The Republic of Ireland and Northern Ireland share an idyllic island located in the North Atlantic Ocean. On a recent visit there, I was struck by the breath-taking vistas, the lush green fields with meandering dry-stone walls, and of course, the friendly people with their vibrant culture and collective storied history. Part of that history includes the Great Famine which began in 1845 when potatoes, the main stay of commoners’ diets, became infected with blight. The devastation of this major crop caused the starvation deaths of over one million people and forced another million to emigrate to find a better life. The economy continued to suffer, forcing another million people to emigrate. The population of Ireland has never fully recovered, despite recent tax incentives to draw multinational companies to headquarter there.
The economy is a major factor in the quality of life in any country. But how important is the economy as a voting issue? In the 1992 presidential campaign of Bill Clinton, although there were other issues, it all came down to the economy. The phrase “It’s the economy, stupid” was coined to drive this point home. It seemed that regardless of other political issues and policies, how one’s personal finances were impacted certainly influenced how one voted. Is the most important issue to voters still the economy?
In recent polling, the economy is top of mind for many voters, especially if they vote Republican. Inflation and immigration seem to be the top two issues for the GOP, with Trump at the recent Republican National Convention erroneously stating, “We’ve suffered the worst inflation we’ve ever had.” The current inflation rate of 3% is significantly down from its recent peak in June, 2022, of 9.1%. Contrary to Trump’s claim, historically, the inflation rate has often been as much as 9%, and higher, like 18% in 1946 and 13% in 1979.
Regardless of party affiliation, there seems to be a real disconnect between the actual economy and voters’ perceptions of it. Historically, political party affiliation influences voter perceptions. In today’s polarized political environment, the distance between reality and perception is even wider than in the past.
Where one sits in the economic spectrum obviously plays a major role in perceptions of the economy. What state you live in and the economies of your state and local area will also impact you directly and influence your perceptions. But the reality is, the US economy is doing remarkably well, much better than most people realize. While the public may be pessimistic, the economy is actually very strong.
According to the Washington Post on July 22, “[t]he United States has the world’s best economic recovery from the pandemic: consumer spending has been high; more Americans are employed than in half a century; and wages have grown to help keep up with inflation.”
Inflation has fallen to a reasonable level of 3% for the last 12 months as of June and fell faster in the US than in other economically developed countries. Unemployment has been trending the lowest in 50 years; it is currently at 4%. Paychecks are also up, with overall wages rising faster than inflation. The stock market, a leading indicator of the economy, is enjoying significant growth, with the S&P 500 Index breaking record highs more than 30 times so far this year. The Gross Domestic Product (GDP), a barometer of a nation’s productivity, is up for the past three consecutive years under the current administration.
The Biden-Harris administration has done much to improve the economy as well as individual lives. It has often not received the credit due for its accomplishments. There are Republican lawmakers who voted against President Biden’s policies who are now taking credit for these policies as if they were their own ideas! Even Donald Trump falsely took credit in the presidential debate in June for capping insulin costs under Medicare at $35, something that President Joe Biden accomplished in 2022 with the Inflation Reduction Act. Obviously, false information abounds in this election season and it behooves each of us to understand the facts.
The Biden-Harris administration’s economic plan, often dubbed “Bidenomics,” promotes government investment to repair aging infrastructure, create clean energy, and increase domestic manufacturing jobs. It boosts the middle class by encouraging labor unions, lowering healthcare prices, and forgiving student debt. This economic policy promotes business competition while increasing taxes on corporations and the wealthy. It basically builds the economy from the bottom up and the middle out. It is the opposite of Reaganomics which promotes corporations and the wealthy with the hopes that their success will trickle down to the lowest workers. It does not. The past 40 years have proven Reaganomics to be disastrous to the wealth gap with the rich getting richer and the middle class and the poor getting poorer.
Bidenomics, on the other hand, has an exceptional track record. Laws promoted by the Biden-Harris administration and passed by Congress have propelled the economy out of a pandemic slog and kept the US from experiencing the much-feared and frequently prophesied recession.
For example, the American Rescue Plan of 2021 mitigated effects of the pandemic by providing Covid-19 vaccines and tests, direct payments to struggling families, and funds to state, local, and Tribal governments, among other things.
The Bipartisan Infrastructure Law of 2021 authorized funding to repair aging infrastructure, provide clean drinking water and affordable high-speed internet, and create a network of electric charging stations.
