Tag: job creation
Inherited Conditions: Biden Left Trump The Best Economy In Half A Century

Inherited Conditions: Biden Left Trump The Best Economy In Half A Century

Donald Trump may not be able to remember what things were like five years ago, when he handed the economy and the country to Joe Biden, but it is important that the rest of us do. As in so many other areas where Trump tries to turn reality on its head, he pushes the story of Biden inheriting a great economy, which he then wrecked. The reality is the opposite, Biden turned around an economy in shambles due to the pandemic, and handed off an economy that was widely touted as the envy of the world.

The most important reversal was in the labor market. More than 19 million people were laid off in the pandemic shutdowns in the spring of 2020. Many quickly came back to work in the summer and fall, but the huge bounce back had stopped by the time Biden took office.

Job growth averaged just 150,000 in the last three months of the Trump administration. In fact, the economy actually lost jobs in December of 2020, so it is clearly wrong to imagine that there was a surge of rehiring at the time Biden took office. Employment was still 9.4 million below its pre-pandemic peak in January of 2021. The unemployment rate stood at 6.4 percent.

Biden’s recovery package quickly turned the economy around. Unemployment was down to 4.0 percent by the end of 2021. Employment levels regained the lost ground by June of 2022. It would have taken more than six years to get back to pre-pandemic employment levels at the rate of job growth in the last three months of the Trump administration.

One cost of Biden’s aggressive recovery package was a surge in inflation. The year-over-year inflation rate began to rise rapidly from pandemic lows, peaking at 9.0 percent in June of 2022. Clearly the recovery package contributed to this increase, but most of the story is the world-wide supply chain crisis stemming from the pandemic. (The surge in energy prices following Russia’s invasion of Ukraine was also a big factor pushing inflation higher.)

The story here is straightforward. As a result of the pandemic, people were not spending money on services like restaurants and travel. Instead, they spent it on goods, like appliances, television sets, and cars. The world could not meet this huge surge in demand, especially at a time when many production and shipping facilities were still crippled by the pandemic.

It is also important to recognize that this shift from services to goods was not the result of governmental restrictions. It was due to people not wanting to go into crowds and risk getting a potentially deadly disease that they could then transmit to friends and family members. Service spending did not return to its pre-pandemic share of consumption until early 2024.

However, the rate of inflation fell quickly. By the fall of 2024 the year-over-year rate was down to 2.5 percent, only slightly above the Fed’s 2.0 percent target. It’s also important to note that wages outpaced inflation over the Biden years, with the lowest paid workers seeing the largest real wage gains in more than half a century. It’s also important to note an increase of 20 million in the number of people who work from home, which is estimated as equivalent to a wage gain of 8 percent.

Finally, there is the question of overall economic growth. The economy had an unprecedented plunge in the spring of 2020 associated with pandemic shutdowns. It shot back in the summer and fall, but it had lost momentum by the end of the year. GDP in the fourth quarter was still 0.9 percent below its year ago level.

The recovery package quickly ramped up growth. The economy had some shaky times due to supply chains issues, two subsequent and unanticipated waves of covid in the summer of 2021 and winter of 2022, Russia’s invasion of Ukraine, and the sharp rate hikes by the Fed beginning in March of 2022. But it had settled down to a healthy pace of growth by 2024, with a year-over-year rate of 2.4 percent in the fourth quarter. That is the economy Joe Biden handed off to Donald Trump.

Source: BLS and BEA

It would be foolish to say everything was great when Biden left office. The United States has a badly undeveloped system of social supports. Tens of millions of people struggle to put food on the table, pay the rent, and cover medical bills. But by almost every measure most of the country was doing better in 2024 than they had been doing in 2020 or even before the pandemic in 2019.

Donald Trump might want people to forget this fact, but just because he has memory problems, it doesn’t mean the rest of us should.

Dean Baker is a senior economist at the Center for Economic and Policy Research and the author of the 2016 book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Please consider subscribing to his Substack.

Reprinted with permission from Dean Baker.

Does Trump Know Where Jobs Really Come From?

Does Trump Know Where Jobs Really Come From?

IMAGE: People wait in line to attend TechFair LA, a technology job fair, in Los Angeles, California, U.S., January 26, 2017. REUTERS/Lucy Nicholson

5 Best Things That Happened In 2015

5 Best Things That Happened In 2015

Here’s a prediction that follows a year when almost every prediction was flat wrong: 2015’s reputation will age well.

