The status of the United States economy looms large as one of the most important personal and political issues before the 2022 elections. The perception of the economy will play a significant role in determining who will represent us in Congress. Unfortunately, much of our perception is based on mythology, misinformation, and lies to our detriment, promoted by the Republican Party and compliant media.
Despite the record economic performance and recovery achieved during the first 12 months of the Biden administration, the media is myopically focused on inflation while, at the same time, Republicans are doing everything in their power to ensure that the authentic problems posed by inflation and supply chain delays persist through the next election cycle. They didn’t have any plan or strategy to address these problems. This is nothing new, the perception that Republicans are more successful at managing the economy has been with us for decades, and nothing could be further from the truth. The facts do not support that contention.
Gross Domestic Product (GDP) is a measure that gives us information about the size of the economy and how an economy is performing. It is the monetary value of goods and services produced. In other words, it’s an indicator of how healthy an economy is. The Bureau of Economic Analysis (BEA) research establishes that since 1930, 16 of the 20 years with the highest GDP growth have been achieved with a Democratic presidency. There was a Republican presidency in the four years, three years had a Democratic House and Senate, and only one had a Republican Senate. That screams, “danger Will Robinson” for any expectation of economic prosperity with a Republican-dominated government.
A review of BEA analysis shows that over the past 46 years, Democratic presidents have significantly outperformed Republican presidents when increasing GDP. GDP increased over 200 percent for Democratic administrations, while GDP increased approximately 55 percent during Republican presidencies. The gross domestic product under the first year of the Biden administration grew at a rate of 5.7 percent, which represents the most substantial growth in GDP in nearly 40 years.
Unemployment statistics are another universally recognized measure to determine the health of an economy, and a comparison of unemployment levels between Democratic and Republican presidents is a “blowout.” Bureau Labor Statistics (BLS) shows that since 1945 each party has held the presidency for an equal number of years, and the results are embarrassing. The unemployment rate has risen 11.8 percent under Republican presidents, but the rate has dropped 7.2 percent under Democratic presidents. It is important to note that often Democratic presidents have had to clean up behind Republican catastrophes, The Great Depression, the Great Recession, and COVID-19. Democratic presidents have been like the guy whose job is to clean up behind the elephants at the circus. The Biden administration has guided and overseen a drop in the unemployment rate from 6.2 percent to 3.9 percent in their first year. The most significant single-year reduction in history.
On a personal level, a crucial measure for adult Americans is whether they are not only employed but also whether they are gainfully employed. Before I go on, I readily acknowledge that both Democrats and Republicans need to do a much more effective job on the gainfully employed part, sustainable wages, and benefits. Still, the difference between Democratic and Republican performance has been significant. Of the last 12 presidents before the Trump administration, BLS statistics show six of the eight best monthly job creation averages belong to Democratic presidents. The worst four are all Republican presidents. One, George W. Bush had a negative job creation rate. The Biden administration has created more than 6.6 million jobs in its first year. This is the most substantial record of any president’s first year in office.
A review of presidential data for income and wealth is problematic for both parties. The income disparity between the wealthiest Americans and the overwhelming majority of Americans is approaching “Gilded Age” levels. Still, if we compare the relative performance between the two parties circa 1980, you’ll find again that Democratic presidents have performed much better (census data updated March 2016). It shows that for the first 60 percentile, the average income growth was .46percent per year, while under Republican presidents, the income growth rate for the same group was – .17 percent annually. Democratic presidents’ efforts have resulted in annual Income increases for all income categories, including the highest growth for the top 20 percent earners, 1.68 percent.
I’ll give you another example of how neither party has anything to crow about regarding income growth. The number for the 60th percentile of Americans is anemic. Since 1980 households that earn between $11,651 and $105,910 have all lost income if you distribute income in March 2016 the same way it was distributed in 1980, before supply-side economics. Guess where that money was distributed? It went to the people that made between $336,765 to $24,918,251 in 1980.
An even more graphic depiction of the growing income disparity is that the bottom 90 percent of earners saw a decline of 5 percent in their income. The bottom 9/10 of the top 1 percent saw their income increase by 183 percent, just over $3 million a year.
Between 1980 and 2012, the shared wealth held by 90 percent of Americans was 32.9 percent. By 2012 it had shrunk to 22.8 percent. In contrast, the top .01 percent quadrupled their share from 2.8 percent to 11.2 percent of the wealth in the United States.
Notwithstanding my criticism of both parties regarding income and wealth growth distributions, the Biden administration can claim credit for policies and leadership that have resulted in wage increases of 5.7 percent in their first year. The bad news is that rising inflation has canceled out those gains. The Republican Party and two Democratic senators have obstructed Policies and efforts to get inflation under control. At the root of these inflationary costs are increased energy costs which are in large part fueled by industry avarice. At the same time, households are struggling with gasoline and energy bills, and oil companies are recording record profits of billions of dollars. The American Rescue Plan also lowered child poverty by 50 percent, but those gains have been reversed due to Republican Senators’ obstruction inaction and the obstinance of two Democratic Senators, Manchin, and Sinema.
A Bloomberg survey of more than 80 economists (performed by Matthew A. Winkler-Editor in Chief Emeritus of Bloomberg News) shows that in the first 12 months of the Biden administration, the U.S. economic performance has resulted in the first- or second-best performance among ten key economic measures dating back to President Carter, (1976).
Gross Domestic Product (1)
Profit Growth (1)
S&P Performance (2)
Consumer Credit (1)
Non-Farm Payrolls (2)
Manufacturing Jobs (2)
Business Productivity (2)
Dollar Appreciation (2)
S&P 500 Relative Performance (2)
The article does cite the relative weakness of Per Capita Disposable Income under Biden, which rose only 1.08 percent during his first year. Improvement in this area and others will depend primarily on the results of the 2022 congressional elections. The historical record reflects that the transfer of power in Congress to the Republicans will result in a doomsday scenario for our economy and most Americans.
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