Among the many provisions of the Inflation Reduction Act of 2022 is the provision of tax credits for energy efficient home improvements, the creation of millions of new jobs in clean energy, and the negotiation of Medicare drug prices. The law also addresses the budget deficit by creating a minimum corporate tax rate of 15% and providing funds for the Internal Revenue Service to use to collect taxes currently evaded by the wealthy. As of July 11, the IRS collected more than $1 billion in past-due taxes with that additional funding. Note that no Republican in Congress voted to pass this law.
The CHIPS and Science Act of 2022 was passed to provide funding for domestic manufacturing of computer chips which will create new jobs, and funding for artificial intelligence as well as other tech and science endeavors.
President Biden has implemented dozens of executive orders, notably one to provide more robust anti-trust law enforcement to encourage economic competition between American companies, thus providing competitive pricing for consumers. Another one provides federal funds to enhance states’ Medicaid programs. Other executive actions have canceled $168 billion in student debt for 4.8 million borrowers.
The accomplishments of the Biden-Harris administration are staggering. And these achievements should be taken into consideration during this election season. On the campaign trail, the question often asked is whether you were better off economically under the Trump administration from 2017-2020 or the current Biden-Harris administration. While we should consider the past under Trump and the present under Biden, the question should be reframed to compare each campaign’s economic platform for the future.
Sixteen Nobel Prize-winning economists unanimously agree that the Biden-Harris economic plan is “vastly superior” to Trump’s plan and according to them, the US economy will be significantly worse off under a new Trump administration. They specifically say that the stock market will fall, the economy will destabilize and decline into a recession, and that the tariffs Trump proposes on imports (10% on all imports, 60% on imports from China) will be paid by the American people when purchasing imported goods, with the average middle-class family paying $1,700 per year. It will be another form of taxation. Trump’s tax cuts in 2017 added $2.2 trillion to the national debt (over a 10-year period) and will continue to add $4.6 trillion to the debt over the next 10 years if renewed in 2025 when these tax cuts are set to expire.
I would add that Trump’s plan to round up over 11 million illegal immigrants and put them into detention camps before deporting them will also devastate the economy, as this will cost billions of dollars and take up to 20 years to accomplish. It will decrease the supply of labor and decrease revenues to Social Security and Medicare, programs to which illegal immigrants pay into but from which they do not receive benefits. But of course, the human cost is incalculable: 80% of illegal immigrants have been in the US for more than a decade; over one million are married to US citizens and many have children who are US citizens. Separating family members and destroying their lives and livelihoods is unfathomable. Sending them back to the violent circumstances from which many of them fled is unconscionable and in some cases, their native countries will not actually allow them to return.
“It’s the economy, stupid” may still be true in that the US economy is an important issue to many voters. In today’s polarized political landscape, perhaps perceptions of the economy are even more important to winning votes. But reality matters. Messaging is key. President Biden and the Harris campaign need to take credit for all the good economic policies their administration has implemented. Their work rivals that of the New Deal under Franklin Delano Roosevelt, who took a stand for the American people against big business and put into motion policies that would grow the middle class and provide a safety net for both the poor and retirees. Someday, when we look back in the rear-view mirror, the reality of Bidenomics will be evident. But in the meantime, let’s just hope the fog clears before November.
NOTE: I have written, edited, and updated this post over the course of July as new data has emerged. Today is Monday, Augusts 5. As I schedule this post, stock markets around the world are having a terrible day! Stock markets always go up and down. They are often driven by two emotions: fear and greed. Today we see both in action. Some investors have used the cheaper Japanese yen to buy up tech and AI stocks to increase their gains, but at greater risks. Last week, Japan increased its historically low interest rates to a higher level, causing those investors using the yen to panic. Investors were already getting jittery over mega tech companies’ investments in AI which have not yet started to pay off. So today, we are seeing fear feed on itself and multiply to the greater investment community as these huge tech companies’ drop in value drag down the rest of the markets. The US markets are still up overall for the year. Remember that while markets are driven by fear and greed, the underlying US economy is still strong.
ADDENDUM, 8/22/2024:
The goal of posting my August blog was to combat mis- and disinformation regarding the state of the economy that may be influencing voters’ perceptions. By all traditional measures, the US economy is very strong and it recovered remarkably well (and quickly) from the throes of the pandemic. Yet, I feel like this is not the complete story.
One missing piece is that despite the strong economy, many people are struggling financially. Costs for groceries, housing (both supply issues and higher mortgage rates), and prescription drugs are significantly higher than their pre-pandemic costs. While it is true that prices historically rise over time, the price spikes caused by the pandemic and exacerbated by a supply chain crisis have not reset. They remain high despite the inflation rate returning to a normal level. This higher level of prices feels artificial. Is this unbridled capitalism gone amok? Or is it corporate greed? Or some of both or something else?
