Was the "Economy" Really Doing So Well Under Biden?

Before and after the recent election Establishment commentators claimed that the U.S. economy was performing splendidly, insisting that inflation is falling, unemployment low, growth robust, and the stock market "booming." Yet anyone with a scintilla of understanding of these matters knows how all of this can have nothing whatsoever to do with the actual condition of the vast majority of the country, and how it has rightly become cynical about them. The official inflation numbers have long been suspect in the eyes of the public--with the same going for unemployment. (Consider how before the pandemic we had many years of "full employment" that were on close inspection anything but.) "Growth," which is automatically overstated whenever inflation is understated, has long been a matter of paper profits in an ever-more hollowed-out economy, with the same going for the stock market, the dubious benefits of all of which accrue to the super-rich and not working people, whose disadvantage is often registered in a rising Dow Jones Average. (A company announces layoffs, and its stock will rise high. The Bureau of Labor Statistics tells us that hiring is slow, and the Average shoots up.)

Certainly it ignores the way that the long-term decline in the ability of working people to afford the essentials of life, like housing, has continued painfully these past years. Back in the 1960s the median-priced home went for the equivalent of three to four years of the median male income. By the 2010s it was more like seven to eight years, and in 2022 it hit nine years. Only a complete idiot would characterize this as a situation bespeaking unexampled prosperity for the public, the more in as the trend has been similar with other essentials, from the price of a car (used as well as new), to the price of health insurance, to the price of college tuition. It does not sweeten the deal that those supposedly enjoying this era of "low unemployment" have experienced it as an era of high underemployment, not least for college graduates, with, contrary to the STEM fetishists and those sneering at the victims of the student debt racket who love painting its sufferers as fools who got "useless" humanities degrees (the number of these has in fact fallen sharply in recent years), the underemployed very frequently people with "practical," occupationally-oriented degrees. (Did you know that a year after graduation 1 in 4 engineering majors lacks employment in their field, and the picture just gets worse from there? Indeed, the practical business major is no better off than the humanities degree holders.)

It ignores, too, the fact that, as Michael Roberts has explained, "[t]he headline GDP [Gross Domestic Product growth] rate" that is the basis for the talk of robust growth, "is driven by healthcare services, which really measure the rising cost of health insurance," with a little help from those extra defense outlays for the wars being waged abroad (hardly the form of consumption Americans equate with higher living standards!)--all as inventories of unsold goods are piling up, with the last fact the easier to understand when one remembers that, as Ruchir Sharma admitted in the Financial Times the day before the election, the gap between the spending of the top 20 percent and bottom 20 percent has become "the widest . . . on record," the richest consumers spending, the others having less and less leeway to do so given all the ways in which they are hard-pressed--and of course, not getting any relief from the rising stock prices, because they do not own stock.

Still, for all that the talking heads have persisted in telling the public "You've never had it so good"--and afterward, apparently not caring in the slightest that the public disbelieved what they have to say not because it was deluded, but because it was less deluded than the "experts" for whom centrists so snarlingly demand absolute deference . Of course, considering the experts as deluded one is left with the problem of determining in just which way they happened to be so deluded--whether they were deluded about what the public could be got to believe about the economy, or deluded about the state of the economy itself. The second possibility cannot be ruled out--or the dangers associated with that slighted.