Update: A ‘Biden Boom’ And Americans Haven’t Yet Noticed – Here’s The Facts

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.” ― Charles Dickens, A Tale of Two Cities.

Update to A ‘Biden Boom’ And Americans Haven’t Yet Noticed.

“A booming U.S. economy is rippling around the world, leaving global supply chains struggling to keep up and pushing up prices,” the Wall Street Journal reports.

“U.S. economic output is set to expand by more than 7% annualized in the final three months of the year, up from about 2% in the previous quarter… That compares with expected annualized growth of about 2% in the eurozone and 4% in China for the fourth quarter.”

Bloomberg analyzes, Biden’s Economic Performance Has Proved Unbeatable:

U.S. financial markets are outperforming the world by the biggest margin in the 21st century, and with good reason: America’s economy improved more in Joe Biden’s first 12 months than any president during the past 50 years notwithstanding the contrary media narrative contributing to dour public opinion. (More about this below).

Exceptional returns from dollar-denominated assets, especially the S&P 500 Index in both absolute terms and relative to its global counterparts, can be attributed to record-low debt ratios enabling companies to reap the biggest profit margins since 1950. Corporate America is booming because the Biden administration’s Covid-19 vaccination programs and $1.9 trillion American Rescue Plan reduced the jobless rate to 4.2% in November from 6.2% in February, continuing an unprecedented rate of decline during the Covid-19 pandemic.

Consider that real, or inflation adjusted, gross domestic product surged at an average annual rate of 5.03% in each of the first three quarters of 2021, and is poised to expand 5.6% for the year based on the average estimate of more than 80 economists surveyed Bloomberg. If that forecast proves accurate, it would be more than 2.8 times the average between 2000 and 2019 and double the average since 1976.

All of which makes Biden’s first year in the White House the standout among the seven previous presidents, based on 10 market and economic indicators given equal weight. According to data compiled by Bloomberg, no one comes close to matching Biden’s combination of No. 1 and No. 2 rankings for each of the measures:

• • • Gross domestic product (1)
    • Profit growth (1)
    • S&P 500 performance (2)
    • Consumer credit (1)
    • Non-farm payrolls (2)
    • Manufacturing jobs (2)
    • Business productivity (2)
    • Dollar appreciation (2)
    • S&P 500 relative performance (2)

Per capita disposable income, which rose 1.08% this year, is the only comparable weakness for Biden, trailing Donald Trump’s 2.17%, George W. Bush’s 2.01%, Jimmy Carter’s 1.80% and Ronald Reagan’s 1.42%. [This is because of inflation as the world’s economy adjusts to coming out of an unprecedented pandemic shutdown].

GDP growth in every incoming administration during the past four decades never exceeded 2.74% until 2021. Biden is now positioned to surpass Carter (5.01%) as the GDP champion of presidents since 1976. Much of the credit goes to The American Rescue Plan, which poured $66 billion into 36 million households and reduced the child poverty rate by 50%, helping the U.S. recover faster from the pandemic than most other nations.

Leading the Pack

The economy is poised to expand 5.5% in Biden’s first year as president.

Corporate America was never healthier than under Biden in 2021. Efforts to support consumers flowed through to America’s companies, which are enjoying profit margins of around 15%, the widest since 1950, according to the Bureau of Economic Analysis. Non-financial profit increased 39.3%, making Biden No. 1 among eight presidents with Obama a distant second at 21.6%.

The boom times have allowed companies to reduce net debt as a percentage of earnings before interest, taxes, depreciation and amortization to the lowest since data was compiled in 1990 for companies in the S&P 500. All this helps explain why the stock market under Biden is second only to George H.W. Bush of any incoming president since Carter.

Americans are certainly feeling good. Consumer credit surged $196 billion through October, a record under Biden that is 27% more than the increase under No. 2 Donald Trump ($154 billion). Although some of the gains reflect a rebound from 2020 when the pandemic caused many consumers to retrench, they wouldn’t be adding debt if they weren’t feeling confident.

The way the jobs market is improving, it’s not hard to see why consumers are in such a good mood. Biden is the only president over the past half century with robust increases in non-farm payrolls (4.3%) and manufacturing jobs (2.6%), approaching the gains enjoyed by Carter in general employment (4.6%) and factory workers (3.9%). Trump, who inherited the longest expansion in modern times and said in 2015 he would “be greatest jobs producer that God ever created,” is an also-ran, with non-farm and manufacturing payrolls inching up 1.4% and 1.3%, according to data compiled by Bloomberg.

Jobs Boom

Only Carter tops Biden for best growth in payrolls in their first year in office.

Returning to Factories

Manufacturers have added more workers under Biden.

