Republicans are terrible for the economy. Since 1988, Republican presidents have added a net of just 264,000 jobs, compared to more than 47 million by Democrats — almost 180 times as many! And more than a quarter of that has come from Joe Biden in just 30 months. Biden has presided over the strongest recovery in decades, if not generations, but you wouldn’t know it from the media — which could be a huge problem for American democracy. If Biden can’t get credit for this strong recovery — unmatched by any of our peer countries — Donald Trump stands a good chance of returning to the White House, particularly if House Republicans or the Federal Reserve can disrupt this, and send us into recession.
The media’s role is evident in the substantial gap between how people see the economy as a whole (what the media tells them) and how they see their own lives. It’s often a good 20 points or more. Sometimes a lot more. In a New York Times/Sienna poll last year, 17% said their personal finances were “poor”, while 58% said the nation’s economy was “poor.”
The tone was set in Biden’s first year, with the media’s intense focus on single-digit inflation — a worldwide phenomena — and relative neglect of almost 15% unemployment (a post World War II high), which is now near record lows. And it continues to this day.
The June jobs report was typical. The New York Times, CNN, Bloomberg and others struck similar headline themes of a cooling job market. But it was almost unchanged from March and April — only May saw a huge spike. And before Biden took office, there were only three years since 2000 that averaged faster job growth than that. So it was left to Biden himself to provide a more realistic assessment.
“Our economy added more than 200,000 jobs last month — for a total of 13.2 million jobs since I took office,” Biden said. “That’s more jobs added in two and a half years than any president has ever created in a four-year term. The unemployment rate has now remained below 4% for 17 months in a row — the longest stretch since the 1960s.”
If anything Biden is underselling what he’s accomplished. The slow recovery after the great financial crisis — due to woefully inadequate stimulus spending — resulted in prolonged economic suffering that contributed to a strong rightwing political resurgence, most notably in the U.S. election of Donald Trump and the UK Brexit vote.
A 2016 paper, “Going to extremes: Politics after financial crises, 1870–2014” studied 20 advanced economies and more than 800 general elections over more than 140 years, and found that far right political parties are the biggest beneficiaries of a financial crash: “After a crisis, voters seem to be particularly attracted to the political rhetoric of the extreme right, which often attributes blame to minorities or foreigners. On average, far-right parties increase their vote share by 30% after a financial crisis.”
Biden learned his lesson, and passed three significant spending bills (the American Recovery Plan, the Infrastructure Investment and Jobs Act and the Inflation Reduction Act), Europe did not — and is lagging well behind the U.S. in recovering what has been lost.
The anti-Biden economic narrative during Biden’s first year was discussed by University of Wisconsin political scientist Mark Copelovitch, in a January 2022 article, “An Unprecedented Recovery: Why Have We Lost the Plot?”
“Without question, the Biden administration’s unprecedentedly aggressive fiscal policy has been central to this extraordinary recovery,” Copelovitch wrote. “Rather than facing a second lost decade, we now have the prospect of a stronger economy post-pandemic than the one we had at its outset.” But instead of the strongly positive narratives one might expect from this record, media coverage was “almost comically negative and pessimistic … consumed by an incredibly disproportionate focus on inflation.” This was reflected in his tally of headlined articles on inflation vs. unemployment in the LexisNexis database. “This ratio was nearly 12-to-1,” he reported, calling it “utterly astounding.” On one hand there was “rising-but-still single-digit inflation,” while on the other, “unemployment spiked to an 80-year high of 14.7% in April 2020,” yet “the media spent the last year writing a dozen articles on the former for every one on the latter.”
Furthermore, Copelovitch noted several ways these stories fail to benchmark what they’re talking about. The first is historical: “gas rising from $1.68/gallon in April 2020 to $3.20 in January 2021 … remains far lower than 2011-14, when prices were $3.60-$3.90 and media inflation coverage was all but nonexistent.” The second is realist: Biden’s fiscal policies put considerable money in people’s pockets, so “the average voter’s real consumption and income did not decline at all in 2021.” In fact, “median real income actually increased.” The third is a parochial refusal to benchmark our economy against those abroad. This drove the narrative “that inflation is a homegrown problem – caused by US fiscal policy,” which clearly made no sense when other countries had higher inflation than ours.
These three failures to provide meaningful benchmarks for discussing inflation had two sinister effects: First, they made inflation seem much worse, arbitrary and inexplicable than it was — all of which cast Biden in a negative light. Second, they failed to provide a coherent reference frame so that the policies Biden pursued — particularly fiscal stimulus — could be understood and evaluated on their own terms — including tackling the climate crisis, which could have catastrophic economic consequences already starting to be felt. Fiscal stimulus did have some inflationary impact (significantly less than supply chain disruptions), but was intended to avoid the sort of prolonged unemployment and economic under-performance that followed the great financial crisis of 2008.
And that’s precisely what Biden accomplished.
