B402, Bidenomics Is Still Working Very Well .. Trickle down as you know is the Republican thing, and that since Reagan's time has not served many in American nearly as well as it has served the more wealthy. Trickle down has not served much of the people world well, perhaps would be better said. Still poverty worldwide has declined. And, still, speaking of economies, as i was, as economies go it is accepted worldwide that Bidenomics has served the world well. Also, see the red below it has served American workers relatively well.
"Trickle Down economics?..... Middle and working class waiting for dem economics."
Related: Based on Incomes, Americans Are a Lot Better Off Under Biden Than Under Trump Despite a spurt of high inflation that has dramatically receded, Joltin’ Joe’s economy is far more robust than that of his oft-indicted predecessor. by Robert J. Shapiro February 12, 2024 [...] That brings us to 2023, when the official data showed that Americans’ per capita incomes, after inflation, jumped 4.2 percent. The special transfer payments continued to fall substantially below those before the pandemic, and federal unemployment payments edged to $22 billion, the lowest level since 1969, adjusted for inflation. With transfer payments and jobless benefits no longer distorting incomes, the official report accurately reflects what happened to Americans’ real disposable incomes based on the economy. P - It’s hard to overstate the extraordinary growth of incomes during the Biden Boom of 2023. No president since Richard Nixon has presided over average annual income gains as significant as the 4.2-percent increase in 2023 under Biden. https://washingtonmonthly.com/2024/02/12/based-on-incomes-americans-are-a-lot-better-off-under-biden-than-they-were-with-trump/
But last week, the Bureau of Labor Statistics reported .. https://fred.stlouisfed.org/graph/fredgraph.png?g=1hgOz .. that both the Consumer Price Index and the Producer Price Index rose 0.3 percent in January, more than most analysts expected. And the usual suspects — inflation perma-bears, political enemies of the Biden administration and economists who wrongly predicted that disinflation would require mass unemployment — jumped on the data as if it were a fumbled football.
So, are the good times over?
No. Everything we know suggests that those disappointing numbers were mostly a statistical blip rather than marking a significant worsening in inflation trends.
Before I explain how such blips can happen, let me tell you what indicators I was looking at after the inflation reports.
First, I was looking at financial markets, where instruments like inflation swaps and index bonds tell you what inflation rates investors putting real money on the line expect. The pricing on these instruments is still pointing .. https://www.ice.com/iba/usd-inflation-indexes .. to low inflation, around 2 percent or a bit more.
Second, I was waiting to see what happened in the Atlanta Federal Reserve’s survey of business inflation expectations .. https://www.atlantafed.org/research/inflationproject/bie#Tab1 , which asks businesses how much they expect costs to rise over the next year. If inflation were suddenly surging, you’d expect businesses to notice. But their inflation expectations rose to 2.3 percent in February from … 2.2 percent in January.
But if nothing much has changed, where did those slightly scary B.L.S. numbers come from?
In practice, our economy is a lot more complicated than a standardized holiday dinner menu, and estimating inflation involves a lot of fancy statistical footwork. The B.L.S. is extremely competent and professional — in fact, one rarely heralded policy advantage the United States has over other countries is that we generally have better data .. https://www.reuters.com/world/uk/uk-regulator-raises-concerns-about-labour-data-quality-2023-11-14/ . But while I have nothing but praise for the bureau, its reports can still sometimes be misleading, for several reasons.
One reason is that to make sense of monthly data, you need to adjust for seasonal factors. Some of these factors are obvious: fresh vegetables .. https://fred.stlouisfed.org/graph/fredgraph.png?g=1he7r .. get more expensive in the winter, cheaper in the summer. Others are less obvious. Goldman Sachs, which correctly predicted a bump in official inflation, points out that there is a “January effect” .. https://www.gspublishing.com/content/research/en/reports/2024/02/19/686c5969-9c1c-47e9-86f4-9cb08a7416ce.html .. on prices, because many companies raise their prices at the beginning of the year. And Goldman argued, in advance, that the official numbers wouldn’t be sufficiently adjusted to reflect this effect, leading to a spurious bump in measured inflation — a bump that will vanish in the months ahead.
Goldman also pointed out that the single largest component in the Consumer Price Index — 27 percent .. https://www.bls.gov/news.release/pdf/cpi.pdf#page=9 .. of the basket! — is a price nobody actually pays: owners’ equivalent rent, an estimate of what homeowners would be paying if they rented their houses. There are reasons the bureau measures housing costs this way, but there are also reasons to believe that in recent years that number has become misleading, distorting and exaggerating estimates of overall inflation. As it happens, the B.L.S. also produces an estimate .. https://fred.stlouisfed.org/graph/fredgraph.png?g=1hgPI .. of prices excluding owners’ equivalent rent, roughly matching the way European countries measure inflation. This “harmonized” index is up only 2.3 percent over the past year.
If you find all of this a bit mind-numbing, let me tell you a secret — so do I, even though this is supposed to be my field. But the bottom line is important: Despite some disappointing numbers last week, the basic narrative hasn’t changed. The U.S. economy continues to look like an amazing success story.
Saying this leads, of course, to pushback from Republicans who’ve claimed ad nauseam that Biden’s “socialist” policies would be a disaster — and as I recently wrote .. https://www.nytimes.com/2024/02/20/opinion/economy-putin-tucker-carlson.html , for such people believing is seeing, so they continue to insist that the economy is terrible even when by all objective measures, it’s doing pretty well. You also get some pushback from people on the left, who apparently believe that a progressive president shouldn’t be allowed to tout policy successes until he has completely eliminated poverty and insecurity — that is, never.
Paul Krugman has been an Opinion columnist since 2000 and is also a distinguished professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography. @PaulKrugman
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