Biden-Harris vs. Trump: Who Really Had the Better Economy?

Transcript

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So, all this to say, there are a lot of factors that drive inflation.

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Could some of it have come from Biden-Harris' spending?

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Sure, but that doesn't explain how it happened globally.

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And do corporations use the rising prices from supply chain issues during the pandemic to keep profit high even when supply chain costs came down?

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Yes, we know they did.

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Welcome back to the United she Stands podcast the show that brings kindness and women into politics.

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I'm Ashley and I'm Sarah, and we're two women from Ohio who are here to become more educated about American politics and build a community so we can all get involved and make an impact together.

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We hope we'll inspire and empower you along the way.

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Hello and welcome back to the United she Stands podcast.

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Based on several polls, the US economy is the biggest issue to voters this election.

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In a recent CBS poll, 83% of those polled said it was a major factor this election season and in a Newsweek poll from mid-July, 60% of poll respondents said the economy was the most important issue facing the country right now.

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Since it's the most pressing issue, let's talk about it in relation to each of our candidates.

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Now, the cool thing about this election is we can actually look back at both the Trump administration's and the Biden and Harris administration's record and yes, we know it was Biden's presidency, but Harris was a part of this administration and all signs are pointing to Harris adopting many of the same economic policies that Biden did so with that said, we're going to discuss today who really had the better economy Trump or the Biden and Harris administration.

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The burning question.

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So measuring the economy is tough and nuanced and can be difficult to understand for everyday folks.

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So, for the sake of today, we're going to look at a few different factors that are commonly looked at when trying to understand how the economy is doing.

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And I know this might be a little annoying or boring, depending on what you like, but we first need to do a little Econ 101 to explain some of the things we'll be discussing today when it comes to measuring or evaluating the state of our economy.

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Yeah, so let's start with job growth.

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Job growth is measured monthly in the US by the number of employees added to non-farm payrolls.

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And what is non-farm payroll, you might ask?

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It is a measure of the number of workers in the US, except for those who work in farming, private households, nonprofits, sole proprietorships or who are self-employed, as well as those who are active military service members, and this measure is a key indicator of the pace of economic expansion.

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So, moving on to unemployment, unemployment refers to a situation where a person actively searches for employment but is unable to find work.

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The most frequently used measure of unemployment is the unemployment rate, which we will be talking about.

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It's calculated by dividing the number of unemployed people by the number of people in the labor force.

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Unemployment is considered to be a key measure of the health of the economy.

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High rates of unemployment signal economic distress, while extremely low rates of unemployment may signal an overheated economy.

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Because of this, you typically want to see unemployment rates between 3% and 5%.

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We are also going to look at inflation-adjusted incomes, corporate profits, stock market performance, our country's debt and the deficit during each presidency.

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And real quick, let's just make a distinction between debt and deficit.

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When we talk about debt today, we are referring to the total amount of money owed by our government, and when we talk about the deficit, we are talking about the annual or yearly shortfall between spending and tax revenue.

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Aka, how much more did our federal government spend versus how much they brought our federal government spend versus how much they brought in?

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Okay, mini econ class over.

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Are we ready to dive into it?

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Let's do it.

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We're going to start with Trump's presidency, and for each review here, we first need to talk about the state of the economy each president inherited when they took office.

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Trump arrived in office when the economy was already pretty strong.

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Obama had the unfortunate and unique disadvantage of taking office in the midst of the worst financial crisis since the Great Depression, but that economy rebounded during Obama's time in office, so ultimately, obama handed Trump an economy that had been on the up and up for several years.

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Under the Obama administration, the economy gained a net 11.6 million jobs, 2 million of which were gained in his last term, before Trump took office in 2016.

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The unemployment rate dropped below the historical norm and was at 4.7% when Trump took office.

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So by the time Obama left office, the inflation-adjusted incomes of American households reached the highest level ever recorded at the time, an overall gain for him of 5.3%.

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After-tax corporate profits also set records, as did stock prices.

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The S&P 500 index rose 166% over Obama's eight years.

