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Tag: biden economy

Why Are Americans Feeling So Bad About A Good Economy?

The U.S. economy is doing its best impression of a Formula One car, racing at high speed while negotiating a series of twists and turns. Last year, real gross domestic product grew faster than any year since 1984, when President Ronald Reagan was running for reelection on the theme, "It's morning in America."

One indicator after another suggests an economy enjoying robust health. Last week, economists were pleasantly surprised when the Bureau of Labor Statistics reported that in January, the economy added 467,000 jobs — despite omicron, which spread across the country with alarming rapidity.

Unemployment remained low at four percent, compared with 6.4% a year before. A record number of people quit their jobs in November, reflecting their confidence that in today's labor market, they can find better ones.

The stock market is up more than 12 percent over the past 12 months. Corporate profits reached a 70-year high in 2021. Federal tax revenues soared by 18 percent in the 2021 fiscal year, as more people made more money.

But ... there's always a "but." As the columnist George Will postulated years ago, all news is economic news, and economic news is always bad. The dominant news in recent months has been inflation, once thought to be permanently vanquished but now making a comeback.

Prices climbed by seven percent last year, the biggest increase since 1982. A recent CNN poll found that 80 percent of Americans regard rising prices as a major problem, and 63 percent think the national economy is in poor shape.

That notion is at odds with reality. In April 2020, when the economy was suffering a pandemic-induced collapse, CNN found, 60% of Americans thought the economy was in bad shape. That the number is higher now than it was then is a testament to the power of negative thinking.

Where does the negative thinking come from? Maybe from the psychological phenomenon known as loss aversion. As Investopedia explains, some research suggests that "the pain of losing is psychologically about twice as powerful as the joy we experience when winning."

Since the pandemic crushed the economy, we have regained nearly 24 million jobs, and growth has rebounded strongly. But those gains get discounted because of what we have lost: stable prices. The joy of a boom doesn't compare to the misery of inflation.

Politics plays a role. Most of the people who voted for Donald Trump in 2020 are not inclined to cheer the state of the economy, because they don't want to think that Joe Biden has done well at managing it. They feel vindicated by every unfavorable development. They bring to mind country artist Patty Loveless, who sang, "You can feel bad if it makes you feel better."

Biden hardly deserves all or even most of the credit for our improving fortunes. The economy is an unpredictable beast over which Washington has only limited control. But he did push through a $1.9 trillion COVID-19 relief package last spring, despite warnings that it could overheat the economy and spark inflation.

Those warnings turned out to be valid. But if you're going to blame Biden's spending for the rise in inflation, you have to give credit to Biden's spending for the surge in economic growth. The outlays served to boost overall demand, which produced both results. Without the relief package, we'd have lower prices but slower growth and higher unemployment.

Much of the gloom about the economy stems from the disruptions caused by the pandemic. Some are economic: snarled supply chains, shortages of some goods, canceled airline flights and other events resulting from workers being infected. But the fear of COVID-19, the obligation to wear a mask and get any number of vaccine shots, and endless uncertainty may do more damage to the national psyche.

We all yearn for a normal life that we fear will never return. And whether we are in the pro-mask, pro-vaccine group or the opposing camp, we are confronted with reminders every time we go out that the other side is an obstacle to what we want. Bitter feelings fester.

In our yearning, we forget that in what we recall as the happy times, we were grumpy. In December 2019, before the first case of COVID-19 in the U.S., Gallup found that 62 percent of Americans were "dissatisfied with the way things are going in the United States at this time."

When you're smiling, the song says, the whole world smiles with you. These days, though, you'll get more company with a scowl.

Follow Steve Chapman on Twitter @SteveChapman13 or at https://www.facebook.com/stevechapman13. To find out more about Steve Chapman and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

Wall Street Ends Tumultuous Year Near Record Highs

By Stephen Culp and Echo Wang

NEW YORK (Reuters) - Wall Street closed near record highs in light trading on Friday, the last trading day of 2021, marking the second year of recovery from a global pandemic.

All three major U.S. stock indexes scored monthly, quarterly and annual gains, notching their biggest three-year advance since 1999.

