THE COVID EFFECT IS A LINGERING VARIABLE IN THE ECONOMY THAT BOTH PARTIES ARE SELECTIVELY USING, OR NOT USING, TO THEIR ADVANTAGE
Presidents have much less power than we think they do as far as the economy is concerned.
Why is the GOP so quick to give Trump a pass on the high unemployment during his administration due to COVID, but not give Biden a pass on the high inflation as COVID faded and everyone went back to work, spent a fortune during the same time that China shut down?
Trump can no more be blamed for COVID slamming our economy than Biden can be blamed for the economic tidal wave of recovery and the ensuing consumer spending boom that caused inflation to rise precipitously.
Consumer spending shot up in 2021 and 2022 as did inflation. Americans had cash in hand as a result of the two massive influxes from both Trump in March of 2020 and Biden the next year.
At the same time, China was shutting down thousands of factories in later 2021 and 2022. It doesn’t take a Nobel Prize winning economist to see that high demand and low production leads to shortages all around with the ensuing higher prices. Simple Economics 101 with supply and demand.
China’s GDP fell drastically while Americans were spending at a furious rate. The fed thought this was transitory, but it ended up being longer term, hence the weapon of choice was employed, higher interest rates. That strategy has been working as inflation has come down.
Unemployment is also rising from its low, slightly, as the economy cools along with inflation. Are we in a soft landing? It’s hard to say until a year from now if we haven’t seen higher unemployment and a depression.
Presidents get blame or credit for whatever happens during their administrations, regardless of the merits, but we can’t selectively take the credit and not the blame or blame the other and not give them credit.
Good and bad things happened during the Trump presidency concerning the economy. That’s a fact. The same can be said for Biden with both good and bad economic indicators.
We can’t cherry pick. A more honest admission that President’s are often simply the person in the Whitehouse as sh*t happens. Blame them or praise them, but sometimes they are simply placeholders with no real impact.
It’s hard for blind partisans, on either side, to understand and admit this fact of life, that a President does not have the almighty power we often fantasize about the office.
A simple look at these charts tells the unvarnished story of the last five years with Consumer Spending, China’s GDB, as we get so much from them, Core Inflation and unemployment. The overlapping of these indicators during mid 2020 to now is instructive.
These are not Red or Blue numbers, but simply the raw numbers over that period. Our debt to GDP shot up in 2020 due to the $Trillion of recovery spending. It’s continued to be high, but coming down as the economy has fully recovered.