Politics

White House Claims ‘Bidenomics Is Working’ Despite High Inflation, Stagnating Wages

No featured image available

• President Joe Biden’s administration released a memo Monday claiming that it’s economic strategy, known as “Bidenomics,” is working.
• Economists told the Daily Caller News Foundation that the plan contributes to stagnating wages and high inflation.
• “The big takeaway from this proposal is that the president hasn’t learned his lesson that spending increases inflation,” E.J. Antoni, research fellow for Regional Economics at the Heritage Foundation’s Center for Data Analysis, told the DCNF.

President Joe Biden’s administration released a memo Monday claiming that “Bidenomics” was working despite stagnating wages and high inflation, economists told the Daily Caller News Foundation.

The Biden administration announced Monday that it would spend more than $40 billion to invest in “high-speed internet” across the country and boasted that its economic strategy, referred to as “Bidenomics,” is “delivering results,” according to the memo.  While the memo stated that there is “clear and compelling evidence” to support “Bidenomics,” economists told the Daily Caller News Foundation that it would stir inflation and contribute to stagnating wages.

“The tagline for Bidenomics – ‘growing the economy from the middle out and the bottom up, not the top-down’ – is simply a rephrasing of a standard political myth,” Peter C. Earle, an economist with the American Institute for Economic Research, told the DCNF. “It implicitly assumes that economies are sophisticated machines that can be expertly steered to generate certain specific outcomes. If that were the case, why would the current inflation fight be taking so long?”

Inflation remains elevated at 4% as of May 2023, according to The Wall Street Journal. E.J. Antoni, research fellow for Regional Economics at the Heritage Foundation’s Center for Data Analysis, told the DCNF that “the biggest takeaway” from the administration’s proposal “is that the president hasn’t learned his lesson that spending increases inflation.”

“The [Consumer Price Index] is used to adjust the nominal earnings, and that’s how we get real earnings. That’s why the average family has seen their weekly paychecks go up $200 under Biden, but they can buy about $100 less,” he told the DCNF. “The annualized amount comes to $5,600.”

Biden signed the Inflation Reduction Act into law in August 2022, which will spend hundreds of billions of dollars that will affect healthcare, climate and prescription drug policies. A Penn Wharton budget model of the bill said it “would very slightly increase inflation until 2024 and decrease inflation thereafter.”

“The only breathing room he’s giving them is underwater,” Antoni told the DCNF.

Two-thirds of Americans said that their wages have not kept up with inflation, according to a CNBC All-America Economic Survey released in April. Recently revised estimates for Bureau of Labor Statistics data on real wages in the fourth quarter of 2022 revealed that they had declined.

Real weekly income, which measures the inflation adjusted weekly income for Americans, has been falling since Biden took office, according to data gathered by YCharts from the Bureau of Labor Statistics.

Latest from Dallas Fed: declines in loan demand and volume accelerate in 2nd half Q2; nonperforming loans growing faster across all types, esp. commercial; outlook worsens; this report is consistent with heading into #recession… pic.twitter.com/zbxO7Ae2H9

— EJ Antoni (@RealEJAntoni) June 26, 2023

“I’m not sure where the Biden administration is getting their statistics,” Antoni told the DCNF

Additionally, the memo states that “the share of working-age Americans in the workforce is now higher than at any time in more than 15 years,” to which Earle told the DCNF is “probably the most baldfaced lie, among many, of this Presidential term.”

“Lockdowns, stay-at-home orders, and other pandemic policies created an artificial recession in 2020, and the US labor market has been slowly recovering for the three years since then,” Earle continued.

“For more on ‘Bidenomics,’ contact me early next year when the U.S. enters a recession,” Steve H. Hanke, professor of applied economics at the Johns Hopkins University who served on President Ronald Reagan’s Council of Economic Advisers, told the DCNF.

The White House did not immediately respond to a request for comment from the DCNF.