‘Let them eat cake’ is irresponsible economic policy
OPINION:
“Bidenomics” equals stagflation. That’s America’s sober economic reality after more than 2½ years of the Biden presidency, pockmarked by profligate government spending, soaring interest and mortgage rates, a precipitous loss of strategic energy dominance, a southern border invasion, a new and expensive endless war, and a rapidly expanding trade deficit.
Stagflation is a “tax” crueler than inflation alone, which eats away at our purchasing power. This is because the “stag” part of stagflation also entails recession or slow economic growth.
As the 2024 presidential election approaches, Bidenomics is conjuring up the ghost of a 1970s stagflation past that ended in a landslide victory by Republican candidate Ronald Reagan over Democratic President Jimmy Carter. In the final 1980 presidential debate, with polls surprisingly close given the grim economy, Reagan asked the American people, “Are you better off than you were four years ago?”
That question — and its obvious “no” answer — triggered a decisive break in undecided voters to the Reagan camp.
Will this Reagan-Carter past be prologue to a resounding defeat of President Biden?
The answer to this question must begin with this observation: Mr. Biden’s Democratic Party is supposed to be the party of America’s working classes and wage earners. Yet American labor is now bearing the heaviest burden of Bidenomics.
This burden is most evident in the (mostly) downward trajectory of “real wages,” which measure actual or nominal wages adjusted for inflation. When inflation is rising faster than nominal wages, real wages are falling along with workers’ purchasing power.
This is what is astonishing: Of the roughly 900 days Mr. Biden has been in the White House, real wages have fallen for almost 700 days — about 75% of Mr. Biden’s time in office. The collective drop in real wages has been 3% rather than the robust real wage gains workers deserve and expect.
Against this backdrop of falling real wages, energy prices have skyrocketed. From truckers and Uber drivers to commuters and flyover country ranchers and farmers, the pain of a nearly 50% rise in gasoline prices has spread far and wide.
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