Companies need all the workers they can get. U.S. business output, a measure of productivity, increased 4.4%, putting Biden ahead of every predecessor except Carter, where it gained 6.25%. No wonder confidence among chief executive officers of the largest U.S. companies soared to a record this year as expectations for hiring, capital investment and sales improved. The Business Roundtable’s CEO Economic Outlook index, launched in 2004, rose 10 points to 124 in the fourth quarter, the highest in 20 years.

Getting Back to Work

Business output is surging under Biden as the economy recovers.

America’s economy is the envy of the world, looking at the foreign-exchange market. The dollar has strengthened 7.37% this year. That is the most under a first-year president since the greenback gained 17.8% for Reagan, according to data compiled by Bloomberg.

The Mighty Greenback

America’s currency has gotten stronger under Biden.

In another sign that the U.S. economy is a global leader under Biden, U.S. stocks outperformed the world equity market by 6.3 percentage points, the widest advantage since 1988, when George H.W. Bush was in the White House, according to data compiled by Bloomberg.

The good times may extend into 2022. Biden’s bipartisan $1.2 trillion Infrastructure Investment and Jobs Act bodes well for the economy and American labor because it will rebuild the nation’s deteriorating roads and bridges as well as fund climate and broadband initiatives that create jobs. Even Senate Minority Leader Mitch McConnell, who said his priority was preventing the Biden agenda, voted for the law along with 18 fellow Republicans.

Biden, like Carter, now faces the political fallout of the accelerating inflation from global supply chain breakdowns associated with the pandemic even though maintaining stable inflation and interest rates are the primary responsibility of the Federal Reserve, and the Fed said it’s prepared to tighten monetary policy in 2022.

Biden, unlike Carter, benefits from the $29 trillion U.S. debt market. In contrast to the 1970s and early 1980s, confidence in the Fed’s ability to get inflation back under control is unimpaired, reflected in the yield on the benchmark 10-year Treasury note fluctuating below 1.7% as inflation hovers at 4.1%. When Carter was in the White House, investors lost confidence in the Fed, evidenced by the 10-year yield rising to 12.6% with inflation reaching 9.65%.

The clear message from the market that tells all other markets what to do is that the people with the most at stake are betting on the Biden economy.

The Biden administration has taken a lot of criticism for not singing its own praises for what it has achieved this year (an overreaction to four years of Donald Trump always speaking in superlatives and self-congratulatory praise, lying about his so-called “achievements.” They don’t want to be unfavorably compared to that loser.

Nevertheless, the Biden administration has responded to this criticism by releasing a memo, 2021: POTUS Delivered Results for Working Families (introduction):

(Followed by a series of graphics).

I would suggest that they go with Bloomberg’s analysis instead.

About the months of breathless supply chain “you’re not getting your Christmas gifts” reporting we have been subjected to from reporters (most of whom never even took an Econ 101 class in college): yeah, not so much.

The New York Times, among the worst offenders, finally reports today, Why Christmas Gifts Are Arriving on Time This Year: Fears that a disrupted supply chain could wreak havoc on the logistics industry over the holiday turned out to be wrong as many Americans ordered early and shopped in stores.

President Biden, who has worked diligently to unwind these supply chain issues at our ports drove home this point today, Biden says supply chain crisis didn’t materialize: ‘Gifts are being delivered, shelves are not empty’:

President Biden on Wednesday touted his administration’s progress in keeping the American economy rolling, telling a group of business leaders and government officials that the supply chain crisis that was expected to hit the country during the holiday season has not materialized.

“We brought together business and labor leaders to solve problems,” Biden said at the White House, where he held a video conference with business leaders and officials in his supply chain task force. “And the much-predicted crisis didn’t occur. Packages are moving, gifts are being delivered, shelves are not empty.”

The White House formed a task force drawing on multiple Cabinet agencies, with Biden administration officials working to ease bottlenecks at a vital U.S. port complex in Southern California and calling for round-the-clock dock work as part of efforts to clear clogged freight channels. The mountains of freight marooned on wharves eventually started to shrink.

Several stakeholders taking part in Wednesday’s meeting, part of which was opened to the press, backed up Biden’s rosy assessments.

“I think the big headline here is freight movement off the ports is improving,” said Christopher Connor, chief executive officer of the American Association of Port Authorities “And that’s happening due to extraordinary efforts, collaborative efforts between all suppliers, participants coupled with creative solutions, which are easing congestion. Despite all reports to the contrary over several months, it is going to be a good holiday season.”

Where is the mea culpa from the feckless news media? Where is their praise for President Biden’s efforts proving them wrong? How about just a simple “thank you”?

William Safire coined the phrase “nattering nabobs of negativism.” This applies in spades to lazy opinion poll reporting, as compared to factual reporting.  To paraphrase William Shakespeare: “The first thing we do, kill all the pollsters.”