I do not know what “normal” prices would look like for groceries, housing, and prescription drugs, but I believe it is possible to lower them. Price gouging at the supermarket could be investigated and perpetrators held accountable and possibly fined for infractions. Local and state governments could remove building restrictions to enable the supply of housing to increase. The Federal Reserve is currently considering an interest rate cut at its next meeting that could lower mortgage rates a bit. The federal government could negotiate drug prices with pharmaceutical companies. Americans pay 2-4 times more for prescription drugs, especially name-brand drugs, than citizens of other industrialized nations. Why is there such a markup in the US? Is it because there is no single-payer system in the US (except Medicare) like in other wealthy nations with which to negotiate drug prices on behalf of consumers? Private insurers do try to negotiate discounts but individually, they have very little power.
After hearing presidential nominee Kamala Harris’ proposals to address all three of these price issues, I am encouraged that she is listening to the average American. She has stated she will address price gouging (and she did not say “price controls” which Nixon tried to do and failed miserably). She plans to increase housing supply and offer help for first-time home buyers. She and President Biden have already capped out-of-pocket prescription drug costs under Medicare at $2,000 per year, effective in 2025. For Medicare recipients, they also have negotiated a lower prescription drug price for insulin at $35, effective in 2023, and lower prices for the top 10 most used drugs, effective in 2026. Harris hopes to expand these lower drug prices to the rest of Americans.
So, where does that leave us? Yes, the economy is strong. But not everyone is feeling it. Higher costs, particularly in food, housing, and prescription drugs are legitimate complaints. Unbridled capitalism and very little government regulation got us here in the first place; it is not the solution. Perhaps the intervention of government, at all levels, can work for the people, based on this November’s mandate from the people. Your voice and your vote matter.
Text and photograph copyright © 2024 by Dawn Dailey. All rights reserved. Photo of an old stone house surrounded by dry-stone walls on Inishmore, the largest of the Aran Islands in Ireland.
Not a subscriber to the monthly blog posts? Click here to subscribe. Subscribers receive an email each month that includes the post with the lead photo as well as bonus photos not posted on the website. Email addresses are never sold or shared.
A NOTE ON SOCIAL JUSTICE:
Jesus says the greatest commandments are to love God and to love people (Matthew 22:37-40). The Christian faith boils down to these two precepts.
Social justice puts that love into action by helping individuals who are oppressed, mistreated, or suffering, and by pursuing ways to dismantle systems of oppression. How we treat others, particularly those less powerful in society than ourselves, matters (Matthew 25:31-46).
Racial justice is one aspect of social justice. Check out my web page on “Justice Matters” to find resources and to connect with organizations engaging in the cause of racial justice. Click here to learn more.
The economy is a major factor in the quality of life in any country. But how important is the economy as a voting issue? In the 1992 presidential campaign of Bill Clinton, although there were other issues, it all came down to the economy. The phrase “It’s the economy, stupid” was coined to drive this point home. It seemed that regardless of other political issues and policies, how one’s personal finances were impacted certainly influenced how one voted. Is the most important issue to voters still the economy?
In recent polling, the economy is top of mind for many voters, especially if they vote Republican. Inflation and immigration seem to be the top two issues for the GOP, with Trump at the recent Republican National Convention erroneously stating, “We’ve suffered the worst inflation we’ve ever had.” The current inflation rate of 3% is significantly down from its recent peak in June, 2022, of 9.1%. Contrary to Trump’s claim, historically, the inflation rate has often been as much as 9%, and higher, like 18% in 1946 and 13% in 1979.
Regardless of party affiliation, there seems to be a real disconnect between the actual economy and voters’ perceptions of it. Historically, political party affiliation influences voter perceptions. In today’s polarized political environment, the distance between reality and perception is even wider than in the past.
Where one sits in the economic spectrum obviously plays a major role in perceptions of the economy. What state you live in and the economies of your state and local area will also impact you directly and influence your perceptions. But the reality is, the US economy is doing remarkably well, much better than most people realize. While the public may be pessimistic, the economy is actually very strong.
According to the Washington Post on July 22, “[t]he United States has the world’s best economic recovery from the pandemic: consumer spending has been high; more Americans are employed than in half a century; and wages have grown to help keep up with inflation.”
Inflation has fallen to a reasonable level of 3% for the last 12 months as of June and fell faster in the US than in other economically developed countries. Unemployment has been trending the lowest in 50 years; it is currently at 4%. Paychecks are also up, with overall wages rising faster than inflation. The stock market, a leading indicator of the economy, is enjoying significant growth, with the S&P 500 Index breaking record highs more than 30 times so far this year. The Gross Domestic Product (GDP), a barometer of a nation’s productivity, is up for the past three consecutive years under the current administration.
