Krugman on “the vindication of Bidenomics”:
Consumer sentiment, which fell off a cliff in 2022, has declined further under Trump II. Indeed, according to the venerable Michigan Survey, it is at the lowest level ever recorded. Other measures, like the index of consumer confidence produced by the Conference Board, are somewhat less dismal but also show that Americans feel
worse now than they did during the Biden years. And as the chart above shows, Americans — a crucial segment of whom voted for Trump because they believed his fabulist promises to bring prices down “on Day One” — are now saying that the Biden economy was better than the Trump II economy.[…]
Let me address three issues in particular: Purchasing power, inequality, and the labor market.
Purchasing power: Biden had the misfortune of being president when there was a large jump in prices, a jump that was out of his control and happened around the world. This came as a shock to Americans after decades of low, stable inflation This price jump clearly depressed consumer sentiment. However, it’s often asserted that the jump in prices from 2021 through 2022 left most Americans substantially poorer. And that just isn’t true…Using the eve of the pandemic as a baseline, we see that large increases in consumer prices were more than matched by large increases in wages:
Aaaaand he says that thing that nobody wants to hear when they are pointing out that people were hurting nonetheless:
[T}hroughout the past 5 years many millions of Americans have had a hard time making ends meet. But this is always true, in good times and bad. It was actually less true than usual during the Biden years, a period in which wages at the bottom rose more rapidly than wages at the top.
That was a stunning reversal of everything that was happening before or since.
People were traumatized by the pandemic and prices were higher and everything was upsetting. It’s the main reason every country in the world was tossing out their incumbents. We just had the misfortune of having the worst president in history still owning one of the parties and determined to take another bite of the apple.
On inequality:
The economist Peter Atwater coined the term “K-shaped economy” in 2020, to describe an economy in which those at the top get ahead while those at the bottom fall behind. The phrase has stuck, as has the narrative.
But what actually happened during the Biden years, at least in terms of wages, was the opposite. In 2023 and in subsequent work, David Autor, Arindrajit Dube, and Annie McGrew documented that there had in fact been an “unexpected compression” in which the wage gap between the highly paid and the less well paid suddenly narrowed.
;…]
[D]uring the Biden years, real wages for the bottom 80 percent of workers grew substantially faster than they had over the previous 40 years. Moreover, growth was especially high at the very bottom of the wage distribution. This was the “unexpected compression”: because low-earning workers experienced faster wage growth than those with higher pay, the wage gap between low income workers and high income workers was squeezed during the Biden years.
Then he talks bout the labor market:
Dube’s thesis is that a tight labor market – one in which workers find it easy to get jobs and employers find it hard to get workers — is essential to wage growth, especially among the low paid.
And for much of the Biden era the U.S. job market was very tight. For evidence, look at the Conference Board’s “labor market differential” — the difference between the percentage of people saying that jobs are plentiful and those saying that jobs are hard to get. That number is usually positive — we are an optimistic nation — but it was exceptionally positive during the Biden years:
He concludes:
So, why is it important to set the record straight about the Biden economy? We can’t rerun the 2024 election (although if we could, Kamala Harris would win.) But misperceptions about that economy may prevent us from appreciating policies — especially the strong response to the pandemic — that were actually very good, and which we should be prepared to emulate in future crises.
Isn’t it pretty to think so? But Biden was old and eggs were expensive so… never again?
I urge you to read the whole thing because he goes into much greater detail than I’ve excerpted here and makes a much more in-depth argument. But the upshot is that Biden’s policies were actually very good for the average American and it’s just a terrible shame that he and Harris were run out of office before they could take the next steps to make them stick. Trump’s only real political strategy is to be a bully and do the opposite of whatever his predecessors did and that’s exactly what he’s done.
