Guest post by Antonio Grisifo
The economy is booming, and “the bioeconomy is working,” as the White House has claimed, but most Americans are suffering as if we were in the 1970s again.
Here's how they intentionally distort the numbers to make the economy look better than you know it.
In 2021, when the United States eased lockdowns, the economy rebounded, reaching GDP growth of 5.9%. So, technically, yes, under Biden, the economy went up, but that's only because the economy went negative when Fauci shut it down.
It had nowhere to go but up, and the so-called collapse and growth were artificially caused by government policies. Despite only one exceptional year of excellent growth, and a subsequent return to normal in GDP, the four-year average remains exceptionally high because of that remarkable year.
Furthermore, with only three years of data available, including growth of 5.9% in 2021, 1.9% in 2022, and 2.5% in 2023, the average growth rate is 3.43%, and Biden gets 71% better than the usual average of 2%. .
Inflation statistics are another area where the White House plays. US inflation under Biden has been worse than it has been in the last 40 years. However, the White House claims that inflation is down, and it is.
It peaked in June 2022 at 9.1% and fell to 3.4% in 2023. Normally, the Fed targets an inflation rate of around 2%, so 3.4% is still too high. However, Biden can claim that he succeeded in reducing inflation by 62%, which is amazing! Who other president could make this claim? At the same time, the inflation rate remains about 70% higher than the normal rate.
There is another important point that the White House ignores, which is that reducing inflation is not the same as lowering prices. When Biden claims that he has succeeded in reducing inflation, all he has actually reduced is the rate at which prices are rising.
Prices are still rising, but more slowly. Inflation works like compound interest, which was once said to be the most powerful force in the universe. Since Biden took office, cumulative inflation has reached about 18%. This means that most products you buy now cost 18% more than they did under Trump.
To make matters worse, many daily necessities have their own inflation rate, which is much higher than average inflation. The price of gasoline rose by 38.8% from 2021 to 2023. New car prices rose by 13.5%. Median home sale prices increased by 25.4%. Overall, food prices rose by 10.6%.
While product prices have risen, wages have not kept pace. According to the Bureau of Labor Statistics, cumulative wage growth from 2021 to 2023 is 14.5%. However, taking inflation into account makes wage growth negative.
Your salary rose by 14.5%, while product prices rose by 18%. As a result, your purchasing power is diminished. If you rely on credit for purchases, they become more expensive.
The Federal Reserve's interest rate, set at zero in 2021, has now risen to 4.75%. The average interest rate on home loans increased from 3.1% to 6.54%. Likewise, the interest rate on new car loans increased from 5.07% to 7.03%. Worst of all, interest rates on used car loans have skyrocketed, jumping from 6.71% to 11.35%.
Anyone searching for a job or seeking to maintain a job and support a family understands that the labor market is tight, with widespread layoffs occurring. However, the official unemployment figure of 3.7% looks questionable.
First, the Bureau of Labor Statistics considers you employed even if you work only one hour per week, without benefits. As a result, many companies avoid layoffs by reducing benefits and hours. Although this strategy prevents a shift in statistics, it leaves individuals worse off financially.
Official unemployment fell from 5.3% in 2021 to 3.7% in 2023, enabling Biden to claim a 30% reduction in unemployment. However, unemployment only includes individuals who are actively looking for work. Those who have left the workforce, and simply given up, are not taken into account.
Under Biden, the number of individuals in this category has increased. The labor force participation rate was 61.7% in 2020 but dwindled to 60.8% in 2023. With the US labor force at about 167 million people, nearly 1.5 million people have given up under Biden and stopped trying.
If Biden's economics is a success, as the White House claims, his intention must have been to raise prices, take people out of the labor market, and lower the standard of living, because that has been the experience of most Americans.
Dr. Antonio Grisifo, Ph.D., MBA China, is an economist and national security analyst with a focus on China and Russia. He is a graduate of the American Military University.
