On the Economy, Joe Biden Isn’t Even Trying

A t some point, you have to ask whether Joe Biden and congressional Democrats are even trying anymore on the economy. Or perhaps they have just internalized the theory that bad economic news increases demand for government spending and services, so why not just focus on capitalizing on that rather than doing anything to help?

Recent economic news has been grim, with bad news on a staggering array of fronts:

• On economic growth, the big engine that drives everything else, GDP growth dropped off to a 2 percent annual rate in the third quarter — an abrupt reversal from 6.7 percent in the second quarter and the slowest rate of growth since the pandemic hit last spring.
• On jobs, we have now had two consecutive deeply disappointing jobs reports. The August jobs report saw the economy add 235,000 new jobs compared with economists’ expectations of 728,000 additions. The September jobs report saw the economy add just 194,000 jobs, compared with the 500,000 expected by economists. (Florida alone added almost 73,000 private-sector jobs in September, to give some idea of how the rest of the country is faring.)
• Slow job growth is not due to a lack of employers looking to hire. As of late July, there were a record 11 million job openings, and employers across the country have complained of labor shortages. Help-wanted signs and ads are everywhere; 3 million people quit their jobs in August, nearly 3 percent of the workforce. Over 300,000 women dropped out of the labor force in September.
• Inflation continues to be visible and painful, with an annualized rate of 5.4 percent in three of the past four months, and an increase from August to September that was greater than the increase from July to August — not an easy feat to manage while economic growth is slowing. Treasury secretary Janet Yellen now concedes that she expects inflation to persist into the “middle to end” of 2022. This contradicts Biden’s rosy assurances over the summer that it was transitory. A recent international study found that, while inflation is a problem around the world in the aftermath of the pandemic lockdowns, it is worse in the United States.
• In addition to rising prices, consumers and retailers now have to deal with a supply-chain crisis that threatens to make many goods unavailable in time for the Christmas shopping season. As Mario Loyola notes of the many obstacles placed by regulatory and labor restrictions on our ports and shipping, “a recent review of container-port efficiency ranked the ports of Los Angeles and Long Beach below ports in Tanzania and Kenya, near the bottom of the list of 351 top ports. America’s ports are effectively third-world. The 50 most efficient ports in the world are mostly in Asia and the Middle East; none are in America.” For the past 16 years, California’s regulatory and environmental restrictions have blocked BNSF from building a new railway yard to improve the speed and efficiency of the LA and Long Beach ports, which collectively handle the largest volume of shipping in the country.

Add this all up — slow growth, slow job growth, people leaving the workforce, employers struggling to find help, prices surging, supplies stalled, shelves empty — and you would think that getting the economy moving again in the right direction would be a three-alarm fire for any White House. Bill Clinton would be personally taping up “It’s the Economy, Stupid” signs all over the West Wing. But what are Biden and his party up to?

His remarks on the jobs report focused on COVID and avoided any mention of labor shortages. Democratic groups bragged instead that new unemployment claims were falling after extended unemployment benefits ended:

Biden’s revised “Build Back Better” framework, released this morning, proposes — even if you believe its numbers — to raise another $2 trillion in government revenues, most of it from new taxes on American businesses and their major shareholders, to go with an additional $1.75 trillion in government spending, most of it on welfare benefits. Instead of trying to get businesses back on their feet, Biden is looking to squeeze more cash out of the private economy and make permanent more government handouts. The theory here seems to be that we can’t really fix anything, we can only pay people to get more comfortable stuck where they are.

What is Biden’s next move? He’s jetting off to Europe to talk about restricting economic activity to fight climate change.

Then there’s Biden’s plan for the supply-chain crisis: slap big fines on ships that are stuck in the harbor desperate to find somebody to unload their cargo. This blame-the-victim approach does nothing to increase the unloading and carrying capacity of American ports, and is almost certain to make things worse by raising the cost of shipping to America and forcing some incoming shippers to give up. Meanwhile, his secretary of transportation, who is supposed to be focused on the task force to fix the supply-chain crisis, instead “is aiming to use the fierce criticism he faced from conservatives over taking paternity leave as a way to have a conversation about the issue, amid efforts from the White House to get paid family leave into a social spending bill pending in Congress.” That will clear the ports!

Contrast this with the attitudes that Patrick Brown described in the New York Times last month from his surveys of working-class families:

Working-class parents don’t want to dramatically increase or shrink the size of government but want to improve how it works on their behalf — to make work pay, expand the options available to them and help them afford the ever-increasing cost of living. . . . Work made a family deserving of government support; without it, family benefits were seen as welfare. . . . Even the more self-described progressive parents tended to not want government-run child care programs, preferring vouchers or tax credits. Our participants also recognized trade-offs; most were in favor of raising the minimum wage but were quick to note the negative effects too large an increase could have on the economy.

There are obviously a wide range of voter attitudes about big government, but almost universally, Americans still want a vibrant economy in which people work for pay, which can then be used to buy the things people want and need. A bad economy has always been the thing most likely to politically harm the party in power. In the long run, not only is a strong, work-based private-sector economy a source of personal dignity and self-improvement, it is also necessary to produce the money that Democrats want to extract from that economy and spend through the government.

At this point, you have to wonder whether this White House has completely given up on the economy, and whether there is anybody left in it who even notices the complete absence of pro-growth, pro-jobs policies.