The S&P 500 gained 27 percent since the last trading day of 2020. Through Thursday, the benchmark index has registered 70 record-high closes, or the second-most ever. Using Refinitiv data back to 1928, the most record-high closes for the S&P 500 in a single year was 77 in 1995.

The Dow added 18.73 percent for the year, and the Nasdaq gained 21.4 percent.

Companies, consumers and the broader economy largely thrived in 2021 as they felt their way forward amid a constantly shifting landscape including a tumultuous transfer of power marked by the Jan. 6 Capitol riot. Other factors included the "meme stock" phenomenon, new COVID-19 variants, a labor shortage, generous fiscal/monetary stimulus, hobbled supply chains, booming demand and the resulting price spikes.

"What stands out to us this year among all the negatives, is the resiliency of Corporate America," said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina. "In a sea of uncertainty and higher prices, you have to be extremely impressed by how agile and adaptive Corporate America was to sport 45% earnings growth in a very difficult year."

Indeed, earnings results from S&P 500 companies blew past analyst estimates to deliver year-on-year growth in the first three quarters of the year of 52.8 percent, 96.3 percent, and 42.6 percent, respectively, according to Refinitiv, which currently sees fourth-quarter annual earnings growth of 22.3 percent.

Energy <.SPNY>, real estate <.SPLRCR> and microchips <.SOX>, sectors associated with economic recovery and booming demand, were among 2021's top performers, with growth stocks' <.IGX> 31% advance handily outperforming the 22% gain in value <.IVX> stocks.

Market-leading tech and tech-adjacent megacap stocks, which outperformed the broader market in the first year of the global health crisis, were laggards as the economy slowly reopened and vaccines were deployed.

The NYSE FANG+ index <.NYFANG>, an equal-weighted group of 10 such stocks, notched a nearly 20 percent advance on the year. Google parent Alphabet Inc <GOOGL.O> posted the biggest annual advance among NYSE FANG+ constituents, enjoying its best year since 2009. [nL4N2TG1PT]

Dow Transports <.DJT>, considered by many a barometer of economic health, registered a yearly gain of more than 31 percent.

Steadily rising Treasury yields - along with a recent hawkish shift from the Federal Reserve, which now foresees as many as three rate hikes in the coming year - have supported interest rate-sensitive financials <.SPSY> which gained nearly 33 percent.

The COVID-19 pandemic, which burst onto the scene in early 2020 and prompted the steepest, quickest economic contraction in history, continues to linger, pressuring travel-related stocks.

The S&P 1500 Airlines index <.SPCOMAIR> ended 2021 as one of the year's few losing sectors with an annual decline of nearly 2%.

But early data suggests the Omicron variant, which has caused an abrupt spike in global infections, is less virulent than its predecessors and economic data is increasingly suggesting a return to normal, two years after the first cases of COVID-19 were reported.

The Dow Jones Industrial Average <.DJI> fell 59.78 points, or 0.16 percent, to 36,338.3, the S&P 500 <.SPX> lost 12.55 points, or 0.26 percent, to 4,766.18 and the Nasdaq Composite <.IXIC> dropped 96.59 points, or 0.61 percent, to 15,644.97.

Volume on U.S. exchanges was 7.6 billion shares, compared with the 10.55 billion average for the full session over the last 20 trading days.

Of the 11 major sectors in the S&P 500, consumer staples sector <.SPLRCS> was up the most in Friday's session, with communications services <.SPLRCL> suffering the biggest percentage drop.

Advancing issues outnumbered declining ones on the NYSE by a 1.39-to-1 ratio; on Nasdaq, a 1.18-to-1 ratio favored decliners.

The S&P 500 posted 47 new 52-week highs and no new lows; the Nasdaq Composite recorded 58 new highs and 143 new lows.

((Reporting by Stephen Culp in New York and Echo Wang in Taos, New Mexico; Additional reporting by Medha Singh in Bangalore; Editing by Matthew Lewis and Lisa Shumaker))

Wall Street Slips On New Year's Eve As Market Clocks Robust 2021 Gains

(Reuters) - Wall Street's main indexes were subdued at open on Friday, looking to clock a third straight annual gain in a year fueled by massive stimulus, COVID-19 vaccine rollouts, and a strong retail participation.

