AMAC Exclusive – By Seamus Brennan
With inflation at its highest rate in four decades, it’s easy to understand why the economy remains the top concern for American voters in advance of next week’s midterm elections. After all, Americans gained thousands of dollars just several years ago under the Trump administration—but are now suffering an enormous pay cut under the inflationary policies of the Biden White House.
Perhaps no statistic captures the stark difference in Americans’ economic fortunes under President Biden compared to President Trump better than the purchasing power of workers’ wages. Under President Trump, between 2017 and 2019, Americans received a whopping $5,237 increase in real median income and a $6,603 increase in median family income—suggesting that Trump administration policies led to historic economic gains for American families. Under Joe Biden, however, families have lost on average $6,000 in purchasing power—a staggering figure that lays bare just how devastating Biden’s policies have been for everyday Americans.
According to a sobering analysis from renowned economists Stephen Moore and E.J. Antoni, “over the past 20 months, [the] rise in consumer prices over wages means that the average family in America has lost nearly $6,000 in purchasing power”—a figure that is likely to grow in the months ahead. “It’s not exactly the same as a bank robber with a gun stealing a quarter of the money in your bank account,” Moore continued. “But at the end of the day, Bidenflation has had the exact same unhappy result.” Moore and Antoni further found that the average 401(k) plan is down $34,000 in less than one year – a more than 25 percent decrease and a devastating hit to Americans’ retirement savings.
Under Biden, consumer confidence has also plummeted to remarkable lows: the consumer confidence index in September 2022 hit 96.7—a huge difference from four years ago in September 2018, when it reached a 101.5, nearly the highest number recorded since 2004. Likewise, under Trump, the average 401(k) rose to $112,300—an all-time record. Under Biden, the average 401(k) account is down to roughly $101,000, and that’s with 8 percent inflation.
In a recent interview with AMAC Newsline, Casey Mulligan, former Chief Economist for the Council of Economic Advisors under President Trump and one of the nation’s leading economists, explained the reasons for some of these dramatic shifts in economic trajectory. Biden, Mulligan said, “created a lot of government dependence in his first year… he was handing out those big unemployment benefits and other government paychecks—and that was very disruptive.” Mulligan also pointed to the administration’s draconian COVID mask and vaccine mandates as a source for economic disruption: “It’s one thing to compete against the government’s tax, and then the government’s telling you that you have to fire people who didn’t get the shot.”
But Biden’s economic missteps extend far beyond the spheres of government dependency and COVID mandates. The current administration’s regulations, Mulligan said, have marked a “180-degree [difference] from Trump…businesses got a lot more government rules they have to follow—and that makes them less productive. So, Biden’s kind of holding back the workers—and then the workers we did have, he made them less productive.”
“Inflation is a symptom of that,” Mulligan continued, “and it’s one that people see easily, so I understand why they focus on it. It’s more a symptom of a deeper cause. [Biden has] put us in a position where we can’t even do some of the things that we were able to do in the Trump administration—like pumping oil, and things like that.” Mulligan also pointed to the expiration of certain provisions of Trump’s 2017 tax cuts as a cause for the faltering economy. “If Trump were here, he’d be renewing them, but… Biden’s letting them expire,” which is leading to a “bigger tax liability” for American businesses.
Mulligan also noted some of the ways in which Biden is seeking to prolong the disincentive to work—including Obamacare expansions, which Biden has made permanent through the so-called Inflation Reduction Act. “I’m not sure if you’ve noticed, but the people on food stamps got a 12.5 percent raise this month—so the inflation kind of gives an automatic raise to people on government programs, but of course those of us who work don’t get an automatic raise… so we’re pumping up the benefits lifestyle, if you will, and not pumping up the working lifestyle.” This phenomenon, he continued, amounts to “a new hit our economy is taking. And I think we’re going to see the employment rates come down—and it’s going to be a tougher labor market than we’ve seen so far because of that.”
When asked if the Biden administration is taking any meaningful efforts to arrest inflation, Mulligan said that Biden’s reappointment of Jerome Powell as the chair of the Federal Reserve suggests that, as long as Biden remains in office, inflation will likely continue to hang over the heads of American families. Biden simply “doesn’t know what he’s doing,” he said—pointing to his elevation of figures like Janet Yellen as Treasury Secretary, who for years has insisted she had seen no signs of recession.
The quickest way to reduce inflation, Mulligan continued, comes down to the Federal Reserve: “You’ve got to have a good Fed chair,” which is a presidentially appointed position. “Part of having a good Fed chair is not just finding a great guy out there, but giving them incentives so they should be punished when they don’t do a good job.”
Looking back on the Trump years, Mulligan shared that he’s recently been awakened to how much Trump’s deregulatory policies “reduced dependence on government.” And now, he continued, “when I see things going in the other direction, you can really see how that works… Now, we’ve got the opposite. Workers are getting pay cuts and people on benefits are getting a raise—so that feedback from the economy to government dependence has become more visible now.”
The contrast between the rock-bottom economy under Biden and the booming economic conditions of the Trump administration just several years ago could not be starker.