The Biden Economy Is ‘Glorious’—if You’re Wealthy

Asset values have grown, but the working class bear the brunt of inflated prices and higher interest rates

By Allysia Finley. Excerpts:

"Mr. Biden’s economy has been glorious—for affluent liberals. It’s been awful for the working class. Socioeconomic disparities have grown in recent years owing to the policies that were supposed to shrink them."

"Consider a Federal Reserve study last month, which examines socioeconomic disparities in consumer spending between 2018 and 2024. Inflation-adjusted spending grew at roughly the same rate for households of different education and income levels between 2018 and 2020. Then differences emerged."

"As a result, spending has increased 7.9% for those making less than $60,000 vs. 16.7% for those making more than $100,000 since January 2018. Spending by Americans who have attended graduate school climbed 19.4%, roughly twice as much as those who haven’t attended college. The study posits that “higher-income households might experience a wealth effect as their homes and investments increase in value, while they also receive more interest and investment income during periods of higher interest rates, all providing a stimulus for sustained levels of spending.”"

"The S&P 500 index has surged by some 50% since January 2021."

"New home buyers are spending thousands more each month on mortgage payments than those who bought homes before Mr. Biden took office."

"Democrats claim Donald Trump will bully the Fed to keep rates low, but Mr. Biden and congressional Democrats have attempted the same. In June 2020, Mr. Biden’s economic adviser Jared Bernstein proposed broadening the Fed’s employment mandate to “make it more racially inclusive” and correct “persistent economic injustice.” Mr. Biden endorsed a 2022 bill, which passed the Democratic House, that would have required the Fed to use its monetary and regulatory tools to promote racial equity."

"As inflation surged in 2021, the Fed cited higher unemployment rates for minorities as an excuse not to tighten."

"“joblessness continues to fall disproportionately on lower-wage workers in the service sector and on African Americans and Hispanics.”"

"Blame the latter on lockdowns and transfer payments that made lower-income work less attractive. As inflation flared out of control, the Fed eventually had no choice but to raise interest rates—and higher than it probably would have if it had acted sooner."