It could well even be remembered as the turning point in the greatest global crisis of our time.

That’s not to say the world-tilting hangover you’re feeling from the worst of the last 365 days isn’t real. The barbarism of ISIS and other horrendous acts committed in the name of religious extremism are indelible. As is all the continued horror in Syria. But amidst the domestic sturm und dang of overly hyped fears and hysterical pandering to our worst instincts, continued progress around the world made us safer, healthier and potentially even smarter.

Conservatives have a vested interest in scaring the Rice Krispies out of you. As we approach the election, that remains their best hope to dull the fact that Democratic presidents outperform Republican ones in every way that matters. Diminishing or hiding Obama’s accomplishments underneath a veil of fear is a necessity. Even Democratic candidates for president have to make arguments about how they’d improve America that often come across as minimizing the progress made during the last seven years. The media’s bias toward sensationalism also helps to explain why good news is often ignored or skimmed over.

So as a public service and a tribute to the truth, let’s dwell on the positive developments of the past year for a moment.

5. Obamacare kept saving lives.
It’s rarely mentioned, but the point of the Affordable Care Act is to keep Americans from dying. Positive enrollment news hasn’t been enough to overshadow the fact that the president’s health reforms have suffered some bad setbacks at the hands of Republican saboteurs this year. Even though the increases in prices of health care services is lower now than they have been since 1961, premiums also did not continue their trend of coming in below expectations for a pretty simple reason — the newly insured were sicker than expected. They’re getting health care and lives are being saved. How many lives? A study done on Massachusetts after Romneycare found 1 life saved for every 830 people gaining coverage. Given that about 17 million Americans have gained coverage, we can project that about 20,000 lives will be saved each year. You don’t hear that on the news. We hear about how Kentucky’s new governor wants to break his system’s excellent Kynect health care system, while headlines about how hard it will be for him to actually unwind Obamacare and stories about the drive to expand Medicaid in Republican states slip below the fold somewhere into the Phantom Zone deep beneath the comments section.

4. We had the second-best year of job creation this century.
Remember how Republicans said Obamacare would destroy the economy? “Even with weakness seen during the summer, job gains in 2015 will top 2.5 million, making it the second-best calendar year for U.S. job growth in this millennium, after last year’s 3.1 million,” MarketWatch reports. “The last time more jobs were created in a two-year period was at the height of the dot-com boom, in 1998-1999.” Weird. The first two full years of Obamacare led to the best job creation of the century. Surely, Republicans will be called out on that.

3. The GOP stopped hiding the antipathy that’s dividing the party.
In 2014, Republicans proved that they had the skills and discipline to run sober candidates who could exploit a very favorable electoral map. In 2015, we saw the party begin to reap the burden of letting bipartisan immigration reform die without ever even getting a vote in the House. The urge to continually demand deportations instead of reform reflected an animated base that represents about half of the party. The other half of the party recognizes either the advantages of immigration or the costs of appearing intolerant in a changing America and generally supports reform. From this morass emerges Donald Trump pitching a ridiculous wall, slurring Mexican-Americans, determined — it seems — to drive Latino voters to reject the Republican party the way African-Americans have for decades. And even if that doesn’t happen, this could be the year that the long fantasized split in the GOP will come to fruition.

2. We gave diplomacy a chance.
Making predictions about the Middle East was already a fool’s errand before our war of choice in Iraq decimated the region, empowered Iran and exacerbated tensions between ethnic groups while awakening latent rage that has been built up over generations of oppression. As 2016 ended, good news — Iran ridding itself of the uranium needed to build a nuclear weapon — was paired with a disturbing revelation — more Iranian ballistic missile tests. Just as parties in the U.S. are torn over attempting peace with a sworn enemy, nationalistic forces in Iran continually hanker for war. Hopes of this deal proceeding successfully and denying Iran nuclear weapons, eliminating the existential threat to Israel, hinge on so many variables that hope seems foolish. But President Obama’s administration has proven that engagement with Iran as with Cuba is a worthy goal, regardless of our ability to control every possible outcome.

