Joe Biden remains nominally the most powerful person in the world, but for some time now he has been fading away, spending his final months in the White House like a ghost — stiff, wan, often unseen by the public. It is a crushing end to his presidency. He had some remarkable achievements when it comes to the economy, but he couldn’t shape the narrative around his own record.
Much of that is because of the election. He thought of himself as a champion of the working class, as a son of Scranton whose dad and family taught him to respect hard work and working people. Their cares become his concern.
And yet: Biden will now be remembered as the champion of the working class who lost the support of the working class for his party. And he did so even though some of his achievements helped or will help working-class Americans. In politics, that is tragic; in Biden’s heart, I can imagine how it feels.
“Facts are stubborn things,” Biden said in a speech last month at the Brookings Institution, quoting former President Ronald Reagan, who in turn was quoting former President John Adams. It’s poignant when a Democratic president resorts to quoting a Republican one, especially Reagan, but Biden was still trying to make the case that his presidency should be seen as successful. Biden spoke about the more than 16 million new jobs created in the last four years, the progress against inflation.
I found myself thinking about the Shakespearean dimensions of Biden, a Lear-like figure trying to conjure a reality out of words when other people had moved on. Does anyone care what Biden is saying? I wondered. A president more sinned against than sinning.
I have to think it’s especially painful for Biden that his party’s defeat in the presidential election was due at least partly to voters’ disappointment with the economy. In reality, Biden’s handling of the economy was good, if not great.
The United States had the strongest economic growth in the Group of 7 wealthy, industrialized nations in 2023 and was projected to be No. 1 again in 2024, the International Monetary Fund projected in October.
Among the stubborn facts that Biden cited in his speech was that he presided over the lowest average unemployment rate of any presidential administration in the past half-century.
Biden acknowledged at Brookings that inflation surged early in his term. But he said, accurately, that his administration was “battling through worldwide effects of the pandemic, Putin’s war in Ukraine, and the supply chain disruptions.” And he pointed out that inflation had come back down close to 2 percent, which is the Federal Reserve’s target.
It has to be endlessly galling to Biden that many voters don’t see things that way. Last February, only 18 percent of voters in a New York Times/Siena College poll said Biden’s policies had helped them personally, vs. 40 percent who said Trump’s policies had helped them personally.
Lori Mosura, a 55-year-old woman in New Castle, Pa., told The Washington Post recently that she voted for Donald Trump instead of Biden’s vice president, Kamala Harris, because he “is more attuned to the needs of everyone instead of just the rich.”
Stubborn facts, it seems, are no match for stubborn perceptions.
In the long run, though, I think that history will judge Biden more favorably than voters did in November, especially on his handling of the economy.
Biden was initially seen as no more than a caretaker. He seemed to see himself that way, too: “I view myself as a bridge, not as anything else,” he stated during the 2020 campaign.
But he rose to the occasion of fighting the Covid pandemic and its economic effects. Although the recession was over by the time he was sworn in, the unemployment rate was still elevated at 6.4 percent. He had served as vice president during the feeble, “jobless” recovery from the recession of 2007-9, and he was determined to prevent a repeat of that slump.
Less than two months after taking office, Biden got Congress to pass the $1.9 trillion American Rescue Plan, which included stimulus checks of $1,400 per person, extended unemployment insurance and a beefed-up child tax credit. That November, Congress passed the Bipartisan Infrastructure Law, which authorized $1.2 trillion of transportation and infrastructure spending.
Those bills did what they were intended to do. They speeded the economic recovery and brought down unemployment, helping the poor and working class most of all. The expanded child tax credit alone cut child poverty nearly in half.
“If we hadn’t really provided that kind of support, G.D.P. would have been much smaller,” Cecilia Rouse, who was the chair of the White House Council of Economic Advisers, told The Times in an exit interview in 2023.
Unfortunately for Biden, what people remember most is that the stimulus contributed to the spike in inflation, which got as high as 9 percent in June 2022. The programs that passed in 2021 came on top of the $2.2 trillion CARES Act, which passed in 2020, when Trump was still in office. People had more money to spend, but less to spend it on because of the supply disruptions that Biden mentioned in his speech. The resulting excess of demand over supply drove up prices. It didn’t help that the Federal Reserve kept short-term rates near zero for too long.
That’s clear in hindsight. But it was far from obvious at the time that the stimulus was too much of a good thing. Professional forecasters unconnected with government were still predicting in October and November of 2021 that the Consumer Price Index inflation would be back down to 2.6 percent by the second quarter of 2022.
