Yesterday President Biden was in Chicago touting the virtues of his economy policy. He has embraced the neologism “Bidenomics” in describing it. The editors of the Wall Street Journal, predictably, are unimpressed:
In 1982-84 dollars, which takes account of inflation, average hourly earnings were $11.39 when Mr. Biden took office but started to decline immediately and didn’t stop falling until inflation peaked in June 2022. They have bounced up a little but were still back only to $11.03 in May. That’s a 3.16% decline in real earnings for the average worker across the 29 months of the Biden Presidency.
These are official Labor Department statistics. Mr. Biden can’t deny them, so he had someone fudge the point by writing in his Chicago remarks that, “Look, pay for low-wage workers has grown at the fastest pace in over two decades.†We’d like to see how his economists cherry-picked the data to justify that one.
All of which reminds us of the old Marx Brothers joke: Who are you going to believe, me or your own eyes? Regarding Bidenomics, Americans should believe their own eyes.
Much of what has happened over the last several years was predicted by Keynesian economics. When you increase aggregate demand by sending out checks, for example, beyond aggregate supply, you would expect it to result in inflation. The sad fact is that we do not produce enough of what we supply. There is no longer any surplus supply.
Clearly, Bidenomics isn’t Keynesian economics. It also isn’t Modern Monetary Theory which would have predicted the same thing. It’s old fashioned pork barrel politics. I will leave it as an exercise for the interested student to figure out where the pork is going. It isn’t to aid the poor. You can’t help the poor by giving them a check for $5 while increasing the prices of the things they spend money on by $10.
The central planning component of Bidenomics comes with fine print. In the short term it is hypothetically possible for central planning to increase production. It is more likely and certain in the long term to produce deadweight loss.
As I am sure you are aware, inflation is pretty much a universal first world problem, and it’s actually less here than many other countries. What’s the unifying explanation if any exists?
Also, link goes to chart showing variation in mediation wages for US workers. There are actually a lot of ups and downs. Note that there were larger drops in the aughts. However, there weren’t front page discussions everyday about inflation so no one seemed to care.
https://www.statista.com/statistics/185369/median-hourly-earnings-of-wage-and-salary-workers/#:~:text=U.S.%20workers%20median%20hourly%20inflation%20adjusted%20earnings1979%2D2021&text=In%202021%2C%20the%20usual%20median,the%20U.S.%20was%2015.52%20dollars.
I know that you think the WSJ is without bias but why did they choose to use 1980s dollars. Pretty easy to find the numbers in 2021 dollars like Statista does.
Steve
“I know that you think the WSJ is without bias but why did they choose to use 1980s dollars. ”
That’s a red herring.
“What’s the unifying explanation if any exists?”
They all have pursued similar policies. They stupidly shut down their production bases. They all monetized their profligate spending sprees.
“However, there weren’t front page discussions everyday about inflation so no one seemed to care.”
Seriously? Are you trying to make the case that inflation has been an illusion? Do you eat food? Been to the grocery store lately.
I know you are a partisan hack, steve, who will attempt to justify any and all Democrat’s actions, but your comment is bizarre.
Just to clarify my view, I think that WSJ’s news coverage is non-biased. I think it’s opinion page has a primarily pro-business bias. Some of its columnists have pro-Republican biases.
Compare that with the NYT at which both its news coverage and opinions have a distinct leftward lean, its opinion section being far left. Both the WaPo’s news and opinion coverage have slight leftward leans.
On the right the Washington Times has a slight rightward lean in its news coverage and a stronger rightward lean in its opinion section. But the WT is tiny in its reach compared to the NYT.
In terms of bias comparing the WSJ with the NYT or WaPo is really baffling. The only explanation for a claim of extreme partisanship on the part of the WSJ is if you take the position that anything that’s not definitely leftwing is definitionally rightwing.
Are you sure you were an engineer? All emotion on your part. Anyway, not what I said. I actually looked at numbers other than those chosen by the WSJ. Note that from 2003-2013 median wage of the American worker dropped from $16.03 to $15.13. That’s a much larger drop than this current one (%5.61). Where were the WSJ editorials bemoaning the drop in wages? Where your complaints? I think Dave might have mentioned it occasionally.
So take a stab it. Why should we not care about wages falling in some situations and care a lot in others? Why specifically do we only get daily coverage and editorials when it’s in an inflationary environment but we ignore it when inflation is low?
Going through the OECD country by country it appears that they all provided some aid package for covid. The US appears to have less inflation than most of those countries. Why is that?
Also, I still find it odd that when evaluating an economy that we should look at only one variable. I understand that it’s something that affects everyone more visibly than other parameters but those other numbers matter too.
Dave- I agree that its news coverage is good. Its editorials/opinon page is not.
Steve
“ I know that you think the WSJ is without bias but why did they choose to use 1980s dollars. Pretty easy to find the numbers in 2021 dollars like Statista does.â€
Those are the dates used by the BLS. The WSJ didn’t choose them.