The Biden-Harris administration has done much to improve the economy as well as individual lives. It has often not received the credit due for its accomplishments. There are Republican lawmakers who voted against President Biden’s policies who are now taking credit for these policies as if they were their own ideas! Even Donald Trump falsely took credit in the presidential debate in June for capping insulin costs under Medicare at $35, something that President Joe Biden accomplished in 2022 with the Inflation Reduction Act. Obviously, false information abounds in this election season and it behooves each of us to understand the facts.
The Biden-Harris administration’s economic plan, often dubbed “Bidenomics,” promotes government investment to repair aging infrastructure, create clean energy, and increase domestic manufacturing jobs. It boosts the middle class by encouraging labor unions, lowering healthcare prices, and forgiving student debt. This economic policy promotes business competition while increasing taxes on corporations and the wealthy. It basically builds the economy from the bottom up and the middle out. It is the opposite of Reaganomics which promotes corporations and the wealthy with the hopes that their success will trickle down to the lowest workers. It does not. The past 40 years have proven Reaganomics to be disastrous to the wealth gap with the rich getting richer and the middle class and the poor getting poorer.
Bidenomics, on the other hand, has an exceptional track record. Laws promoted by the Biden-Harris administration and passed by Congress have propelled the economy out of a pandemic slog and kept the US from experiencing the much-feared and frequently prophesied recession.
For example, the American Rescue Plan of 2021 mitigated effects of the pandemic by providing Covid-19 vaccines and tests, direct payments to struggling families, and funds to state, local, and Tribal governments, among other things.
The Bipartisan Infrastructure Law of 2021 authorized funding to repair aging infrastructure, provide clean drinking water and affordable high-speed internet, and create a network of electric charging stations.
Among the many provisions of the Inflation Reduction Act of 2022 is the provision of tax credits for energy efficient home improvements, the creation of millions of new jobs in clean energy, and the negotiation of Medicare drug prices. The law also addresses the budget deficit by creating a minimum corporate tax rate of 15% and providing funds for the Internal Revenue Service to use to collect taxes currently evaded by the wealthy. As of July 11, the IRS collected more than $1 billion in past-due taxes with that additional funding. Note that no Republican in Congress voted to pass this law.
The CHIPS and Science Act of 2022 was passed to provide funding for domestic manufacturing of computer chips which will create new jobs, and funding for artificial intelligence as well as other tech and science endeavors.
President Biden has implemented dozens of executive orders, notably one to provide more robust anti-trust law enforcement to encourage economic competition between American companies, thus providing competitive pricing for consumers. Another one provides federal funds to enhance states’ Medicaid programs. Other executive actions have canceled $168 billion in student debt for 4.8 million borrowers.
The accomplishments of the Biden-Harris administration are staggering. And these achievements should be taken into consideration during this election season. On the campaign trail, the question often asked is whether you were better off economically under the Trump administration from 2017-2020 or the current Biden-Harris administration. While we should consider the past under Trump and the present under Biden, the question should be reframed to compare each campaign’s economic platform for the future.
Sixteen Nobel Prize-winning economists unanimously agree that the Biden-Harris economic plan is “vastly superior” to Trump’s plan and according to them, the US economy will be significantly worse off under a new Trump administration. They specifically say that the stock market will fall, the economy will destabilize and decline into a recession, and that the tariffs Trump proposes on imports (10% on all imports, 60% on imports from China) will be paid by the American people when purchasing imported goods, with the average middle-class family paying $1,700 per year. It will be another form of taxation. Trump’s tax cuts in 2017 added $2.2 trillion to the national debt (over a 10-year period) and will continue to add $4.6 trillion to the debt over the next 10 years if renewed in 2025 when these tax cuts are set to expire.
I would add that Trump’s plan to round up over 11 million illegal immigrants and put them into detention camps before deporting them will also devastate the economy, as this will cost billions of dollars and take up to 20 years to accomplish. It will decrease the supply of labor and decrease revenues to Social Security and Medicare, programs to which illegal immigrants pay into but from which they do not receive benefits. But of course, the human cost is incalculable: 80% of illegal immigrants have been in the US for more than a decade; over one million are married to US citizens and many have children who are US citizens. Separating family members and destroying their lives and livelihoods is unfathomable. Sending them back to the violent circumstances from which many of them fled is unconscionable and in some cases, their native countries will not actually allow them to return.
