While some say that investigative journalism is dead, the mainstream media is hot on the case when it comes to solving one of the most perplexing mysteries of our day: How can the economy be so good, and yet Americans think it’s so bad?

A recent Harris poll found that just 31 percent of registered voters believe that the economy is “on the right track.” That’s the same percentage (in the same poll) who said that Joe Biden is “showing he is fit to be president” rather than “showing he is too old.” Yet the press continues to assure readers that the economy is steaming along like a powerful locomotive.

“The economic news in 2023 was almost miraculously good,” the New York Times’s Paul Krugman enthuses, as the American “economy continues to look like an amazing success story.” The title of a Financial Times article emphasizes the “strange lack of electoral reward for the success of Bidenomics.” CNN’s MJ Lee reports that the president himself is confused by the “significant gulf” between an economy that seems to be “humming along” and “the public’s stubbornly grim sentiment.”

In an article for Time, Lee Drutman opines that the disconnect between the economy’s performance and voters’ attitudes “is bad news for our democracy,” as it “means that performance doesn’t matter for presidential incumbents.” Walking out even further on a limb, MSNBC’s Stephanie Ruhle asks, “Is it the ‘economy’ Americans are talking about, or is that code for life itself? In other words, how do people feel about life right now? . . . Here’s an example: Connecting with friends and family.” Who knew that the perceived shortcomings of the economy are really attributable to shortfalls in personal intimacy?

There’s a more straightforward explanation for the dour public mood: Americans really, really don’t like it when the prices of seemingly everything—groceries, Big Macs, gas, airplane tickets, houses, and more—are noticeably higher than they were just a few years ago. While Krugman may characterize a 3.4 percent increase in consumer prices over the 12-month period ending this past December as “plunging inflation,” most Americans likely just noticed that prices, already quite high at the start of 2023, were even higher by year’s end.

According to figures from the Bureau of Labor Statistics, reflecting the Consumer Price Index “for all urban consumers,” Biden has presided over inflation numbers through the first three years of his presidency that were higher than those of all but one other elected president in the past 100 years. This period spans 15 elected presidents from 1924 onward.

Here’s how much $100 was worth 36 months after each president’s inauguration following his initial election to the presidency (presidents prior to the mid-1930s were inaugurated in March), in reverse order of value:

15. Jimmy Carter (1977–1980): $75.19

14. Joe Biden (2021–2024): $84.81

13. Ronald Reagan (1981–1984): $85.38

12. Richard Nixon (1969–1972): $86.62

11. George H. W. Bush (1989–1992): $87.69

10. Harry Truman (1949–1952): $90.57

9. Lyndon Johnson (1965–1968): $91.50

8. Franklin Roosevelt (1933–1936): $91.97

7. Bill Clinton (1993–1996): $92.36

6. Barack Obama (2009–2012): $93.15

5. Donald Trump (2017–2020): $94.13

4. George W. Bush (2001–2004): $94.55

3. Dwight Eisenhower (1953–1956): $99.25

2. Calvin Coolidge (1925–1928): $101.17

1. Herbert Hoover (1929–1932): $121.43

Presidents Calvin Coolidge, Harry Truman, and Lyndon Johnson all took office upon the death of a sitting president, but the figures cited here reflect their first three years after being elected in their own right. John F. Kennedy isn’t included because he didn’t have the opportunity to serve a full 36 months. But across his 34 months, $100 in January 1961 became worth $96.75 in November 1963, losing less value than it did under all but three presidents on the list. Herbert Hoover is the obvious outlier, highlighting how extreme deflation—in the throes of a depression—can be even worse than inflation.

Over the past century, only in the wake of Jimmy Carter’s election and inauguration has Americans’ hard-earned money lost more value than it did after Biden’s. Carter and Biden are the only two newly elected presidents in the past 100 years under whom Americans’ money lost more than 15 percent of its value in their first three years in office.

Voters likely gave Ronald Reagan, sitting in the next position, something of a pass because they knew that Carter-era inflation couldn’t be tamed overnight. Indeed, Reagan brought inflation, which had been 11.8 percent the year before he took office (January 1980–January 1981), down to 4.2 percent during his third year as president (January 1983–January 1984). In marked contrast, inflation during the first three years under Biden was more than double what it was during the first three years under Donald Trump, Barack Obama, or George W. Bush; inflation the year before Biden took office (January 2020–January 2021) was just 1.4 percent. It then spiked to more than five times that amount during the first year of Biden’s presidency from January 2021 to January 2022 and was still more than double that amount from January 2023 to January 2024, in Biden’s third year.

What’s more, the recent inflation can be traced in part to profligate federal spending. According to the Congressional Budget Office (see Table A-1), the Covid-19 stimulus package that President Biden championed and signed into law in 2021 added $1.115 trillion to the deficit that year, bringing the total 2021 deficit to $2.8 trillion. As a result, according to the White House Historical Tables, deficit spending in 2021 alone surpassed total deficit spending across all four years of World War II combined, even after adjusting for inflation (see Table 1.3).

Then, in 2022 and 2023, the federal government logged its sixth- and seventh-highest inflation-adjusted deficits in American history, both of which surpassed $1.3 trillion in current dollars. These 13-figure deficits were on top of the record-setting $3.1 trillion deficit in 2020, on President Trump’s watch. Adding it all up, during the past four years the federal government has racked up $9 trillion in deficit spending—more than twice as much, even after adjusting for inflation, as it did during the four years of World War II.

With such huge sums of borrowed money sloshing around in the economy, inflation has predictably ensued. Not only are Americans facing higher prices but also, in a related development, they’re racking up more credit-card debt. Americans’ credit-card debt has surpassed $1 trillion for the first time, hitting an all-time high of $1.13 trillion in the most recent quarter, up $50 billion (and 4.6 percent) from the prior quarter. That’s a whopping 47 percent increase from Americans’ $770 billion credit-card tab during the quarter in which Biden took office.

Moreover, 30-year mortgage rates stood at 6.9 percent as of George Washington’s birthday this year, the highest in more than two decades—way up from just 2.8 percent in January 2021. Such high rates discourage people from selling their houses (because they’ll likely have to buy another one at a much higher rate), thus reducing housing inventory, which makes it harder for prospective first-time homebuyers to enter the market. None of this sounds like an economy that’s “humming along” or is “almost miraculously good.”

Yet Krugman and other left-leaning observers are surprised that people aren’t pleased that prices rose abruptly and then have kept on rising, albeit at a slower rate over time. Perhaps those living in the D.C.–New York bubble don’t really notice the effects of the second-worst inflation under a newly elected president since 1924. Everyday Americans surely do.

Photo by Chip Somodevilla/Getty Images


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