Bidenomics, debunked

“Bidenomics,” President Joe Biden tweeted today, is characterized by “growing the economy from the middle out and the bottom up, not the top down. It’s a vision where we make smart investments in America, educate and empower American workers, and promote competition to lower costs and help small businesses.”

It has nice slogans, but Bidenomics fails both empirically and philosophically.

THE BIDEN BORDER CRISIS IS STILL RAGING

For starters, the claim that Biden has built an economy that grows “from the middle out and the bottom up” is not accurate. For 26 months in a row, inflation has outpaced wage growth. This means that while nominal wages have indeed risen, real wages have fallen. Consequently, since Biden took office, real wages are down 5%, resulting in the average worker losing almost $5,000 in real wages, according to the House Budget Committee.

The inflation that led to the decline in real wages is primarily the fault of the Federal Reserve, which increased the money supply as measured by M2 by 41% between February 2020 and February 2022. However, it was helped along by congressional Democrats and Republicans through several big-dollar spending bills in 2020. Then, once Biden took office and inflation began almost immediately, he pushed yet more multi-trillion-dollar packages which were almost exclusively supported by his party. The subsequent inflation hurt low and middle-income households the most.

Alas, when the president writes that Bidenomics is about making “smart investments in America,” he is referring to the drunken-sailor spending which helped fuel inflation. In other words, in practice, his policies on “investment” actually made the everyday financial affairs of the American people worse. This should be no surprise, as on-the-fly economic interventionism always comes with unintended consequences. Human nature is such that it is impossible to know all the consequences of our decisions prior to making them. Economists F.A. Hayek, Thomas Sowell, and many others could teach Biden a thing or two about that.

Landmark Biden policies such as student loan forgiveness and electric vehicle subsidies principally benefit the well-off and well-connected. Those who went to college have significantly higher lifetime earnings than those who did not. Yet, Biden has spent a significant amount of time — and now legal resources — promoting and defending student loan forgiveness. The reason is evident: He would like to garner the support of young people. That is fine, but it does not benefit the working class. The same is true of his electric vehicle subsidies and goal of making 50% of all car sales electric by 2030. How exactly that helps anyone other than those who already have money is anybody’s guess.

What are we to make of the claim that Biden’s policies “promote competition to lower costs and help small businesses”? The facts do not support it. According to the House Ways and Means Committee, Biden’s 2024 budget requests a $4.7 trillion tax hike over ten years, including $650 billion that particularly target small businesses through expanding the Small Business Surtax. The Tax Foundation also acknowledges that the tax increases primarily focus on businesses, both large and small. Additionally, President Biden supports a $15 minimum wage, which would add costs for small businesses while leaving them largely unchanged for their larger counterparts such as Amazon or Walmart. As such, it would not only harm workers but is also anti-competitive in that it raises barriers to entry for small businesses.

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One could have predicted this to be the outcome of a deeper look at “Bidenomics.” President Biden routinely makes claims about jobs, the deficit, and inflation that are easily debunked or defanged with proper context. This new campaign of his is no different.

Of course, this catchphrase is designed to remind us of, and present a contrast with, “Reaganomics.” The differences, though, are not limited to policy. While Reaganomics actually denoted a legitimate economic theory, Bidenomics doesn’t denote any specific philosophy that can be coherently laid out absent political platitudes. Undoubtedly, some White House strategists thought it would be a clever word and so the administration began using it. But it is thoroughly hollow. It means nothing. It is a mile wide but an inch deep, just like so much else in this administration.

Jack Elbaum is a summer 2023 Washington Examiner fellow.