The Dow Jones Industrial Average fell 12.23 points, or 0.03 percent, at the open to 36,385.85.

The S&P 500 opened lower by 3.52 points, or 0.07 percent, at 4,775.21, while the Nasdaq Composite dropped 18.66 points, or 0.12 percent, to 15,722.91 at the opening bell.

(Reporting by Medha Singh in Bengaluru; editing by Uttaresh.V)

Don't Look Now, But The Biden Economy Just Happens To Be Glorious

If Joe Biden takes office, there'll be a "depression the likes of which you've never seen," Donald Trump warned a month before he lost the 2020 presidential election. It didn't happen.

You know that, right?

Also, your 401(k) surely did not "go to hell," as the previous guy predicted. On the contrary, stocks in the S&P 500 are up 26 percent as the first year of the Biden presidency is about to end.

How good is that? "U.S. financial markets are outperforming the world by the biggest margin in the 21st century" is how Bloomberg News put it.

The U.S. gross domestic product is expected to have grown an extraordinary 5.6 percent this year, according to economists. And that's after adjusting for inflation.

The unemployment rate is down to 4.2 percent. Retail sales in the recent Christmas shopping season rose eight percent from the same period last year — the biggest gain in 17 years.

As Bloomberg summed it up, "America's economy improved more in Joe Biden's first 12 months than any president during the past 50 years."

And so how do we explain Biden's lackluster approval ratings, weirdly depressed by discontent on how he's managing the economy? The reasons include distorted media coverage of the economy, a Republican opposition that doesn't want to give Democrats credit, and Democrats who don't want to give themselves credit (and for wholly neurotic reasons).

Now, as always, there are economic concerns. Inflation has been cutting into the good news of fattening paychecks for American workers. However, the bubbly retail numbers point to consumers with the means to spend and happy to do it. That consumer credit grew a record 27 percent in Biden's first year reflects public confidence about the future.

The supply chain blockages seem to be easing, as witnessed in the fake news of bare store shelves this shopping season. The difficulty in getting parts and products shipped from Asia has raised interest in bringing manufacturing back into this country, and that is a good thing.

The biggest driver of inflation, oil prices, could very well be headed down. "Much needed relief for tight markets is on the way," according to the International Energy Agency. The simple reason is rising oil production. Helping matters was Biden's planned release of 50 million barrels of oil from the U.S. strategic reserves, with similar steps being taken in other countries.

Why Democrats don't shout hosannas for this basically strong economy has long been a mystery. One explanation is that some of the loudest voices in the party, mainly on the left, engage in a culture of complaint. The lefties obsess angrily on what isn't being done for the poor and ignore what is.

They've been hollering at West Virginia Sen. Joe Manchin for blocking passage of the current Build Back Better plan, even though it is they who screwed it up. All hope is not lost, though. Democrats can trim their overweight wish list, thus avoiding such cheesy tricks as financing the child tax credit for just one year. Manchin does have a point.

The programs most worth saving are universal preschool, strengthening the Affordable Care Act, and fighting climate change. A plan costing $1.8. trillion — a number Manchin has reportedly said he would consider — would still be bold under any previous definition of the word.

Stock market gains do benefit the better-off, but lots of average people have some skin in the game. Sweden has more billionaires per capita than we do while maintaining a dream of a social safety net.

There's nothing wrong with prosperity. "Happy Days Are Here Again" was the campaign song for Franklin D. Roosevelt — just before he launched the New Deal.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators webpage at www.creators.com.

Everything The Press Says About Biden's Economy Is Wrong

Reprinted with permission from PressRun

Want an unvarnished, unfiltered view of the U.S. economy, the kind that you're not seeing from the Beltway press today, as they push panicked inflation updates?

It's simple. Worker wages are up this year as employees enjoy unmatched leverage in the marketplace. Job gains are soaring. And companies are printing profits thanks to sky-high consumer demand —Target's sales spiked 13 percent in the last quarter and the retail giant expects double-digit gains over the holiday shopping season. That's crucial because consumer spending accounts for two-thirds of the economy. All the while, mortgage interest rates hover around 2.5 percent.