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Among post-war administrations that's second only to the 209% rise in the S&P index during Clinton's two terms.

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So when Trump took office, the stock market was already doing extremely well.

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Lastly, let's look at what Trump inherited in debt.

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On the day Obama left office, the US government's debt owed to the public was more than $14.4 trillion.

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The federal debt owed to the public rose 128% in eight years and deficits each year were rising as Obama departed.

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So, in summary, when Trump took office, just about everything on the economic front income, job growth, unemployment and the stock market were all doing really well.

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Okay, so now let's talk about the economy during Trump's presidency.

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Throughout it, the economy was overall good, but not the greatest thing ever.

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Like you know, you'll hear him talk about all the time.

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For the sake of argument here and to try to be as fair as possible, we are going to look at Trump's numbers as of October 2019 to start, so we just think this gives a fairer view of the economy before the global pandemic hit.

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So through October 2019, the economy grew modestly, but it was slowing down under Trump's watch even before the pandemic.

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The US added less than 2 million jobs in 2019, which is the lowest annual growth since we bounced back from the financial crisis under Obama.

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Overall, up until this point in time, the average monthly gain under Trump was 188,000 jobs, compared with an average monthly gain of 217,000 during Obama's second term.

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So this is good, but nothing exceedingly great, or not?

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You know the greatest jobs president of all time that he claims?

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The unemployment rate, which, like we mentioned, was well below the historical norm when Trump took office, continued to fall to the lowest rate in nearly half a century at 3.5%, down 1.2% from when he took office.

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The stock market also saw significant growth under Trump.

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Stock prices continued their decade-long rise with Trump in office.

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This upward trend was another thing that Trump inherited, as we had seen growth since the market began rebounding from the depths of the Great Recession in 2009.

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So, overall, based on these numbers, before the pandemic, trump did have a good economy.

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Now let's look at his actual policies to see how much of that economy was really his doing.

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Some of Trump's signature economic policies have been found to have had little to no measurable effect on the economy, with a few possibly even hurting the economy.

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Multiple studies have shown that the Trump tariffs at best had a neutral effect on the economy and, at worst, cost America hundreds of thousands of jobs and higher prices for consumers.

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And those 2017 tax cuts he always boasts about?

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You know?

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They were touted as an increased investment in the economy and, while they did contribute to modest wage growth in the short term, they fell far short of Republicans' promises that they would pay for themselves.

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In fact, trump's tax cuts are projected to significantly raise our federal debt and increase income inequality aka, the rich benefited the most from those tax cuts.

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Because of this, these tax cuts are generally viewed as a failure in regards to helping anyone other than the wealthy and corporations.

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Okay, moving on to Biden and Harris's administration, we're going to break it down in the same way.

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So let's look at the state of the economy they were handed when they took office, and to do that, we have to go back to where we left off with Trump's numbers in 2019.

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Remember, we didn't count the pandemic in there so we could try to paint a fair picture of what normal life was like in Trump's economy.

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But to paint that same fair picture, we do have to go into the pandemic now and talk about the state the economy was left in by the Trump administration, so we understand what Biden and Harris were really walking into.

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Yeah, so these numbers are for Trump's term in total, so they are net numbers over his four years.

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By the end of Trump's presidency in January of 2021, the economy had lost 2.7 million jobs.

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Coal production, specifically, had declined 26.5% and coal mining jobs dropped by 25%.

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The unemployment rate had increased from when he took office by 1.7 percentage points up to 6.4%.

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Paychecks had grown faster than inflation, with average weekly earnings for all workers up 8.4%.

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After-tax corporate profits were also up and like during Obama's presidency before him, the stock market did set new records.

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The international trade deficit Trump promised to reduce went up.

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The US trade deficit in goods and services in 2020 was the highest since 2008 and increased 36.3% from before he took office in 2016.

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And the federal debt went up from $14.4 trillion to $21.6 trillion.

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Lastly, home prices rose 27.5% during Trump's presidency.

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At the end of the Trump presidency, the country was in a recession from the COVID-19 pandemic.

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So this is what Biden and Harris walked into a country that was really not in great shape in many ways, including the economy.

