Joe Biden’s economic record: Lots of new jobs, high inflation

Status: 01/20/2022 12:34 p.m

The economic record of the US President is mixed after a year: Joe Biden points to successes on the job market. But many accuse him of not doing enough to counter rising prices.

By Sebastian Hesse, ARD Studio Washington

At the latest since the Clinton era, all US presidents should have been aware of which policy area will increase or decrease their popularity. Accordingly, Joe Biden began his one-year report with the pleasing labor market data: six million new jobs had been created – more than ever before within a year. The unemployment rate fell to 3.9 percent.

Sebastian Hesse
ARD-Studio Washington

But Biden knows full well that the near-full employment and the robust economy are faced with a huge problem: the highest inflation rate since the 1980s. The high cost of living, combined with fears of a pandemic, is weighing heavily on Americans. Biden’s low overall approval rating of 44 percent is far undercut by displeasure with his fight against inflation. Only 30 percent of citizens think the Biden government is doing enough to stop price increases.

Biden promotes much-criticized investment package

The US President argues that a more productive economy is the best way to get the high price level under control. Biden sees the main reason for the high inflation rate in the supply chains caused by Covid. In addition to fighting the pandemic, his social and climate protection package will bring relief. But that, although shrunk to $1.75 trillion, is stuck in Congress.

“Build Back Better” is indispensable, Biden warned the MPs. 17 winners of the Nobel Prize in Economics have confirmed that the investment package will noticeably mitigate the rise in prices. But Biden’s critics complain that it was precisely his investment packages worth billions that fueled inflation in the first place.

Biden’s almost two trillion dollar Covid package was, as analysts have emphasized from the start, about twice as extensive as it should reasonably have been, says economic expert William Arthur Galston from the Washington think tank Brookings. On top of that came the $1.2 trillion for infrastructure improvements. That’s not the only reason for the high inflation rate, but it added fuel to an already smoldering fire, Galston said.

Protest against tax increases

“Build Back Better” is currently not getting a majority because it is to be financed through higher corporate taxes. A no-go for the opposition: “No more policies that impose massive tax increases on those who create jobs and investors,” says Republican Congressman Kevin Brady from Texas. That will cause a lot of uncertainty and is bad for investments.

In any case, Biden not only promised in his annual balance sheet that he wanted to close the supply chains. He also declared war on the formation of monopolies in the USA: he was a capitalist. But capitalism without competition is just exploitation.

Biden made it clear that he was serious about more fairness based on another statistic that confirmed his economic course: for the first time in a long time there had been wage increases for the lower income brackets. But the wallets of most Americans are still draining much faster than they are refilling.

A year of Biden and the economy: A mixed record

Sebastian Hesse, ARD Washington, 20.1.2022 8:33 a.m

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