The specifics:

• The government dramatically undercounted the number of new jobs from June through September, so we now know an additional 626,000 jobs were created those months, blowing away the idea of a stymied hiring pattern nationwide. Remember the "disappointing" jobs report from August, with 235,000 jobs? It was actually 483,000 new positions. It turns out there's been a jobs explosion this entire year, and all indications are the trend will continue into 2022.

• Goldman Sachs predicts by the end of next year the U.S. unemployment rate will drop to a 50-year low, thanks to a "red-hot demand for workers." Under Trump, the rate peaked at nearly 15 percent.

• Retail sales surged 1.7 percent in the month of October, as consumers flocked online and into stores, splurging on electronics and home-improvement projects. American consumers spent $638 billion in October, a 16 percent increase from last year.

• JP Morgan upgraded its growth expectations for the economy, raising its forecast for the U.S. gross domestic product to climb five percent in the fourth quarter.

• Biden's pandemic stimulus plan has worked: "Households are sitting on a collective $2.5 trillion in savings built up during the pandemic," the New York Times reports.

It's a royal flush of economic good news.

Yes, inflation is up and it's a problem. Nobody likes spending $90 to fill up their SUV at the pump. That's why consumers say their confidence is down, even as they spend at robust rates. Inflation today is a global phenomenon, created by a once-in-a-lifetime pandemic, not Democratic fiscal policy. (It's also being driven by companies taking advantage of a chance to raise prices again and again in 2021.)

The reason inflation has sprouted in the U.S. is because consumer demand is booming as the economy has recovered from Covid faster and stronger under Biden than most people ever thought possible.

What's revealing is how the Beltway media remain overly fixated on inflation, while often turning a blind eye to all the signs of a surging economy. In other words, if it's bad news for Biden, then it's treated as Big News.

By constantly doling out sour economic updates in the form of breathless inflation coverage, the press does the GOP's handiwork. The Washington Post this week announced inflation is the "defining" challenge of Biden's presidency. Why inflation? Because the press decided.

CNN insists inflation remains a "political nightmare for Biden" and claims persistent inflation "could make historically difficult midterm elections next November even harder for Democrats by overshadowing their legislative wins." CNN doesn't think that the millions of new jobs likely created next year and a plummeting unemployment rate will have any impact on the midterm election cycle — only inflation.

Here's what's happened: For weeks this fall, the Beltway press joined forces with the GOP to tell an hysterical tale about the state of the U.S. economy. It was an alternate version of reality, where the stagnant, faltering economy was being driven to the precipice by runaway inflation, which stood poised to demolish middle-class savings across the board. All while an ineffective president stood by and watched cash-strapped households suffer.

It was doomsday nonsense actively pushed by Republicans, who are gleefully rooting against America's interests. Sen. Rick Scott (R-FL) this week told the Wall Street Journal that if inflation pushes up interest rates next year, that would be "a gold mine for us."

The press wasn't holding up a mirror to the U.S. economy. The press painted its own picture. Desperate for a dramatic angle to lure consumers back to TV news and websites, and weirdly anxious to bury Biden, the Beltway media have gone all in on the Doomsday narrative. Remember that corporate media owners benefit from tax breaks when Republicans are in office.

The panicked tale was never true. In recent days, the new data points paint a clearer picture of the economy — it's a surging one that's powering through a stunning pandemic recovery and stands poised to blast off in 2022. An unemployment rate all the way down to 3.5 percent? A stock market sitting at the once-unthinkable 45,000 mark? Both are entirely possible in the next calendar year.

Today's press coverage suggests the economy is an albatross around Biden's political neck. In reality, it's booming.

Fox Poll Shows Broad Support For Biden As GOP Attacks Flop

Reprinted with permission from American Independent

A new Fox News poll released Wednesday shows congressional Republicans are way out of step with the American public. Months of GOP attacks on the President Joe Biden, his economic policies, and COVID-19 safety requirementshave failed to sway most of the American public.