“It’s the economy, stupid” may still be true in that the US economy is an important issue to many voters. In today’s polarized political landscape, perhaps perceptions of the economy are even more important to winning votes. But reality matters. Messaging is key. President Biden and the Harris campaign need to take credit for all the good economic policies their administration has implemented. Their work rivals that of the New Deal under Franklin Delano Roosevelt, who took a stand for the American people against big business and put into motion policies that would grow the middle class and provide a safety net for both the poor and retirees. Someday, when we look back in the rear-view mirror, the reality of Bidenomics will be evident. But in the meantime, let’s just hope the fog clears before November.
NOTE: I have written, edited, and updated this post over the course of July as new data has emerged. Today is Monday, Augusts 5. As I schedule this post, stock markets around the world are having a terrible day! Stock markets always go up and down. They are often driven by two emotions: fear and greed. Today we see both in action. Some investors have used the cheaper Japanese yen to buy up tech and AI stocks to increase their gains, but at greater risks. Last week, Japan increased its historically low interest rates to a higher level, causing those investors using the yen to panic. Investors were already getting jittery over mega tech companies’ investments in AI which have not yet started to pay off. So today, we are seeing fear feed on itself and multiply to the greater investment community as these huge tech companies’ drop in value drag down the rest of the markets. The US markets are still up overall for the year. Remember that while markets are driven by fear and greed, the underlying US economy is still strong.
ADDENDUM, 8/22/2024:
The goal of posting my August blog was to combat mis- and disinformation regarding the state of the economy that may be influencing voters’ perceptions. By all traditional measures, the US economy is very strong and it recovered remarkably well (and quickly) from the throes of the pandemic. Yet, I feel like this is not the complete story.
One missing piece is that despite the strong economy, many people are struggling financially. Costs for groceries, housing (both supply issues and higher mortgage rates), and prescription drugs are significantly higher than their pre-pandemic costs. While it is true that prices historically rise over time, the price spikes caused by the pandemic and exacerbated by a supply chain crisis have not reset. They remain high despite the inflation rate returning to a normal level. This higher level of prices feels artificial. Is this unbridled capitalism gone amok? Or is it corporate greed? Or some of both or something else?
I do not know what “normal” prices would look like for groceries, housing, and prescription drugs, but I believe it is possible to lower them. Price gouging at the supermarket could be investigated and perpetrators held accountable and possibly fined for infractions. Local and state governments could remove building restrictions to enable the supply of housing to increase. The Federal Reserve is currently considering an interest rate cut at its next meeting that could lower mortgage rates a bit. The federal government could negotiate drug prices with pharmaceutical companies. Americans pay 2-4 times more for prescription drugs, especially name-brand drugs, than citizens of other industrialized nations. Why is there such a markup in the US? Is it because there is no single-payer system in the US (except Medicare) like in other wealthy nations with which to negotiate drug prices on behalf of consumers? Private insurers do try to negotiate discounts but individually, they have very little power.
After hearing presidential nominee Kamala Harris’ proposals to address all three of these price issues, I am encouraged that she is listening to the average American. She has stated she will address price gouging (and she did not say “price controls” which Nixon tried to do and failed miserably). She plans to increase housing supply and offer help for first-time home buyers. She and President Biden have already capped out-of-pocket prescription drug costs under Medicare at $2,000 per year, effective in 2025. For Medicare recipients, they also have negotiated a lower prescription drug price for insulin at $35, effective in 2023, and lower prices for the top 10 most used drugs, effective in 2026. Harris hopes to expand these lower drug prices to the rest of Americans.
So, where does that leave us? Yes, the economy is strong. But not everyone is feeling it. Higher costs, particularly in food, housing, and prescription drugs are legitimate complaints. Unbridled capitalism and very little government regulation got us here in the first place; it is not the solution. Perhaps the intervention of government, at all levels, can work for the people, based on this November’s mandate from the people. Your voice and your vote matter.
Text and photograph copyright © 2024 by Dawn Dailey. All rights reserved. Photo of an old stone house surrounded by dry-stone walls on Inishmore, the largest of the Aran Islands in Ireland.
Not a subscriber to the monthly blog posts? Click here to subscribe. Subscribers receive an email each month that includes the post with the lead photo as well as bonus photos not posted on the website. Email addresses are never sold or shared.
A NOTE ON SOCIAL JUSTICE:
Jesus says the greatest commandments are to love God and to love people (Matthew 22:37-40). The Christian faith boils down to these two precepts.
Social justice puts that love into action by helping individuals who are oppressed, mistreated, or suffering, and by pursuing ways to dismantle systems of oppression. How we treat others, particularly those less powerful in society than ourselves, matters (Matthew 25:31-46).
Racial justice is one aspect of social justice. Check out my web page on “Justice Matters” to find resources and to connect with organizations engaging in the cause of racial justice. Click here to learn more.
RSS Feed