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They faced the immediate task of heading off a recession as the country started to bounce back from the pandemic.

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And the US did recover from that pandemic economic slump and has seen a strong economy under Biden and Harris.

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So let's talk about their numbers.

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The numbers.

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So obviously Biden and Harris are still in office, so we do not have final numbers for their entire term, but we do have numbers as of July 2024.

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Let's start with job growth.

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Throughout their administration, the economy has added a record 15.7 million jobs.

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Now.

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Some of that was fueled by the COVID-19 recovery efforts as vaccines became available and the country opened back up.

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But putting these pandemic recovery jobs aside to try to fairly represent what they've done, their administration has still seen significant job growth, as there are now 6.3 million more jobs than before the pandemic.

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The unemployment rate has stayed lower longer under this administration than at any time during Trump's administration, and in February of 2023, the unemployment rate was 3.4%, which is the lowest it's been since 1969.

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Apart from housing, which we aren't really going to talk about in today's episode, inflation is really the negative.

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During the Biden and Harris term, average weekly earnings haven't kept pace with prices, so after adjusting for inflation, weekly earnings have dropped by 2.3%.

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Inflation was much lower under Trump, never topping an annual rate of 2.4%.

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The annual rate reached as high as 8% in 2022 under Biden and Harris and is currently at 3.4%.

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And we didn't talk about inflation during Trump's section today, so let's compare that for a minute here.

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Trump entered the White House with inflation already low, largely because of the slow recovery from the Great Recession in 2009.

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The inflation rate barely averaged more than 1% during Obama's second term.

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As the Federal Reserve, aka the Fed, tried to push up growth, the economy was expanding, but not too quickly, which is good.

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In the first three years of Trump's presidency, inflation averaged 2.1%, which is roughly close to the Fed's target.

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Still, the Federal Reserve began to hike its own benchmark rate up during his time to keep inflation low.

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Trump repeatedly criticized the Fed for the rate because he wanted to juice growth despite the risks of higher prices, aka inflation.

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Then we had the pandemic Inflation sank and the Fed slashed rates to sustain the economy during lockdowns.

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So when you hear Trump celebrate his economy and specifically historically low mortgage rates, he's doing so because the economy was weakened by the pandemic.

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Similarly, gasoline prices fell below an average of $2 a gallon because no one was driving in April of 2020 as the pandemic spread.

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So back to inflation.

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During the Biden and Harris term, let's remember they were navigating a recession.

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When they entered office In March of 2021, they signed the nearly $2 trillion American Rescue Plan, which was designed to free the US economy from the pandemic's grip once and for all.

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When that bill was signed, annual inflation was only at 1.7%.

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Now, a few years later, there's general consensus that the Rescue Plan, which pumped money into the economy, spurred the fastest recovery of any group of seven nations, aka, we came out of the recession the fastest among countries like Canada, Japan, Italy, France, Germany and the UK.

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But what about inflation?

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Well, it wasn't a problem unique to America.

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While some argue that all the spending Biden and Harris did helped ignite the large jump in inflation, the US did manage to curb inflation faster than other economically developed countries, while also maintaining much lower levels of unemployment and higher wage growth.

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Now, let's remember, the Federal Reserve absolutely plays a part in this, just like they did when inflation was low during Trump's presidency.

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But with that said, biden also has a very successful legislative record, including the bipartisan infrastructure law and the CHIPS Act laws that experts say have helped and will continue to help bolster the economy, and he took steps to reduce pandemic-induced pressure on supply chains years back, making things like truck drivers getting licenses and major ports to operate nonstop.

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All things that helped keep the economy moving.

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Now another important note here on Biden and Harris's economy is that corporate profits are up 36% and, yes, this is good for business.

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But many are now also arguing that corporations used inflation as an excuse to keep prices high, especially prices like groceries.

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During the pandemic.

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Economists generally agreed supply chain shortages initially caused price increases.

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After supply chains were ironed out, the dispute began on the cause of higher prices.

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The website Accountableus and former Labor Secretary Robert Reich says companies have been raising prices on Americans to reward stockholders with dividends and stock buybacks, and stock buybacks In quotes.

