The achievements of Bidenomics should not be obscured by an inflation problem that derives largely from forces beyond the president’s control, writes EricLevitz
Photo: Doug Mills/The New York Times/Bloomberg via Getty Images Consumer prices are high and rising, and so is disapproval of Joe Biden. In recent days, the president’s net-favorability rating has hit new lows in FiveThirtyEight’s aggregation of polls. Meanwhile, America’s headlines are full of testaments to economic discontent. By all appearances, Biden is suffering blowback from grave failures of economic management.
Answers to these questions tend to be intertwined. Those who believe that business owners and high-earners are entitled to every cent of their market incomes – and thus, that taxation is akin to theft – also tend to believe that tax cuts on the wealthy will increase productive investment, and thus, societal prosperity. That latter claim has been especially integral to Republican orthodoxy.
From these two premises, a third follows naturally: Public spending does not “crowd out” private investment, as bipartisan orthodoxy long held, but can actually catalyze it. This is because progressive fiscal policy increases consumer demand. Working people have a greater propensity to spend their income than the rich do.
Enacting a $2 trillion relief package in that context was a very different proposition than doing so a year earlier.
Workers secured more income and economic power. Wages are rising faster for laborers in the bottom quartile of the income distribution than for those in the top quartile. Americans are quitting jobs at an unprecedented rate, confident in their capacity to find new and more-remunerative employment opportunities.
To be sure, the boom in business investment cannot be credited to Biden’s policies alone, not least because it began in summer 2020. Yet the development’s Trump-era start date doesn’t actually make it less validating for Bidenomics, broadly defined. After all, the CARES Act was itself a fiscal policy that increased working-class purchasing power through deficit spending.
For these reasons, conservative readers will surely take exception to the idea that Bidenomics has been vindicated and Republican critiques of it discredited. After all, haven’t conservatives always warned that fiscal liberalism leads to ruinous inflation? And is that not what the American people are complaining of to any pollster who’ll ask?
Graphic: @JWMason1/Twitter This said, today’s elevated prices cannot be blamed on Bidenomics alone. The ARP may have increased Americans’ purchasing power, but it did not encourage consumers to devote an unprecedented share of their spending to goods instead of services. The COVID pandemic did that. And consumers’ overwhelming preference for goods is a large part of the inflation problem.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
The Great Resignation Is In Full Swing, Because No Sh*tThe Great Resignation Is In Full Swing, Because No Sh*t “Everywhere you look, you see ‘help wanted’ signs and business owners complaining that they’re severely understaffed.”
Read more »
Selena Gomez and Coldplay\u2019s \u2018Let Somebody Go\u2019 Has Brutal Lyrics About HeartbreakSelena Gomez and Coldplay's ‘Let Somebody Go’ Has Brutal Lyrics About Heartbreak
Read more »
Dave Chappelle Says He's Willing To Talk With The Transgender Community But He Won't Be 'Summoned''I am not bending to anybody’s demands.'
Read more »
Selena Gomez and Coldplay\u2019s \u2018Let Somebody Go\u2019 Has Brutal Lyrics About HeartbreakSelena Gomez and Coldplay's ‘Let Somebody Go’ Has Brutal Lyrics About Heartbreak
Read more »