In the current political landscape, both the Harris-Biden administration and Donald Trump’s camp are guilty of promoting misleading economic narratives to bolster their respective platforms. Each side claims significant achievements: the Democrats tout the creation of 16 million jobs under their watch, while Trump boasts of the “Greatest Economy Ever,” attributing low inflation during his presidency to his policies. However, a deeper analysis reveals the inadequacy of both claims, emphasizing the need to consider broader economic contexts, such as the stages of the business cycle and Federal Reserve actions. Economic phenomena are influenced by myriad factors beyond simple political proclamations, making direct comparisons between administrations fraught with complications.
The Harris-Biden administration’s assertion of job creation is notably overstated. While they report the creation of approximately 16.6 million jobs since December 2020, a significant portion of these are “born-again” jobs—a rebound from the prior COVID-19 lockdowns that had decimated the job market. Specifically, 59% of these new jobs merely reflect the recovery from the sharp decline in employment earlier in 2020, not net new jobs created by the current administration. In reality, when compared to previous administrations, the net new job growth under Harris-Biden is considerably lackluster. For example, during Obama’s second term, the economy gained an average of 261,000 jobs monthly, while Harris-Biden can claim only 151,000 per month, accompanied by the highest inflation rates in four decades.
This narrative is echoed when examining Trump’s economic record. His administration’s average growth rate of real final sales of domestic product was a mere 1.5% per year, one of the lowest in the past several decades, trailing behind many previous administrations. While supporters might attribute some downturns to the impact of COVID-19, the reality is more complicated. Even after excluding COVID-impacted quarters, Trump’s economic performance remains disappointingly low at 2.2% annual growth. Lockdowns, which Trump failed to oppose actively, triggered severe economic contractions that his administration cannot escape. This is further complicated by the overall damage incurred to constitutional rights during his presidency amid responses to the pandemic.
Despite public recollections of a stable economic environment prior to Biden’s presidency, the inflationary pressures that surged during his term can also be traced back to the fiscal and monetary policies initiated during Trump’s presidency. The COVID-era government lockdowns and spending measures, including an unprecedented stimulus represented by the CARES Act and further spending under both Trump’s and Biden’s administrations, created a massive fiscal influx at a time when supply chains were severely restricted. Consequently, the resulting demand shock collided with supply constraints, propelling inflation to levels not seen in 40 years. While Trump and his allies often deflect responsibility to Biden, it is critical to recognize that the roots of this inflationary period lay entwined with policies implemented while he was in office.
Moreover, Trump’s economic strategy allowed the Federal Reserve to expand its balance sheet significantly, resulting in systemic fiscal irresponsibility. Between 2019 and the peak of inflation in 2022, the Fed’s balance sheet skyrocketed by $5.18 trillion, with a large portion of that occurring under Trump’s tenure. The ramifications of his administration’s fiscal policies are inherently interconnected with the inflation crisis facing Americans today. The substantial rise in government spending initiated by Trump, alongside the Federal Reserve’s accommodating monetary policies, combined to create economic conditions that fueled inflation. He must be held accountable for the dire economic realities rather than allowing his successors or political adversaries to bear the blame.
In contrast, the Harris-Biden administration’s solutions to confronting inflation appear equally misguided. Harris’s simplistic proposals to combat price gouging, aimed primarily at grocery chains, fail to address the fundamental economic drivers behind inflation. Rather than looking at the root causes of price increases, such measures risk misplacing fault and diverting attention from the critical issues at play. The actual price increases in the food supply chain suggest that the issues at play are driven by production and supply chain disruptions rather than predatory practices at retail levels. Any comprehensive approach to inflation must recognize and address the complex interplay of global supply chains, monetary and fiscal policy, and consumer behavior rather than simplifying the challenges to mere pricing strategies.
Ultimately, both political narratives fall short of acknowledging the broader complexities of the U.S. economy. Instead of focusing on the economic achievements or failures of past administrations in isolation, there is a pressing need for a nuanced understanding of economic dynamics that transcend presidential terms. The decisions made in Washington—including pandemic responses and monetary policies—have left an indelible mark on the economic landscape, and as the presidential election approaches, political leaders must grapple honestly with their roles in the unfolding economic realities. Attempts to scapegoat opponents under the current administration or to claim unwarranted economic triumphs will do little to ameliorate the true challenges facing American households. It is crucial for political leaders to pivot from finger-pointing to implementing responsible policies that will address the economic issues confronting the nation holistically.
