People rightly hold Biden accountable for their financial struggles

President Joe Biden retired his “Bidenomics” brand as his popularity plummets, but the White House continues its breathless attempts to reshape voters’ abysmal perceptions of the economy.

In a few sentences in a memo to the press, White House senior deputy press secretary Andrew Bates said that the president is fighting inflation by “standing up to corporate price gouging,” that inflation is still persisting because these major corporations “overcharge the American people,” and that inflation is actually not still persisting and instead is “falling.”

And the White House’s second favorite scapegoat? Former President Donald Trump, of course, whom Biden again blamed when he oddly repeated the lie twice that he inherited a 9% inflation rate upon taking office in January 2021, when the inflation rate was actually well below the Federal Reserve‘s maximum target of 2%.

But despite the blame game, voters still hold Biden responsible. While the 56% of Americans polled by the Guardian who believe our economy is undergoing a recession are wrong, the 58% who blame Biden’s mismanagement for our worsening economy are correct. Even if one accounts for the aberration of the 2020 pandemic, by nearly every objective metric one can conjure, the personal financial situations of average people have worsened or stagnated under Biden, especially when compared to the prosperity generated by his predecessor.

Earlier this month, Greg Ip at the Wall Street Journal went viral for demonstrating that whereas real household net worth rose by close to 20% in nominal terms during the first three years of Biden’s and Trump’s presidencies, the picture changes once adjusted for inflation. Real net worth rose 15% by the end of Trump’s third year in office, while it grew not at all under Biden. We all know inflation is the universal tax that incinerates gains in growth, but worse for Biden’s flailing reelection odds is how regressive the effect is on a per capita basis.

Rather than considering aggregate household net worths, let us compare individual paychecks. Over four years of Trump’s presidency, real average weekly earnings, a useful measure because it encompasses time worked and the rate of pay, increased by 8.9%. In under 3 1/2 years of Biden’s presidency, real average weekly earnings have fallen by 4.7%.

These numbers are more damning than the real household net worth comparison, but they are also more meaningful. Whereas household net worth reflects our still-robust equity markets that bolster the investment portfolios and retirement accounts of the roughly three-fifths of the country with money to spare in the stock market, it doesn’t reflect the share of the country that still lives paycheck to paycheck. And while the stock market has outpaced Biden’s debasement of the currency, average wages clearly haven’t.

Inflation is also regressive in terms of the goods most affected. For example, per the consumer price index for all goods and services, overall prices have risen by 19% since Biden took office. But food prices have risen 21% and energy prices another 38%. The price of rent of primary residence, what renters report paying to the Bureau of Labor Statistics, has also risen 21%. Considering that housing, shelter, and energy comprise a much larger share of the budgets of lower-income earners than the wealthy, the effective inflation rate experienced is likely higher as you move down the income gradation.

The latest analysis from the nonpartisan Congressional Budget Office confirms as much, comparing the price of the same bundle of goods across the CPI from 2020 through 2023. While the bundles are the same over time, the CBO varies them at the start to reflect the average spending habits of five different income quintiles. Energy and food comprise a larger share for the lower-earning quintiles than those earning more. Whereas the bundle for the highest quintile of earners rose by 4.4%, the bundle for the lowest-earning rose by 4.7%. The middle quintile’s bundle rose by 4.5%, resulting in an average annual $3,000 loss of purchasing power.

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The federal government’s COVID-era spending spree is no longer softening the blow of such high prices, either. Biden inherited a 20% personal savings rate as a percentage of disposable income when he took office, but that figure has dwindled to 3.6% as savings and paychecks prove less capable of covering rising prices. Compare that to the personal savings rate as a percentage of disposable income that nearly doubled from the time Trump took office to 9.1%. (The government’s decision to line our coffers with numerous needless stimulus checks obviously shot this figure to the double digits that Biden inherited, but Trump ought not to be rewarded for his fiscal irresponsibility in 2020 when his pre-pandemic economy was good on its own.)

Maybe the average household with savings to spare in the stock market isn’t poorer as a result of Biden’s presidency, but nearly four years in, it isn’t any wealthier. For the least privileged earners reliant on paychecks and fixed incomes, Bidenomics has indeed made them poorer. That’s why they’re rightly hammering him in the polls.