Last week, the Federal Reserve announced that it would cut interest rates for the first time since the early days of the COVID-19 pandemic, citing low unemployment and lower inflation rates. While Democrats and the corporate media are hailing the news as a major victory for the Biden-Harris administration, it will do little to alter its legacy of record inflation and economic failure that will continue to plague American families for years to come.
The timing and scale of the rate cut itself – 50 basis points rather than the expected 25 – immediately drew accusations from some economists and conservative commentators that the move was motivated more by politics than economic reality.
As noted by CNBC, other than emergency rate reductions during COVID, the last time the Fed cut interest rates by 50 basis points or half a percent, was during the 2008 financial crisis. Now, with the increased cost of living under the Biden-Harris administration emerging as a major liability for Kamala Harris’s bid for the White House, the Fed, which is controlled by liberal economists, voted in favor of the cut with just under seven weeks to go until Election Day. The timing seems suspicious at best.
Nonetheless, the rate cut and the fact that inflation has now dropped to 2.5 percent from a high of 9.1 percent have given Democrats and the corporate media all the justification they need to claim that “Bidenomics” has been a roaring success and that the country has finally rounded the corner on inflation. Biden himself said that the rate cut is a “declaration of progress” on inflation. CNN touted the news as evidence of the “soft landing” Democrat economists have been predicting. The Associated Press assured readers that the cut “signals end to inflation fight.”
But while the Fed and corporate media outlets may indeed believe that the inflation fight is over, it is only beginning for everyday Americans. What Democrats and the media have conveniently ignored as inflation rates have come down is that people are still dealing with the effects of mounting price increases throughout the vast majority of Biden’s presidency.
Cumulative inflation since Biden and Harris took office has now topped 20 percent, and Americans are still stuck paying those higher prices even though the current inflation rate is lower. Inflation has far outpaced wage increases, meaning that Americans’ paychecks aren’t going nearly as far as they were four years ago. Things aren’t getting expensive as fast anymore, but they aren’t getting cheaper, either.
While Biden, Harris, and congressional Democrats are patting themselves on the back, they have no answers for families who are still struggling to put food on the table or keep the lights on. Harris’s only idea to bring down grocery prices has been to resort to all-out communism, a strategy she refers to as a “ban on price gouging.”
Unsurprisingly, according to Newsweek, 39 percent of all Americans have taken on a second job to meet basic needs because of inflation. That figure has more than doubled from 2017 when just 19 percent of respondents in the same poll reported having more than one job. A Wells Fargo report from earlier this year also found that the “personal savings rate hit 3.6 percent, marking the lowest rate at which households saved in 14 months.” The pre-pandemic average rate was six percent.
Democrats’ other big economic talking point, supposedly strong returns in the stock market, is also undercut by cumulative inflation. The S&P 500 is up roughly 48 percent since Biden took office – well above the index’s average yearly return of 10.73 percent. But when 20 percent cumulative inflation is factored in, those returns become much less impressive, and Americans’ investments are worth far less in real terms. The same is true for the DOW Jones and other indexes that track the overall performance of the stock market.
Regardless of how Democrats try to rewrite history and eschew responsibility for the problems they created, the reality is that Biden’s economic legacy will always be defined by inflation caused by trillions of dollars in wasteful spending. For the vast majority of Americans, their financial situation today is worse than the pre-pandemic boom times of the Trump years.
For Kamala Harris, this is a major problem, which is why the corporate media is working so hard to convince everyone that the economy is actually very strong and that it’s all thanks to the current administration. Harris owns the economic record of the last four years as much as Joe Biden. How voters judge that record will go a long way toward determining the next incumbent of the White House.
Andrew Shirley is a veteran speechwriter and AMAC Newsline columnist. His commentary can be found on X at @AA_Shirley.
