The White House is trying to sell 'Bidenomics,' but poll after poll shows that the public is extremely unhappy with the economy. What does the public see that the bureaucrats don't?
It’s interesting that you mentioned 1983. That was a huge year for changes to the tax code specifically the increase in the FICA contribution. I have heard it described as the largest tax increase on the US work force in history. This was followed three years later by the revision of the income tax code. Much has been said about lowering the highest tax rates but very little has been said about the changes to the code for workers. Did you know that this tax code revision eliminated deductions for consumer interest? Or that it did away with income averaging? All three of these changes adversely affected my part of the economy (construction). The house I live in is worth 10 times what it was in 1978 but are carpenters making 10 times what they made in 1978? I will save you the research time. The answer is no.
There needs to be a serious effort at undoing the harm neoliberalism has caused society. Not everything or everyone should be held to a standard in which only shareholders win. This is true for anti-trust; wages; IP rights; access to markets; access to finance; and, the general decrease in competition in our markets. There is no shortage of people willing to work on this - there is a lack of consistent effort at clearly articulating why and how government works for The People.
Matt you rock 🪨
It's probably too little too late. Turns out people do not like to be gaslighted with bullshit statistics that have no relation to their reality. Also this administration has a bad habit of pretending everything is fine until the country and their political opposition have been screaming about it for months. Remember the supply chain debacles or "transitory" inflation? Voters will not remember every single economic event, but they will remember the White House being out of touch.
Everyone forgets that Delaware is the corporate motherland. No way Diamond Joe would have been senator since the malaise era if he wasn't a shill for the corporate attorneys. He talks up union and working class like he's been there, but com'on man! We all know that's just to keep the bureaucrats happy. No one actually expects him to help out the working man.
Over in Austria, a collaborative set of activists (mostly one though) held their governments feet to the fire on food pricing by scraping data and analyzing it. https://mastodon.gamedev.place/@badlogic/111071396799790275
Showing what looks very much like price collusion on goods between dominant players.
Good analysis of what’s going on (and wrong) in government today. But it isn’t just ‘Bidenomics’. This has been going on for decades. What we have is a ruling and government class all getting rich based on policies and rules which they provide, legislate and support that ignore common sense and the basic needs and desires of a vast majority of the population. Examples are the climate fallacy, carbon capture nonsense, open boarders, failure to enforce laws actually on the books, creative prosecutions based on political ideology, featherbedding of any and all government jobs whether they be local, state or federal. And this includes guaranteed pensions, COLA raises, Peter Principal promotions for those same government lackeys, politicians getting wealthy while in office thanks to lack of term limits and rampant revolving door lobbying, and just plain corruption at the highest levels of government. Fortunately the peasants are finally waking up and beginning to figure out where the problems really are. Let’s just hope we actually do have a landslide of voting in 2024 to finally drain the swamp. Of course the corruption is so widespread that any change is highly unlikely.
Some tough but fair medicine here, Matt. As a liberal Democrat, I am part of the team not matter what. But you can’t just stick your head in the sand and try to jawbone folks that their economic insecurities are irrational. You’re right, the messaging has to change the Biden, despite being old, I think has a record that he can run on and win.
Follow Rudy Havenstein. He gets inflation, has written on (nonsensical) changes made to the calculations and who/how it hurts. CPI is a joke. Grocery shop and you get it.
The wealth divide is real, getting worse and everyone has access to the data. CEO pay to worker pay was 20 times in 1965 and 399 in 2021. I’m surprised more people aren’t on strike. Corporations get bailed out but anything for “regular “ people is labeled socialism. Ugh...
The government is a mess. It’s been told what to do by corporations for so long that it’s full of people who know someone (important?) but has no one who knows how to do anything. Fire everyone and start over. I’m stealing from Robert Bruce here - I’m not Democrat and I’m not Republican. I’m disgusted!
Happy Rosh Hashana
"What does the public see that the bureaucrats don't?"
The question is "What do the bureaucrats see that the public doesn't?"
Money. A future. The hope of buying a home, getting a raise, dependable healthcare.
IIRC that change in CPI was another little Reganoid gift
Thanks for this. I've got a question about housing. Living in San Francisco, housing costs are among the most expensive in the country. Not being anything of an economist (I own a small business), it seems to me much of these housing costs arise from the enormous wealth gap in this city (as well as the rest of the country). When policy makers invite a certain segment of the economy with various incentives and that segment happens to be well-paid, the pressures on housing becomes too real. So, with the need for more housing, policy makers support market-rate housing. Many cynical reasons for this but let's just say allowing only market-rate housing has pushed housing costs to extraordinary heights as there is a small but significant portion of the population that can afford to pay these costs. I'm not even including institutional investors here but that seems another aspect to housing costs. With increasing prices comes increasing wealth for those fortunate enough to afford such costs. Now, for the sake of protecting property values, little is being done to ameliorate the situation as those with this property wealth also have the means to support policy makers who support the system as it is. It strikes me as a vicious cycle of sorts, excluding more and more and in fact this dynamic seems to be happening not just in this country but throughout the world. But, as I stated, I'm no economist so does this enormous wealth gap have anything to do with housing inflation?
Of the hundreds of billions of dollars of investment coming out of the IRA, CHIPS, and Infrastructure acts, some 70% are going into Red areas. More jobs and better paying jobs will help with the cost of living. It is of course taking time for these investments to turn into reductions in economic and material suffering. Probably the best messaging will come from jobs with better wages.
The one big problem is that people don't like higher interest rates because they got used to really cheap money. The public is "taking their medicine" a bit with higher rates, and people don't really like getting 8% loans when they used to be 3%.
The problem is really cheap money has lots of negative externalities, like cryptocurrency scams, stupid bubbles, fake tech companies, etc. So it's completely understandable the average person isn't happy with rates, but at the same time higher rates aren't necessarily harmful to the economy overall.
How does the administration handle that? Not great so far, I'd say.
The funny thing about this commentary is that it extends to alot of other areas, notably reelection strategy. Biden could easily lose to Trump because of his incoherence and its effect on his staff just not having the integration and direction that they need. I know Trump is busy fighting off legal challenges and they aren't doing the legwork that's needed to get out the vote, but they sort of don't have to because Trump in a unique way just sells himself, at least politically. Biden on the other hand, needs every bit of support from the DNC and any Dem and independent out there. Hell, he can probably win, misunderstand why, but the only win for us would be a continuation of the Khan FTC, NLRB board remaining intact, and not much more.
I'd add that Biden is way too comfortable with his current standing, and doesn't feel threatened, and that feeds into his staff. It's the same groupthink that you see with other senior Dems (Pelosi, most notably.)
We just need Newsom, Josh Shapiro, or another Dem gov or figure to actually challenge him and wake this WH the F up. Maybe Cuomo can do it and just be a royal pain in the ass for everyone just in time.