Why Bidenomics Isn’t Popular

Minority families have fallen behind, a new Federal Reserve report says

WSJ editorial. 

"Voters in swing states disapprove of Bidenomics by a two-to-one margin, according to a poll last week. And Democrats keep wondering why more black and Hispanic voters are showing interest in the GOP. A possible explanation arrived last week in a new Federal Reserve report showing how minorities in particular have struggled in the Biden years.

News coverage of the Fed’s Survey of Consumer Finances has noted that the typical family’s net worth increased 37% between 2019 and 2022 amid the run-up in equity and housing prices. But while Americans overall have become wealthier during Mr. Biden’s tenure, many don’t feel that way because they are cash poorer.

After adjusting for inflation, the typical white family’s income rose 1.3%, the report says. But it shows declines for black and Hispanic families of 1.6% and 1.1%, respectively. Wages for minorities didn’t keep up with inflation, and those for whites barely did.

Black and Hispanic households “benefited more from government support, including extraordinary pandemic-era programs,” such as sweetened food stamps, stimulus checks, rental assistance, enhanced unemployment benefits, and larger child-care tax credits. But Covid relief is now in the rearview mirror, and Congress’s spending binge on those benefits fueled the high inflation that has hurt consumers whose real earnings have stagnated.

“While families can also cover expenses using wealth, particularly for Black and Hispanic families the gains in wealth were concentrated in housing, which is somewhat illiquid,” the Fed report adds. “Real average liquid wealth, which includes assets such as cash, checking, and savings accounts, did not grow much for Hispanic families and fell for Black families.” The fact a family’s home might be worth 20% to 30% more than before is no consolation in the grocery checkout line.

All of this explains why Americans, and especially minorities, are sour on Mr. Biden’s economic policies. “We see a broad-based increase in economic pessimism that was especially strong for non-White families,” the Fed says. Americans of every race report more uncertainty about their incomes than they did in 2019, but “the step-up in uncertainty for Black and Hispanic families was especially strong—14.2 percentage points and 10.9 percentage points.”

The share of Americans who expect the economic future to be worse “skyrocketed in 2022 across all races and ethnicities” and was “at or near record highs,” surpassing levels “in the aftermath of the Great Recession.” While unemployment is relatively low at 3.8%, people’s bills have increased at the same rate or faster than their paychecks. They might also worry that economic downturns tend to follow rapid rises in housing and stock prices.

Mr. Biden’s poor marks on the economy are driven by reality. The enduring mystery is why Mr. Biden won’t change. His climate and energy policies are raising costs for consumers and employers, and a regulatory avalanche is creating business uncertainty. This is one reason that polls keep showing Mr. Biden losing to Donald Trump in 2024 swing states. Americans might not miss Trump the man, but they miss the Trump-era economy."