In December 2021, Skanda Amarnath, executive director of Employ America, created a chart comparing prime age (25-54) employment in this recovery to three previous recoveries. “In those previous recoveries, the prime-age employment rate was still declining 22 months after the previous pre-recession peaks.” But this time, the rate “gained 0.5% in November alone and now stands just 1.5% below its 2019Q4 level and 1.7% below its peak monthly level.” By now — as his updated chart shows — the employment rate is completely restored. It took 38 months, compared to 153 months (four times as long!) after the great financial crisis, and 77 months after the 1990 George H.W. Bush recession. There never was a full recovery from the 2000 George W. Bush recession — despite massive tax cuts that were supposed to fix it. Reduced employment dragged on for 81 months before it started falling again on the cusp of the Great Recession. Prolonged unemployment like those previous episodes brought profound negative consequences, particularly for those entering the job market for the first time.
But the sharpest contrast is to what happened after the great financial crisis.
In a 2017 paper, “This Time Should Have Been Different: The Causes and Consequences of Macroeconomic Policy Failure in the Great Recession,” Copelovitch argued, “Policies that might have resolved the crises quickly … in particular, large-scale fiscal stimulus … were never even attempted.” He emphasized “two key factors,” the first of which was “the persistence and pervasiveness of ‘bad’ economic ideas … such as the household analogy, the morality of debt, and expansionary austerity.”
Those bad ideas are still floating around, but Biden wisely ignored them. But they’re likely to return full force later this year, when House Republicans almost certainly will threaten a government shutdown in an effort to pass draconian budget cuts. They will claim deep cuts are necessary to balance the budget — a concern that vanishes when it comes to cutting taxes.
The household analogy says that households have to balance their budgets, so the federal government should do the same. But the federal government isn’t a household, and it doesn’t have to repay its debts — it only has to service them. Indeed, if it did repay all its debts, the world economy would collapse, because U.S. securities — debt — are the foundation of the international financial system. More immediately, when households cut their spending in a recession, the government has to spend more to keep the economy afloat. What’s more, the government can spend money on public goods with long-term payoffs that no private entity can make off of — except as a result of such government spending. That’s how the foundations of the computer and aerospace industries were laid, for example.
Stimulus spending is how Franklin D. Roosevelt fought the Great Depression — though Congress wouldn’t spend enough to finally end the depression until we entered WWII. And other countries learned that lesson as well.
While it’s fallen out of favor in Europe and America, it hasn’t stopped working, as recently noted by Nils Gilman, senior vice president at the Berggruen Institute, who tweeted the following comparison:
“The world ran a field experiment in fiscal policy after the GFC [great financial crisis]: China did huge stimulus; U.S. did small stimulus/mild austerity; EU did huge austerity.
“Results, from 2008 to 2022:
[China] GDP: $4.6tn $18tn (+391%)
[US] GDP: $14.7tn $25tn (+70%)
[EU] GDP: $16.2tn $19.8tn (+22%)”
The lesson is clear, though the mainstream media hasn’t learned it. But Biden tried to apply it. His original Build Back Better plan called for roughly $6 trillion over 10 years. Republicans — supported by Joe Manchin and Krysten Sinema — forced him to shrink that significantly. But it still helped restore the job market to pre-COVID-19 levels in record time, while laying the foundation for a long-delayed green energy transition. When Republicans gained control of the House this year, they immediately tried to undo Biden’s success, threatening to not raise the debt ceiling unless Biden agreed to more than $3.5 trillion in cuts — the exact opposite of what works to grow the economy.
The mainstream media’s stance of trying to strike a balance between Democrats and Republicans runs into obvious problems when a GOP president lies more than 30,000 times and breaks more laws than you can throw a stick at. The problems may be less obvious when it comes to the economy. But they are equally severe.
Recall that Democratic presidents have created 180 times more jobs than Republicans have since 1988. Republicans have presided over four recessions, which Democrats have struggled to get us out of. Democrats — though often too timid — pursue stimulative spending that powers economic growth. Republicans pursue ‘trickle-down’ tax-cuts for the rich, which a paper published last year found “do not have any significant effect on economic growth or unemployment,” based on 50 years of data across 18 OECD countries — though they do “lead to higher income inequality,” which itself is a serious economic problem.
The purpose of the press is to inform the public, to make the world legible so that sensible policies can be pursued. This is why the press enjoys First Amendment protections, why it is so vital for our democracy. Of course it is important to hear a wide range of views as well. But giving equal weight to “both sides” at the cost of accurate reporting making things legible gets everything backwards. Facts have to come first. And shared understanding has to be the goal. Airing “both sides” on climate change when one side has been lying for 50 years is not making things legible. Neither is airing “both sides” on the economy, when one side’s prize policies only make things worse, while obscuring other crucial problems. Careful weighing of alternatives requires knowing what they are. When the press fails, democracy fails, too.
Without the press to help make sense of the world, average voters tend to respond simplistically to the immediate situation: if things seem to be going badly, vote for someone new. This gives House Republicans an added incentive to tank the economy — by government shutdown, massive spending cuts, or both. And a “both sides” media will help them do it. But a reality-based media would call them out for intentionally harming the economy — and hundreds of millions of Americans — just to grab power for themselves.