The economy is a top issue for many voters ahead of the 2024 presidential election. In a lengthy interview ahead of the first presidential debate between Joe Biden and Donald Trump, world-renowned progressive economist Robert Pollin offers a detailed and thorough assessment of the actual state of the U.S. economy and the effects of Biden’s economic policies.
The Biden rescue plan, in combination with the prior Trump measures, did indeed prevent a 1930s-level economic collapse in 2021. Unemployment in the U.S. could well have risen to perhaps 15-20 percent in 2021.
Biden has also proposed significant tax increases on U.S. corporations and the rich, even while, unfortunately, these proposals have zero chance of passing in the Republican-controlled House of Representatives. These measures could go far to financing, for example, an extension of the Child Tax Credit program that was enacted as part of the March 2021 COVID lockdown stimulus bill. Before it expired, this short-term measurein 2021, from roughly 10 percent to 5 percent of all children.
I do need to emphasize that I am speaking in relative terms about the good economic conditions under Biden. Over his three years in office, Biden has certainly not reversed 50 years of pro-Big Business, anti-working-class policies under neoliberalism. As just one indicator, the average real wage — i.e. how much your wage can purchase, after controlling for inflation — was in 2023, at, almost exactly what it was in 1973.
The current level of overall inflation, at 3.3 percent — meaning that the price of an average basket of consumer goods increased by 3.3 percent over the past year — is not a problem in itself. Indeed, it is remarkable that inflation has come down from the 2022 peak of 8 percent without the economy having gone through a recessionary ringer, much less a full-scale depression.
Some prices have actually fallen. As of June 10, a gallon of gasoline is averaging $3.42, a nearly 30 percent decline relative to the January 2023 peak. A dozen eggs are now at $2.79, 44 percent below the January 2023 peak. Average used car prices are currently at about $27,000, 13 percent below their 2022 peak. But for the prices of the full basket of consumer goods to fall — i.e. for there to be an overallas opposed to our current mild inflation — would almost certainly require a recession.