President Joe Biden will soon announce that he will run for a second term.  Here’s the Democratic best-case interpretation of the performance of the Biden Administration during its first two years in power.[1] 

            In the view of Brian Deese, the chief economic official in the White House, the Biden Administration has performed very well, if not flawlessly.  The Administration’s 2021 stimulus bill promoted a “strong and equitable economic recovery.”  The Biden Administration also has “invested” in a wide range of industrial and infrastructure initiatives.  Many of these initiatives can be designated as climate-related.  Furthermore, the administration also has launched a hodge-podge of other policies which have not yet born fruit, either sweet or bitter.  Chief among these have been an attack on corporate concentration and talking-up the value of labor unions. 

            There have been failures as well.  Running for office during the Covid emergency, Candidate Joe Biden promised his voters all sorts of new government benefits.[2]  President Joe Biden could not entirely deliver on his promises.  He did deliver a big temporary increase in the child-tax credit. 

            Much more important has been the problem of inflation.  In Democratic reasoning, the American economy has turned in a feeble performance for much of the Twenty-first Century.  Therefore the 2021 stimulus bill erred on the side of optimism.  The Biden Administration did and could not anticipate the large and sustained rise in prices.  However, in the Democratic interpretation, the primary drivers of the inflation were the disruptions of the supply-chain and the spike in energy prices.  The former sprang from the Covid pandemic; the latter from Russia’s attack on Ukraine.  Neither of these could have been anticipated.  In any event, the error had only “somewhat limited consequences.”  Unless you were buying groceries or gassing-up the car. 

            Take a longer view.  The Clinton Administration (1992-2000) held office during—and claimed credit for—a boom/bubble in the tech economy.  Then that bubble burst just after the Bush II (2000-2008) took office.  Hot on the heels came 9/11.  The government poured in money and encouraged Americans to consume, rather than sacrifice for the war effort.  Then the long-ignored housing bubble collapsed.  First the Bush Administration, then the Obama Administration (2008-2016) poured in money to cushion the blow.  Apparently not enough money, because the “Long Recession” dragged on.  Then the Trump Administration (2016-2020) applied big tax cuts and deregulation.  Democrats ridiculed the resulting boom as a ”sugar high.”[3]  Then came Covid and more heavy government spending, first under the Trump Administration and then under the Biden Administration (2020- ). 

            So, in what kind of shape is the long-term private economy?  It looks like many of the spikes in economic activity spring from government stimulus in one guise or another.  If so, then the performance of the underlying “real” economy may not be too solid.  Economists offer complex analyses of this issue.  In layman’s terms, however, the stimuli seem like nostalgia for a bygone age of American economic prowess as much as emergency economic policies. 

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[1] David Leonhardt, “Assessing the Biden Record as His Economic Team Transitions,” NYT, 23 February 2023. 

[2] Universal pre-K, paid family leave, expansion of the child tax-credit, and increased elder care.  At the same time, Biden endorsed many government programs to counter climate change. 

[3] Although it isn’t clear why deficit-expanding tax cuts create that “high,” while deficit-expanding spending doesn’t.