It is now clear that the White House’s “Bidenomics” pitch has been a disastrous failure, with Biden’s economic message to re-election voters weighing heavily on what appear to be strong stock market returns. dependent. But even this argument is undermined by Biden’s other economic failures.
Inflation remains more than 50% above the Fed’s 2% target rate, and only 26% of Americans rate the economy as “good” or “excellent,” according to the latest survey. Despite the fact that new york times The only economic bright spot the Biden administration could point to in recent months was the stock market, according to a Siena College poll. The Dow Jones Industrial Average and S&P 500 both ended the first quarter of 2024 at record highs, giving the S&P its best start since 2019.
Corporate media has been quick to use the headline as evidence of the supposed success of Biden’s economic policies. “Biden’s stock market is crushing Trump’s,” Yahoo News declared.Ed Finn, former editor Barons, Biden “brought happy days to investors,” he wrote in an op-ed. Wall Street Journal.
Biden himself is trying to claim credit for the strong stock market. “Good news for you all to start the weekend,” Biden wrote on X in February in response to an NBC News post about the stock market. “A strong stock market is a sign of confidence in the U.S. economy.” (As many conservative accounts on (He criticized him for allegedly saying, “I’m doing well.”)
But Biden’s praise for the stock market’s strong returns is highly misleading. First, he never acknowledges the fact that stock prices are rising during a period of historical overall inflation. Overall, cumulative inflation since President Biden took office has exceeded 18%, meaning that 18% of the stock market gains seen under the Biden administration have been completely wiped out by inflation.
Accounting for inflation, the S&P 500’s return (also known as the “real return”) during Biden’s first three years in office was just 8%, significantly higher than the S&P’s historic three-year average of 20%. It’s below.
As a general rule, higher inflation rates make stocks more attractive than bonds. In other words, investors put more money into the stock market than into other securities. Rising internet prices have caused the bond market to grow rapidly, meaning that much of the growth in the stock market has come from a disproportionate amount of money taken out of bonds.
In other words, recent strong stock market returns are not a sign of “confidence” in the economy, as Mr. Biden claims. These are likely a sign of investors trying to offset the economic impact of sustained inflation from Biden’s record spending.
Moreover, as Stephen Moore, a senior fellow at the Heritage Foundation, explained in a February opinion piece for Fox News, “much of the market’s rally has been driven by Biden’s disastrous first days in office, when stocks fell nearly 15 percent. It just made up for two years of miserable returns.” Their value. ”
“In other words, the last 14 months have largely been about making up for lost ground in the 2022 crash,” Moore continued.
It’s also worth noting that most of the stock market gains have come from just seven companies: Apple, Alphabet, Microsoft, Amazon, Meta, Tesla, and Nvidia. Together, these companies account for nearly a third of S&P’s market capitalization. The success of these companies alone is not enough to claim that the economy as a whole, or even the stock market as a whole, is doing well.
Conversely, during President Trump’s tenure, the Dow Jones Industrial Average hit 126 all-time highs, even as reflation was suppressed. As a result, President Trump oversaw both a historically strong stock market and increases in real wages and the purchasing power of American households.
Polling data shows that no matter how hard Democrats and the media try to convince people that a Biden presidency will be good for their wallets, most Americans don’t believe it. A CBS News poll released in March found that under Trump, 65% of voters rated the economy as “good,” compared to just 38% under Biden. In another CNBC poll in March, more than 39% of respondents said the economy would be better off if Trump were re-elected this November, compared to 39% who said they would be better off financially if Trump won another term. Only 23% said they would be better off economically.
While Biden will almost certainly continue touting strong stock market numbers until Election Day, it’s easy to see why most Americans aren’t convinced by that argument.
Andrew Shirley is a veteran speechwriter and columnist for AMAC Newsline. His commentary can be found @ in his X.AA_Shirley.
