Vice President Kamala Harris’s biggest mistake in her campaign for president is not giving President Joe Biden and herself credit for creating the strongest economy in US history. Considering the mess Donald Trump left them with, this is even more impressive.

For decades, economists wrung their hands about how inflation adjusted wages in the US dropped after the mid-1970’s. Economic stagnation, they called it.

Record high inflation adjusted wages during the Biden/Harris Administration

However,  the Biden/Harris Administration, with help from the Federal Reserve, broke through this malaise. Never before have American workers had it so good.

No matter how you measure inflation, inflation adjusted wages are at an all-time high.

Total employment at all time high

What makes Biden/Harris’s accomplishments even more spectacular is they combined record high inflation adjusted wages with the highest number of people ever employed in the US. At the same time, unemployment rates are historically low.

We should put this in context. Remember the disaster Trump left at the end of his term? Partly because of his COVID mismanagement, we had supply chain problems that caused high inflation.

The increase in the number of people working came when interest rates were at historically high levels. This accomplishment is unheard of anywhere, anytime.

While most economists predicted a major recession with lower wages and falling number of workers, Biden/Harris and the Federal Reserve quietly went about building the strongest economy in history.

Business startups at all time high

A strong well run government creates an environment where entrepreneurs have confidence that they can take a risk and be successful.  During the Biden/Harris term, they built this environment resulting in the record number of new business startups.

Incidentally, this is a 25 percent increase in new businesses since Trump left office.

 

Republicans claim they are going to lower inflation if they win the presidency. Someone needs to tell them Biden and Harris already did this.

(Note: I remember my daughter’s car buying experience in 2021 when  dealers marked up new cars over $4,000 over MSRP because of a shortage of vehicles. Because of a shortage of houses for sale, my wife and I sold our Madison, Wisconsin house for far over market value. If anyone wanted to build a house in 2021, good luck.)

Biden/Harris and the Federal Reserve didn’t panic or pay attention to Republican complaining. They just quietly raised interest rates to keep the psychology of inflation in check and waited for supply chains to work things out – without government interference. (Note: Republicans never offered any solutions to lower inflation. They just offered their doomsday whining.)

I remember farming during the 1970’s when President Richard Nixon put a price freeze on to stop inflation. It failed miserably.

I desperately needed to buy a large tractor during the price freeze. John Deere all but shut production down because they couldn’t raise prices to cover their increased costs. Large tractors were on a month’s long waiting list. While John Deere couldn’t raise their prices, dealers charged $thousands over list price for the ones they could get. I was lucky enough to get a really good, lightly used tractor for a decent price. Also during the price freeze, if you needed a part for your equipment, you held your breath until it was in your hands. Many times, these essential parts were on months long back order.

When President Gerald Ford took office, he launched the “Whip Inflation Now (WIN)” program. He expected companies to voluntarily not raise prices.  It failed.

President Jimmy Carter appointed Paul Volker as Chairman of the Federal Reserve in 1979. Volker proceeded to raise interest rates from seven percent to 21 percent. That stopped inflation. However, it bankrupted the savings and loan industry, threw the US into a deep recession and decimated farm land values (not to mention my profitability).

For someone as old as Frugal Ron, all this just makes the Biden/Harris soft landing of stopping inflation while growing employment miraculous.

Stock market at all time high

The crowning glory of the Biden/Harris Administration’s economic accomplishments is having the Dow Jones Industrial Average (and other markets) at record high levels. This isn’t just good for Wall Street tycoons. It also raises the value of individual retirement funds to all time highs for people who never thought they would be that wealthy.

It also shows the faith markets have for the future, as long as Kamala Harris is elected president.

Republicans can’t manage an economy

The sad truth is Republicans can not manage an economy.  No where is this spelled out better than in “Why Democrat’s Economies Flourish and Republican Economies Fail” https://www.frugalron.com/why-democrats-economies-flourish-and-republican-economies-fail/

• Of the last ten US recessions, nine stared while a Republican was president.
• Since employment records were started, of the eight presidents with the highest job growth, seven were Democrats. Of the seven presidents with the lowest job growth, six were Republicans. Donald Trumpo had the lowest job growth of any president. He was the only one with negative job growth during his presidency.
• Of the seven presidents wit the highest economic growth rates (measured by GDP),  six are Democrats. Of the nine presidents with the lowest GDP growth rates, seven are Republicans. Trump had the lowest economic growth rate of all presidents.
• Every Republican president from George H.W. Bush increased the unemployment rate dramatically during their terms. Every Democratis president since then fixed the economy and dramatically lowered unemployment.
• Every Republican president from Ronald Reagan forward dramatically increased the annual spending deficit during their terms. Every Democratic president since then has dramatically lowered the annual spending deficit. Donald Trump ioncreased the size of the annual deficit each year he was in office. His ending (2020) deficit is the highest in history.

Of course, failure is not a problem for Republicans. They will just lie and claim (without evidence) that they can successfully manage an economy. Sadly, half the country will believe them.

Summary

All this is well and good. But, what about those who say they don’t care about all these statistics? They claim they never had it so bad financially and blame Biden and Harris.

The very best a government can do is provide a record number of jobs paying record high average inflation adjusted wages. If an individual is living above his or her means, they shouldn’t expect government to bail them out.

Bidenomics has not been perfect. Inflation would have gone down faster and growth would have been higher if Biden/Harris had ended Trump’s tariffs on their first day in office.

Nevertheless, it amazes me that Kamala Harris and Tim Walz let Republicans denigrate this economy without jumping all over them. Frugal Ron can’t change how they campaign. But, I can put facts on this website and urge those that haven’t voted to vote for results, not promises and lies.