(This column originally appeared in The Guardian)
The Republican primaries are under way and – not surprisingly – the candidates have been ganging up on Bidenomics. Spoiler alert: they don’t like it. Fact check: they are wrong.
To a man – and one woman – the Republican candidates all say that the US economy is bad and that Americans are struggling financially. They’re warning about sky-high deficits, over-the-top government spending and a potentially catastrophic level of national debt. They point out that interest rates are at a 20-year high and the costs of core things like food, gas and housing are significantly more than they were just a few years ago. They point to a downturn in manufacturing and falling small business confidence.
“Bidenomics is crushing American families,” said the Republican candidate Nikki Haley. “We’re paying more for gas, groceries and other basic necessities.”
“I’ll rip up Bidenomics on day one of my presidency,” the Florida governor and presidential challenger Ron DeSantis warned.
Yes, prices and rates are up. But really? Is the economy so bad? I’m a Republican and a small business owner with hundreds of clients in many industries and honestly the economy isn’t that bad. In fact, it’s been really, really good.
Just ask Donald Trump, who implicitly admitted this when he recently said he hoped for a “crash” and that it would “be in the next 12 months because I don’t want to be Herbert Hoover”.
If you don’t believe me, just look at the numbers.
Last quarter’s gross domestic product showed growth of 5.2%. That’s a number that dwarfs all other pre-Covid recovery numbers in recent memory. Unemployment is at a record low. Each month the economy is adding hundreds of thousands of new jobs. There are millions of more open jobs available today compared with 2019.
Yes, prices are higher, but inflation is down from a 9% annual rate to about 3%, so whatever the Federal Reserve did to offset the treasury’s spending on fiscal programs seems to be working. The stock market is near all-time highs, as is household wealth. Credit card delinquency rates are lower than they’ve been for the past 30 years as are delinquencies on all loans across the banking system. Holiday retail sales were strong and online sales boomed. Plenty of capital is available for businesses that need it and corporations have more cash on hand than in any year before the pandemic.
I speak to dozens of industry associations each year and here’s what I’m hearing: just about everyone had a good 2023. The CEOs of our major banks reported strong earnings, after taking into consideration special assessments and one-time charges. Retailers and restaurants have recovered from the pandemic. Convention traffic in Vegas is back to normal. There are almost as many travelers through the airports as there were before Covid. Businesses in the service industries recorded their 12th consecutive month of growth.
Sure, there are struggles. Businesses in the real estate industry are challenged by high housing prices and a 13-year low in home sales. Manufacturing has been in contraction for the past 14 months. Media companies are flailing. Technology firms are struggling to find financing. The cost of capital is slowing down financing for small businesses. However, we live in a giant country. California’s economy is as large as that of the entire United Kingdom. North Carolina’s economy is bigger than Sweden’s. Texas’s is bigger than Canada’s. Not every business is going to be doing well in an economy this size. There will always be those that are struggling, be it because of their location, their industry, or the makeup of their customer and supplier base.
There are plenty of things that could knock things off course in 2024. Wars. Oil prices. A terrorist attack. Another pandemic. If you want to find the bad in the economy you can do it. And that’s what all the Republican candidates are doing and fair enough, it’s an election year. It’s also true that Bidenomics may not be the reason behind our strong economy. But saying the US economy is bad just isn’t true no matter who you vote for.
