A question arose out of President Jimmy Carter and President Ronald Reagan’s 1980 debate that continues to come up in most federal elections yet today. It is “Are you better off than you were four years ago?” Reagan used unemployment and inflation to chop President Carter off at the knees and swooped in for the presidency.
So why are Republicans not asking that old question? The answer is simple according to Robert J. Shapiro in The Washington Monthly:
‘Based on jobs, incomes, wealth, poverty, and health insurance, Americans are better off today, including inflation.’
According to his Twitter page, the article’s author Robert J. Shapiro has the bona fides to back up his assertions:
‘Chairman of economic advisory firm Sonecon, IMF advisor, former U.S. Under Secretary of Commerce. Blogs at the intersection of politics and the global economy.’
To date, Shapiro believes that President Joe Biden has an astonishingly high record:
- ‘[M]ore than 9.5 million unemployed Americans found jobs over the past 18 months
- [U]employment rate fell from 6.4 to 3.5 percent.’
- ‘[R]ecord low poverty
- [R]ecord health insurance coverage—not to mention
- [W]ealth gains and wage and salary gains that kept up with inflation.’
The next question that usually arises is whether people’s income is higher. That was when the answer got complicated. First of all, the last time there was a pandemic such as the COVID pandemic was about 100 years ago. And it wrecked havoc upon our economy. The Gross Domestic Project fell through the roof in 2020. Unemployment rose dramatically.
That was when President Biden spent the big bucks to help individuals recover. Then as if a pandemic was not enough, the president faced supply chain problems. This is how it unfolded:
‘But supply problems, especially energy, ignited inflation, and spending, worsened it. While the fast-rising employment has produced a record 14.9 percent surge in overall wage and salary income since Biden took office, how much has inflation eaten away at those unparalleled gains?’
American tend to vote depending upon “pain at the pump” and pain at the grocery store. Thus far, salaries have nearly caught up with inflation. So, voters can say:
‘[M]ost Americans are much better off than before the pandemic hit in 2020, and before he took office in 2021.’
Were it not for the pandemic and related issues, inflation would be “modest” Shapiro said. And were it not for inflation numbers:
‘Biden would have one of the best records of any postwar president.’
Shapiro looked into the numbers around incomes and found Americans earned 14.9 percent more in 2022 than in January 2021 plus 16.6 percent more than in February 2020, which was just before the pandemic:
‘The Bureau of Economic Analysis at the Department of Commerce provides the best data on the nation’s earnings. It reports that before adjusting for inflation, Americans earned $11,346 billion in wages and salaries in June 2022, a 14.9 percent jump from $9,872 billion in January 2021 and 16.6 percent more than the $9,734 billion total in February 2020, just before the pandemic.’
He also claimed this is “simple.” Shapiro pegged the “average working American’s income at $74,643. In January 2021 that number was $74,624, and in February 2020 it was $70,274.
Just prior to the pandemic, individuals earned 6.2 percent more even considering inflation. So to answer President Reagan’s question:
‘“Yes” on wages and salaries as well as jobs, a remarkable achievement given the pandemic.’
The checks that President Biden sent to all Americans allowed some of the voters to save more. That moved unemployment numbers up, too. But get this, the Federal Reserve, wrote:
‘[A]fter inflation the net assets of Americans increased by nearly $2 trillion from the first quarter of 2021—when Biden took office—to the first quarter of 2022. (We exclude the top 1 percent because their assets are notoriously hard to measure.)’
The author continued, referring to the Consumer Price Index (CPI):
‘So, take account of inflation’s impact by applying the BEA’s deflator for personal consumption expenditures, a better inflation measure than the Consumer Price Index (CPI).’
‘Using that deflator raises the original wage and salary total, now expressed in June 2022 dollars, to $10,673 billion for January 2021 and $10,717 billion for February 2020. Finally, divide the three results by the number of people earning wages and salaries on each date.’‘
And President Biden’s reconstituted Inflation Reduction Act kicks off whole new sets of opportunities for employees and their families.
Featured image is a screenshot via YouTube.
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