Despite all of the good news above, here is a sample of the lazy opinion poll reporting from the “nattering nabobs of negativism” this week:

CNN Poll: Biden’s economic ratings are worse than Carter’s:

President Joe Biden is struggling in the minds of the American public. While his approval rating is down on a slew of issues, his difficulties are perhaps most noticeable on the economy.

Biden now sports the lowest net economic rating of any president at this point through their first term since at least Jimmy Carter in 1977.

This is where the reporter should explain cognitive dissonance, the inconsistency between what people believe and how they behave (see the Bloomberg analysis above). People attempt to relieve this tension in different ways, such as by rejecting, explaining away, or avoiding new information. The “alternative reality” much of the media has created.

In the latest CNN/SSRS poll, Biden comes in with a 44% approval rating to 55% disapproval rating among registered voters on his economic performance. [Did I mention there is a “Biden Boom” backed by objective data?]  This makes for a -9 point net approval rating. The average of all polls taken in December is quite similar with Biden at -13 points on the economy.

To put that in perspective, the average president at this point in the last 44 years (since we have been polling on the topic) had a net economic approval rating of +5 points. That means Biden’s is 18 points worse than the average.

Notably, Biden’s net rating is worse than his two immediate predecessors, Barack Obama in December 2009 and Donald Trump in December 2017. Both Obama and Trump had net approval ratings on the economy of -4 points.

[T]oday, the economy is viewed as the top problem for both the nation and for people’s families, so the low consumer sentiment is dragging Biden down. [Due to a relentless negative media narrative.]  A Monmouth University poll released earlier this month found that 41% listed economic concerns (either everyday bills and groceries; inflation; job security and employment; or the economy overall) as the top issue for their family. That’s far more than for any other issue.

Inflation, in particular, seems to be a big issue for Biden. Just 28% of Americans approved of the job he is doing to handle inflation in a recent ABC News/Ipsos poll. This comes as more voters said they were concerned about inflation than any other issue in a December Fox News poll, and only 22% said the Biden’s administration efforts to get inflation and rising prices under control were helping. The plurality (47%) said they were hurting.

Once again, it is the responsibility of the Federal Reserve Board to deal with inflation, but I would wager 99.9% of Americans don’t know what the Federal Reserve Board is, let alone what it does. Americans are ignorant about economics, monetary policy and fiscal policy. This is why Republicans always get away with their bullshit lies. They feed on this ignorance.

Indeed, the issue of inflation hurting a president helps to put Biden’s bad position in perspective. The public reaction now looks at least somewhat similar to how the public was reacting to another president under whom inflation was an issue: Carter.

A lot of Republicans like to draw parallels between Carter (who was a one-term president) and Biden. And at least early on, when it comes to public perceptions of the economy and inflation, there are some similarities between them.

This CNN reporter is just parroting GQP talking points.

Compare this “opinion poll” reporting to Bloomberg’s factual reporting above where both Carter and Biden produced good economic numbers in their first year in office. The data doesn’t lie, despite what people may think or feel.

Both presidents endured inflation in gas prices due to OPEC, and more recently the big oil producers manipulating supply to drive up gas prices to recover their losses since 2014. This is market manipulation and price fixing or price gouging by OPEC and “big oil,” not any Biden administration policy. “Under immense pressure from Wall Street shareholders, oil companies are finally trying to live within their means. Even though crude has surged above $85 a barrel amid roaring demand, drillers are only gradually adding supply.” US oil companies are in no rush to solve Biden’s gas price problem.

The public’s anger is misdirected because the media does not explain what is happening and why. All they do is show the posted prices at the local gas station and ask a random customer “so how do you feel about  gas prices?” What does this have to do with the price of tea in China? Totally irrelevant. Report on what Wall Street greed and “big oil” are doing to consumers.

Then there is the polling that I despise with the white hot heat of a thousand radiant suns: the right track/wrong track opinion poll. For the love of God, can we finally bury this totally useless poll now and forever?

A new Morning Consult poll finds just 38% of Americans think the country is on the right track, while 62% think it’s on the wrong track.

Anti-democracy, pro-Covid Biden hating partisan Republicans will say wrong track out of GQP tribalism. But a large number of Democrats and Independents will say wrong track as well because of the obstructionism from Sedition Party Republicans, aided and abetted by Democratic appeasers, Sens. Joe Manchin and Kyrsten Sinema.

The wrong track response merely measures general disillusionment with our broken system of government which is not responsive to public needs in a timely manner. It is not a judgment on any specific policy of the Biden administration. When pollsters actually ask about specific policy positions, the public is strongly in favor of Biden’s polices. You can look it up.

Thought experiment: Let’s go an entire year without any lazy opinion poll reporting and let’s see how things work out without the malign influence of these poisonous opinion polls.  We might actually get back to informed responsive governing again.