Even in January and February of 2022, with the stimulus fully enacted and inflation rising, the pros’ median forecast was for prices to rise just 3.8 percent in the fourth quarter of 2022 from the fourth quarter of 2021, according to a survey by the Federal Reserve Bank of Philadelphia. The actual increase, by my calculation: 7.1 percent.
While economists under-predicted inflation, consumers overreacted to it, as I have argued. As the election approached, voters were keenly sensitive to the higher prices they were paying, but seemed to shrug off the higher incomes they were earning, whether in wages or inflation-adjusted Social Security payments. In reality, according to Census Bureau data, median household income adjusted for inflation was 1.3 percent higher in 2023 than in 2020, Trump’s last year in office.
One last point on inflation, which politicians can’t mention but I can: It can be an economic shock absorber. Covid disrupted the economy badly, reducing the supply of some items and increasing demand for others. As I wrote last year, if the government had kept a cap on the overall price level, some prices and wages would have had to fall drastically to offset others that rose. Declines in prices and wages are extremely disruptive. Workers hate taking wage cuts. So employers probably would have cut jobs rather than pay.
Inflation allowed employers to impose stealth pay cuts — raises below the rate of inflation — that were more palatable, saving jobs and keeping the economy from spiraling downward.
That covers the Covid emergency. The other big part of Biden’s economic agenda was to strengthen the nation’s productive capacity, a strategy that his Treasury secretary, Janet Yellen, called “modern supply-side economics,” to contrast it with Reagan-era supply side economics that was mainly about cutting taxes and regulations.
In July of 2022, Congress passed the CHIPS and Science Act, which provided, among other things, about $53 billion for semiconductor research, development, manufacturing and work force development. The next month Congress also passed the Inflation Reduction Act, which despite its name had little to do with reducing inflation. Its main purpose was to build green energy projects to fight climate change. A year later, Biden called it “one of the biggest drivers of job and economic growth this country has ever seen.”
Biden was the first president to walk a picket line while in office. He fought corporate power by installing aggressive trustbusters in the Federal Trade Commission and the Justice Department. Under the Inflation Reduction Act, on behalf of Medicare recipients, his administration negotiated lower prices for 10 costly or common prescription drugs and got a cap on insulin prices.
Biden’s greatest flaw, like Lear’s, was his unwillingness to face a changing reality. He refused to drop out of the 2024 race until he had already damaged his party’s chances of keeping the White House. Even after a disastrous debate performance, he tried to brush off his obvious inadequacies as a candidate: “I just had a really bad cold.”
Whether you like the man or not, it’s hard not to see an element of tragedy in the arc of his political career. He achieved great things as president, but was then rejected by many of the people he worked hardest to help. Falling off a footstool isn’t tragic. Falling from a great height — that’s what’s tragic.
The Readers Write
Thanks for the hopes for 2025. Douglas Hofstadter has always been an idol of mine, since I have read his “Godel, Escher, Bach: An Eternal Golden Braid” more than once. My own wish for 2025: May we all exceed our dim expectations.
Stuart Schulman
Arlington, Mass.
Garrett Needham may be only 13 years old, but his response to your question about hopes for 2025 seems the wisest of all. He and his generation give me hope for the future.
Anne Patton
Crystal Lake, Ill.
You wrote that climate change is making homeownership even more unaffordable. If the federal government doesn’t subsidize home insurance, people may not move to the most vulnerable areas and then the economic problems will spread from those states to the rest of the economy.
Marty Cohn
Lakewood Ranch, Fla.
I agree that electric cars shouldn’t be luxuries. One idea, which I’m exploring with our local electric utility, would be for the utility to pre-purchase the car battery for recovery when its auto-related functionality is used up, effectively reducing the upfront cost to the buyer. At the point of replacement, the battery still has useful life if wired together with other recovered batteries and used as an energy storage bank by the utility.
Angus Duncan
Portland, Ore.
The writer is a consultant to the Natural Resources Defense Council.
Quote of the Day
“Social insects are still ruled rigidly by instinct, and they will remain so forever. Humans have intelligence and swiftly evolving cultures. We have the potential for self-understanding and can find a way to curb our self-destructive conflicts.”
— Bert Holldobler and E.O. Wilson, “The Superorganism: The Beauty, Elegance and Strangeness of Insect Societies” (2008)
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