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Here Reich said consumers are getting shafted as corporations tell Wall Street they expect it to be able to keep their prices and profits in the stratosphere, and he wrote that in June 2024.

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The Groundwork Collaborative, a nonprofit that earlier this year said climate change, corporate consolidation and profiteering are reasons grocery prices remain high.

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Even quantified that claim in January by how much corporate greed contributed to inflation In the middle of 2023, corporate profit margins accounted for roughly half of inflation and more than a third since the pandemic began.

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So all this to say there are a lot of factors that drive inflation.

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Could some of it have come from Biden-Harris's spending?

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Sure, but that doesn't explain how it happened globally.

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And do corporations use the rising prices from supply chain issues during the pandemic to keep profit high even when supply chain costs came down?

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Yes, we know they did.

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Lastly, on the Biden and Harris administration, we're going to touch on deficit and debt.

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As a reminder, from the beginning of Donald Trump's presidency in 2017 to its end in 2021, the national debt increased by 40.43%, and that equates to about $8.18 trillion, according to the US Treasury Department.

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As of April 2024, the national debt has grown by about $6.17 trillion, or about 21.7% since Biden and Harris have taken office.

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So, even with all their spending, Trump added more debt than this administration has.

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Okay, there's a shit ton of numbers and stats and a bit of recent history we just went through.

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Should we try to summarize it?

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Let's do it Okay.

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Trump arrived in office when the economy was already pretty strong.

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The economy continued to grow modestly on his watch until the pandemic hit in 2020.

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And after that, his stimulus checks kind of kept it afloat for a little while.

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During Trump's presidency, some of his signature economic policies had little to no measurable effect on the economy, and few might have even heard it.

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Trump's tariffs at best had a neutral effect on the economy and, at worst, cost America hundreds of thousands of jobs and higher prices for consumers.

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And, as 2017 tax cuts increased income inequality and didn't really help anyone other than the wealthy and corporations.

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Biden and Harris, on the other hand, walked into a recession as the country was in the pandemic.

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Under their administration, the US did recover.

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They've seen better job growth and unemployment than during the Trump years, even with pandemic numbers removed.

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Inflation, which happened worldwide, was curbed faster under their watch than other economically developed countries.

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They also have been very successful with legislation.

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This includes the bipartisan infrastructure law and the CHIPS Act, laws that have bolstered and will continue to bolster the economy.

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At the end of the day, the Biden and Harris and the Trump economies were both really pretty good based on the data.

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The difference really is that Trump was handed a good economy and he basically just didn't have to mess it up.

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Harris and Biden were handed a recession and they had to put in the work to get us back to where we are today.

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So, yeah, there it is.

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Thanks for joining us.

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We hope this better equips you to understand the economy under each administration, based on their past actions, and what we could likely expect from them if they had another four years in office.

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The best way you can support us is by sharing this episode with friends and family, and you know the other cool part.

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It also helps them get more informed and is good for democracy.

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I mean, like, come on, that's like a win, win, win, win, win situation.

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So many wins in that, yes, so thank you, thank you and we will see you next week.

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Thanks guys, thanks for joining us for today's episode.

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We really appreciate the support.

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We would also really appreciate it if you hit the follow button and share this episode with anyone you think would enjoy it.

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And we'd like to thank Kevin Tanner, who edited this episode.

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If you're interested in learning more about him and his services, his website and Instagram are in the show notes With that we'll see you next week.

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Remember when we did that episode and it was just so hard to say.

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I think I wrote the fed the rest of the way I think I only make us say it like one time, because I might have, I might have it one more spot, but I tried to just do like the fed, the fed, the fed nice, okay, okay.

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I'm off by a couple zeros, just just a few while also maintaining much lower levels of unemployment and higher wage growth growth growth during the pandemic.

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Economists I mean, we've heard the word economy so many times, so I feel like it's just like I know it's like the english language is so crazy, like just add, like a different ending, and you kind of have to pronounce the word totally yeah, yeah, it's so crazy, oh okay.