Conducted between August 7 and August 10, the poll surveyed 1,002 registered voters. It found majority support for Biden and all his proposed economic investments.

By a 53 pecrent -- 46 percent majority, voters said they approve of the job Biden is doing as president, much better than any Fox News poll approval rating for Donald Trump over his single term as president.

Asked about the Infrastructure Investment and Jobs Act, the bipartisan plan to invest $550 billion in transportation, broadband, electrical, and water system infrastructure that passed in the Senate on Tuesday, 62 percent said they favor the package, while 30 pecent said they oppose it.

Asked about Democrats' $3.5 trillion plan to "address climate change, healthcare, and child care," 56 percent backed that as well, while 38 percent did not.

Most Senate Republicans voted against the bipartisan infrastructure package, and not one of them backed the budget resolution, the first step toward passing the $3.5 trillion spending package, though previous polling had also shown both measures to be broadly popular.

Across the country, Republicans have also pushed to prohibit governments and businesses from instituting requirements that people get COVID-19 vaccines or wear masks to curb transmission of the coronavirus in schools and indoor workplaces.

But the Fox News poll shows the public backs both.

Asked, "Do you favor or oppose cities and towns requiring all workers and customers to have proof of a coronavirus vaccine for indoor activities such as restaurants, gyms, and performances," 50 percent said they favored those measures and 46 percent said they oppose them.

By a 50 percent -- 47 percent margin, respondents also said that it was more important to protect "the safety of Americans by requiring the vaccine to participate in everyday activities" than "the freedom of Americans to choose whether or not to get vaccinated."

A majority of 54 percent said that schools and school districts should be free to require masks or proof of vaccination for in-person learning; 31 percent said they should not be.

Just 36 percent of those surveyed support the idea that their local public schools should "reopen fully in-person as usual" this fall without requiring masks or social distancing.

Published with permission of The American Independent Foundation.

Biden’s Ambitious Agenda Is More Truman Than FDR

Joe Biden's multitrillion-dollar plans to revive the economy, fix America's infrastructure and ease poverty have spawned comparisons between him and Franklin D. Roosevelt. At the 100-day mark of the Biden presidency, David Gergen, who has advised presidents of both parties, wrote, "Biden is off to an excellent start — arguably, one of the best since Roosevelt."

And Biden hasn't discouraged such talk. He now has a giant portrait of FDR in the Oval Office, right across from the Resolute Desk.

But while there may be likenesses between those two presidents' agendas, the less glamorous Harry Truman also deserves inspirational face time. Truman and Biden both came from modest small-town origins. Unlike the aristocratic Roosevelt, they knew firsthand about middle-class striving.

It's not surprising, then, that the Biden agenda seeks to recreate the Golden Age for the American middle class — the postwar years of 1947 through 1973, when productivity doubled but so did the median compensation of full-time workers. Truman was instrumental in launching it.

Truman understood that the well-being of workers depended on factors beyond the magic of the market. Widespread prosperity needed a third player in addition to business and labor. That player was a government willing to impose social norms through tax policy, the minimum wage, and protection for organized labor.

As World War II was ending, impatient workers launched destabilizing strikes. And so, in November 1945, Truman held a conference to create a new labor policy through which postwar abundance would be broadly shared. The participants came from business, the labor movement and — at Truman's insistence — government.

The business community came eagerly on board. As Eric Johnston, the president of the U.S. Chamber of Commerce, told the conference: "Labor unions are woven into our economic pattern of American life, and collective bargaining is a part of the democratic process. I say recognize this fact not only with our lips but with our hearts."

Truman proposed a national health care plan, which didn't happen, and higher taxes on the top incomes, which did. Biden's agenda both strengthens the Affordable Care Act and seeks to raise taxes on the top incomes.

Unlike Roosevelt's New Deal, Truman's Fair Deal took a strong stance on civil rights. New Deal programs broadly discriminated against Blacks. The National Recovery Administration, for example, gave preferences to white job seekers and allowed lower pay scales for Blacks.

Roosevelt appointed a few Blacks to token jobs. Truman put nonwhites in positions of real power, notably William Henry Hastie, the first African American federal appellate judge.

