You know, when we started, the … economy was reeling.” White House spokesperson Karine Jean-Pierre reiterated that myth in a briefing a few days ago, saying the economy “was in a tailspin.” It was not; in the quarter he took office, the recovering economy grew 6 percent, unemployment was dropping sharply and annualized inflation stood at 1.4 percent.
The president’s pitch rests largely on dishonest or misleading data, as is the case when Jean-Pierre touts the number of new business start-ups and applications as a sign that Bidenomics is working. As it happens, there was a big surge in new business applications — during Donald Trump’s presidency.
When Trump took office, in January 2017, monthly new business applications totaled 263,878; in December 2020, his last month, applications — at the height of the COVID panic — amounted to 349,734, an increase of 32.5 percent. So far in Joe Biden’s presidency, applications have actually dropped slightly, from 486,082 recorded in January 2021 to 464,838 last month.
The numbers bounce around on a monthly basis, to be sure, but if we look at the annual totals, the gains under Trump also outpace those made so far during Biden’s presidency. In 2020, Trump’s last year in the Oval Office, applications were 4.4 million, up 47 percent over the 3 million secured in 2016. This year, assuming December holds to last month’s level, applications have increased to 5.5 million, 37.5 percent ahead of Trump’s last year.
Another of Biden’s claims that should be taken out in the dustbin is that price gouging by corporations is the root cause of inflation. Corporate profits have been essentially flat for the last seven quarters. If businesses were jacking up prices to take advantage of consumers, we would surely see some evidence in the way of surging profits. We have not. Instead, we have seen companies raising prices, to be sure, in order to maintain margins and offsets costs.
Consider the trend in profit margins. In April 2021, before inflation took off, profit margins overall from U.S. companies were about 10.6 percent after tax; as costs and inflation rose, margins were squeezed, dropping to 8.7 percent at the beginning of this year. Since then, as companies have cut costs and raised prices, margins have recovered to 9.8 percent, slightly above the long-term average of 9.35 percent.
Team Biden also boasts that he’s lowering prescription drug prices for seniors. What about people who are not on Medicare? Are their drug prices going down, too? Not at all. The CPI report for November shows prescription drug prices jumped 3.8 percent over the prior year, worse than the 3.1 percent increase in prices overall. The White House may be forcing through price cuts on some medications bought or reimbursed by the federal government, but the pharmaceutical companies will make up those losses elsewhere, and indeed they are.
Biden also boasts of “creating” millions of manufacturing jobs, but that’s not true either. The number of Americans engaged in manufacturing has barely budged since the final month of 2019, before COVID shut down much of the economy. He also says his administration is bringing down energy costs — another whopper, as electricity bills have soared 24 percent since Biden took office, after drifting slightly lower under Trump.
If President Biden wants his approval ratings to climb, he might try being honest with voters. Don’t tell them things are rosy when the average American household has to lay out an extra $11,434 per year to maintain their January 2021 standard of living.
Americans are not stupid; they know the country’s growth is being fueled to a dangerous degree by enormous government spending, leading to unsustainable budget deficits and inflation. Perhaps, instead of more handouts aimed at disaffected voting groups — like student loan cancellations — the president might tell us how we’re going to get out of the fix we’re in.
At the least, stop banging away on tired talking points that are simply not true.
Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.
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