1. We may have put the world on the path to avoiding the worst of the climate crisis.
It was a bad year for people hoping to prove that 97 percent of climate scientists are wrong. The world greatly improved its chances of avoiding the worst of drought, floods and famine carbon polluters hoped we’d eagerly embrace. The Paris agreement is imperfect, no doubt, with enforcement replaced with financial encouragement, global cooperation and public shaming. But it’s also the most the world has ever done to collectively fight climate change — and it comes on the heels of an Obama-sparked green energy revolution that has helped the world see the first year where the economy expanded and carbon emissions decreased for the first time in 40 years. If this is the beginning of the world’s commitment to avoiding leaving our descendants a purposely wrecked climate, history will remember 2015 as the moment when humans took responsibility for our actions. If not, we’re doomed. Ben Adler at Grist summed it up best: “For activists all over the world, the Paris Agreement shows there is still hope for maintaining a livable climate, but there’s a lot more work to be done pushing world governments to meet the challenge.”

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5 Reasons Republicans Would Vote Democratic If They Were Being Honest

5 Reasons Republicans Would Vote Democratic If They Were Being Honest

Republicans will accuse whoever becomes the Democratic nominee of wanting Barack Obama’s third term — as if 11 million Americans finding new jobs and 16 million gaining health insurance is a bad thing. But Mitt Romney is determined to lead Republicans into running Mitt Romney’s third losing presidential campaign.

At a weekend summit for Republican candidates and donors in Utah, Romney again tried to cast himself as a visionary who was defeated only by turnout in “urban areas.” Without those meddling urbans, Mitt would be boldly leading us into more confrontations all over the globe because having the first few months without a U.S. combat death since 9/11/01 is apparently a terrible thing.

Mitt’s fixation on foreign policy traces the entire Republican field’s descent into warmongering as its primary mode of critiquing Obama. They are doing this for two simple reasons.

First, we’re still reeling from the mess created when George W. Bush neglected Afghanistan to invade Iraq with far too few troops to contain the country. And while President Obama has re-engaged in the region, Republicans want more. Explicitly, they want the exact thing that created this problem — U.S. combat troops in Iraq. At least that’s the latest word from — you guessed it — George W. Bush.

The bigger reason Republicans are fixated on foreign policy is that it’s their best hope.

In October of 2012, Mitt vowed to get the unemployment rate below 6 percent by 2016. We’re halfway through 2015 and the unemployment rate is 5.5 percent. By Mitt’s own standard, President Obama is exceeding expectations. We’ve had the best two years of job creation since tax increases on the wealthy and Obamacare went into full effect. And 2015 was the best year of job creation this century.

But when it comes to standards, Republicans are famous for only holding Democrats to them. Here are five reasons that if Republicans really wanted richer, safer, and more “life”-centered America, they’d vote Democratic.

1. Jobs

“Since 1961, for 52 years now, the Republicans have held the White House 28 years, the Democrats 24,” Bill Clinton said at the 2012 Democratic Convention. “In those 52 years, our private economy has produced 66 million private-sector jobs. So what’s the jobs score? Republicans 24 million, Democrats 42 [million].”

The Daily Beast‘s Michael Tomasky looked at Calculated Risk‘s Bill McBride’s projections for job creation under Obama and suggested how a reprise of that tally might play out in 2014: “Now imagine how Hillary Clinton (or Bill again, in her behalf) can update this at the 2016 convention if McBride turns out to be right: ‘Now the scorecard is even since 1961 in terms of years—28 years for them, 28 for us. The jobs score now? Republicans 24 million, Democrats 53 million.'”

Our Joe Conason looked at Dr. James Gilligan’s Why Some Politicians Are More Dangerous Than Others and found that the difference is even more stark if you put it in terms of the unemployment rate — even before more than twice as many jobs were created under Obama than both Bushes combined, in half the time.

“If we count up the net sum of all the increases that occurred during Republican administrations from 1900 through 2008, we find that the Republicans brought about a cumulative increase of 27.8 percent in the unemployment rate, and the Democrats an almost exactly equal decrease of 26.5 percent.” The net cumulative difference in the partisan effects was a staggering 53.8 percent.

Since the stimulus went into full effect, we’ve been enjoying the longest stretch of private-sector job growth in American history.

For the first time in 15 years, jobless claims have been below 300,000 for 14 straight weeks. Layoffs have reached lows not seen since 1971, meaning per capita layoffs have never been this low in recorded history. Part of this is a symptom of a broken economy where too many people are freelancers and independent contractors, but can you imagine the size of the parade President Romney would be getting if he helped bring America layoffs lower than Reagan brought us?