Biden just announced a racially diverse slate of judicial nominees. It includes sending Judge Ketanji Brown Jackson to the U.S. Court of Appeals for the District of Columbia Circuit, considered a springboard for the Supreme Court.

Biden is pursuing racial equity in some controversial ways. The COVID-19 relief bill includes a $5 billion fund for minority farmers only. And the infrastructure package says that 40 percent of the benefits of clean energy must go to "disadvantaged communities." How that would work is unclear.

The offshoring of American jobs and technological change of course accelerated workers' loss of economic security — and helped end the Golden Age. But the ditching of norms that only government could enforce also played a part.

Ronald Reagan cut taxes on the rich. Then George W. Bush did, and then Donald Trump. The federal minimum wage remains stuck at $7.25 an hour. In 1973, it was equivalent to $9.81 in today's dollars.

Biden seems to be summoning his inner Harry Truman and bringing back the third player. In assuring a stable and happy middle class, the market has a job to do, but so does government.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators webpage at www.creators.com.

Stocks Gain Despite GOP’s Dire Warnings About Biden

Reprinted with permission from Alternet

In addition to proposing an increase of the United States' corporate tax rate from 21 percent to 28 percent, President Joe Biden began a push this week for a major hike in the capital gains tax. Republican Sen. Shelley Moore Caputo of West Virginia and others on the right, not surprisingly, slammed the proposal and predicted the worst, and some on the right felt vindicated when the stock market dipped sharply after Biden's announcement.

But liberal economist and New York Times columnist Paul Krugman noted there was little warrant for their dire predictions on Twitter Friday morning.

Caputo, during a Friday morning appearance on CNBC's Squawk Box complained, "Is there not a tax that's not going to be raised just in enormous amounts to fulfill the Green New Deal and other promises that were made during (Biden's 2020) campaign? I mean, I don't see why the thirst for raising taxes is so incredibly large when we see the impact that's going to have on our economy, on our job creation and all that…. I can't support that."

The Wall Street Journal's conservative editorial board had an equally negative reaction to Biden's proposed capital gains tax hike, writing, "The lesson that investors should have learned by now is that Bernie Sanders was right when he predicted that Joe Biden would be the most left-wing president since FDR. Moderate Joe was always a mirage."

On Thursday, Laura Davison and Allyson Versprille of Bloomberg News reported that according to sources, Biden proposes "almost doubling the capital gains tax rate for wealthy individuals to 39.6 percent" or as high as 43.4 percent from "the current base rate of 20%." The S&P 500 took a slight dip on Thursday, but the following day, Krugman assured Twitter users that Biden was not causing the sky to fall.

Posting an S&P 500 chart showing a 52-week period, Krugman tweeted:

Krugman, in his Twitter thread, added that he "was struck by how small the reaction to the tax announcement was — less than 1 percent on the day":

White House Press Secretary Jen Psaki weighed in on fluctuations in the stock market when a reporter, at a press briefing on Friday, mentioned Biden's proposal for higher capital gains taxes. Psaki told the reporter, "I've been doing this long enough not to comment on movements in the stock market, but I did see just data, factually, that it went back up this morning."

Bloomberg News' John Authers, in an article published on Friday, explains, "Stock markets don't like it when politicians say they are going to raise capital gains taxes. This should come as no surprise to anyone, and so, Wall Street's response to Thursday's Bloomberg News exclusive that President Biden is planning a big hike in CGT was predictable."

Authers goes on remember how capital gains taxes can affect the stock market, writing, 'What are the direct effects of a CGT hike? If you were thinking of selling shares anyway, it makes far more sense to sell them before the end of the year…. It's not clear that higher CGT does anything more than bring sales forward. The way the market handled the last major CGT increase, at the end of 2012, is instructive."

Recalling how the stock market behaved in 2012 and 2013 — when Barack Obama was president and Biden was vice president — Authers notes, "As it grew clear that higher capital gains taxes were coming, the S&P 500 languished and went sideways for the last few months of the year, closing roughly where it had been in March. Then, 2013 turned out to be a great year; stocks started their rally at the beginning of January and never really stopped."