Of course, improving the economy is the only way to truly improve the health of our federal budget, which explains the next reason Republicans should vote Democratic.

2. The Deficit

Speaking of crises that have been fixed under Obama that never get mentioned anymore… We spent much of the last seven years being lectured about the deficit by the exact guys who turned a record surplus into a record deficit. But suddenly, they’ve gone very, very quiet on this subject.

The deficit is now projected to be lower than at any time since August 2008, right before the Great Recession truly kicked off. This means that under President Obama, the deficit has been reduced by more than a trillion dollars a year.

Apparently pointing out that we can expand health insurance to 16 million while bringing the deficit to new lows isn’t the kind of thing Republicans like to do. But it shouldn’t be a surprise that Obama is better at lowering the deficit than his Republican peers — Blinder and Watson found that all Democratic presidents have been better at it since 1947.

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3. Crime

Violent crime in America fell to its lowest level since 1978 in the first year of Obama’s second term. And while conservatives and the media have a vested interest in playing up local spikes in lawbreaking, in general America is still as safe as it’s been in decades, possibly ever.

And like the economy and deficit, this reduction in crime isn’t unique to this Democratic president. It’s consistent with what happens every time we put a Democrat in the Oval Office. Why? Poor economic performance invariably leads to a more dangerous America.

“The level of economic inequality likewise tracks homicide and suicide rates as they move up in tandem, and so does the general condition of the economy, which can be seen sinking as those figures rise,” Conason wrote, summarizing Gilligan’s findings. “When inequality grows, violence follows; when the economy stagnates, violence predictably festers.”

And it isn’t just America that’s safer now than it was seven years ago. It’s our border, too.

4. The border

Republicans need to pretend the border isn’t secure because saying “First we must secure the border” comforts the nativists who will definitely be showing up to vote in the GOP primaries. But the U.S./Mexico border is safer than it’s been in decades — possibly ever.

“The border today is transformed,” former Customs and Border Patrol Commissioner David Aguilar told a Security conference in April. “Border communities are safer than the interior locations of each of the border states. Violent crime is lesser along the border than it is in the interior.”

It’s safer than even Washington D.C., he said — based on actual statistics and not anecdotal evidence from House of Cards.

Fox News viewers assume that the deficit is rising, Obama is becoming more Muslim, and illegal border crossings are at an all-time high. But the opposite is all true. There are a million fewer undocumented immigrants in this country now than in 2007, even though President Obama has taken executive action to delay some deportations. This has to do with the weak economy Bush left us and a huge boost of government spending to monitor the border, which are two more reasons Republicans probably don’t like bringing it up.

5. Abortion

The greatest irony of the debate over reproductive rights is that abortion is less common where it’s legal.

Eliminating abortions completely is impossible, given that it asks people to give up complete control of their bodies, even to a pregnancy caused by rape, incest, or the inevitable kind of mistaken sexual encounter nearly every human being on Earth has blundered into. And it makes that demand only of people born female.

It you want to reduce the abortion rate, it’s pretty simple. Remove all federal restrictions, guarantee health insurance to everyone (including complete birth control options), and offer quality sex education. We know this because Canada does all that and has a lower abortion rate than we do.

Essentially: To reduce abortions, just do the opposite of what the GOP platform calls for.

Liberalizing abortion laws also works to reduce abortions and make them safer in America. Abortions are down about 12 percent since 2010, which is coincidentally when Obamacare became law. A lot of that reduction seems to have to do with the lower birth rate. But you can’t discount the pro-life aspects of the Affordable Care Act.

Apparently offering birth control without a co-pay reduces abortions, shocking no one — but Republicans.

If you were truly cynical, you’d argue that Republicans are trying to increase abortions — given how little concern they have for the unintended lives that get created.

The Democratic Party isn’t perfect, of course. Too often the corruption of our political system and the drift of war powers has made the agendas of the two parties seem parallel. But the real, undeniable differences become vivid when you look at reproductive rights, tax policy, voting rights, health care, and judicial appointments. And they’re definitely clear when you look at results.

If Republicans really want robust growth that makes us richer while securing the border and reducing abortions, they’d have to vote Democratic. But if their agenda is to make the rich richer, it makes perfect sense to keep voting Republican.

Image: DonkeyHotey via Flickr

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