this chart shows consumers' confidence in the economy during the Biden and Trump administrations. As of June 2024, confidence in the economy under President Biden averaged nearly 28 points lower compared to during former President Trump's term. It had an all-time low back in June of 2022. According to the latest survey from Gallup, 53% of Americans believe the Republican Party will do a better job with the economy, compared to just 39% who favor the Democrats. At this point, every survey that I know of tells me that Republicans are seen as having the advantage for the management of the economy. Voters seem to think that President Trump was a better steward of the economy than President Biden, and I think that's going to be an important advantage for Republicans. While the US technically isn't in a recession, roughly three out of five Americans believe it is. In 2024, nearly three-quarters of Americans said strengthening the economy should be a top policy priority, while a third mentioned economic issues as the

nation's most important problem. I think that the economy is really top of mind for people. They are really concerned with how their families are doing financially and economically. You know, we are in a very strange situation where people don't feel like they're thriving in spite of many strong indicators in the economy. So, did Americans enjoy a better economy under President Trump or Biden, and which candidate will be able to fix the economy? I think a lot of economists and commentators, and certainly a lot of politicians, believe that there is a disparity between how consumers are feeling about the economy and what the high-level economic statistics about economic growth, about the level of employment, about the rate of unemployment are telling you. Statistics of that sort cut very little ice with average households and with voters. They judge principally on the basis of their own experience. From the standpoint of consumers and average households, the issue is how am I living? Is my ability to afford the basics of daily life improving or not? President Biden's term has seen the highest inflation in 40

years reaching a four-decade peak of 99.1% in June 2022. As of June 2024, prices rose by 19.3% during his term compared to just 5% for former president Trump during the same time frame in office. Consumer sentiment during President Biden's time in office has been quite weak, and I think the explanation for that is pretty straightforward: people really don't like inflation. High inflation also ate into Americans' purchasing power. According to estimates, the average inflation-adjusted weekly paycheck shrunk by about 4.4% or $50 during Biden's term. That's despite the fact that wages have risen faster under Biden than under Trump. Average households have judged that their wages, salaries, and annual incomes have not been rising robustly during this period, even as there's been an extended period of what economists regard as full employment. Price inflation has been growing faster than wage inflation, so the purchasing power of wages has actually gone down. You're able to buy less with every dollar you earn when you have buying power that's been eroded.

What in the past might have seemed like a necessity is all of a sudden at risk, and so a $4 cup of coffee at Starbucks or a $5 plus value meal at McDonald's becomes a luxury under those circumstances. And all of a sudden, even though that's not occurring in the context of a technical recession, it feels recession-like to many. A technical definition, that's irrelevant for somebody who can't afford to buy what they want, much less can afford what they need. Nevertheless, economists acknowledge that the Biden Administration has made significant strides in growing the economy. The challenge associated with the pandemic and then the beginning of the Biden Administration was one of the most immense and difficult challenges that has faced the American economy and, by extension, President and political leaders and the citizenry—one of the most challenging in a century. The performance of the US economy, let's say over the last couple of years as we speak in 2024, has been much more robust and resilient than would have been expected. A direct comparison of hard economic

data shows that the economy under Biden was stronger than it was under Trump across several important measures. Discounting the months most affected by the pandemic, Biden's Administration added a monthly average of 269,000 jobs compared to Trump's 180,000. The S&P 500 Index also saw a 42.1% rise during Biden's term compared to 33.6% over the same period for Trump, hitting record highs in 2024. Overall, the US economy grew by 8.4% since Biden took office compared to 6.5% during the same period under Trump. We brought this economy back from the brink, and we designed our strategy not only to provide for a temporary boost but to lay the foundation for a long-term boom that brings everyone along. But the economy's rebound cannot be solely attributed to the Biden Administration. Part of that is the fiscal response that emanated because of actions by presidents and the House and Senate in spending money to ride to the rescue. The other part of it is that the Federal Reserve gets pretty

good marks for having eventually shown up and restricting interest rates and allowing for a sustainable economic expansion. Experts also say that the very measures aimed to boost the economy were also what hurt the consumers in the end. As a result of the various stimulus packages enacted in 2020 and 2021, economists estimate that American households had accumulated $2.5 trillion more in savings than they would have had without the stimulus bills that were enacted under first Donald Trump and next Joe Biden. And so when the economy reopened, that huge pile of accumulated savings came up against an economic reopening that was spotty and famously the supply chains that helped companies in the United States produce what American consumers wanted. Those Supply chains were snarled and disrupted. So if inflation is too much money meeting too few goods, right, the stage was set for a classic Spike of inflation, and that's exactly what happened. To combat this inflation, the Federal Reserve has had to raise interest rates to relatively high levels, and that affects the interest rate that you pay on your credit card.

state it affects the interest rate that you face. If you want to take out a loan to buy a car, it certainly affects the interest rate if you want to take out a mortgage and buy a home. And so, uncertainty about the level of prices, declining inflation-adjusted wages and incomes, and really high interest rates all add up to consumers not feeling great about how things have been going over the last few years. Economists are still debating how much Biden's stimulus can be blamed for the burden of inflation. President Trump had also signed a $2.2 trillion stimulus bill into law during his time in office, sending out $84 billion worth of financial relief to those affected by the pandemic over three rounds of stimulus checks. When the American Rescue plan was signed, the unemployment rate was falling, not rising. The economy was growing, not shrinking. Households were sitting on a whole bunch of excess savings. Putting a bunch of stimulus into a growing economy doesn't make sense. So, if the American Rescue plan had never happened, we still would

have had an inflation problem, but in my view, the American Rescue plan took what would have been a moderate but still real inflation problem and turned it into a pretty severe inflation problem. And I would even go so far as to say that the American Rescue plan was probably the most reckless fiscal policy pursued by the US government in decades. We do not know and may never know what would have happened to the economy if the Biden administration had done nothing to further stimulate it after it took office. The American Rescue plan passes any cost-benefit analysis with flying colors for two reasons. One, I know critics want to assign inflation to the American Rescue plan. Inflation went up in every advanced economy, and in fact, it went up more in Europe and the UK than it did here. And that's because of their closer exposure to the war as the supply chain snarl-ups began to resolve. You saw inflation come down, and at the same time, the rescue plan reduced child poverty, preserved union pensions, helped families and businesses get to the other side of the

crisis. So, the two-fold reason why the critiques of the rescue plan are wrong is because they misdiagnose inflation as a uniquely US problem, and they ignore the benefit side of the ledger. Former President Trump's campaign did not respond to CNBC's request for comment, but a consensus among economists is that neither Biden nor Trump is entirely to blame. I think it is never fair to blame or credit a single president for what's happening in the economy when those things were happening before that person even took office. The primary causes of inflation were really two things. One was the imbalance between supply and demand as supply chains really seized up, and we had the lack of production of a lot of things, and we had immense demand for a lot of things that couldn't not be or wasn't matched by production. Sort of adding a second leg to inflation was Russia's invasion of Ukraine. That led to massive increases in commodities prices and energy costs. To some degree, consumers themselves were to blame for the inflation because who is

it that has the say over demand for goods and services. It's all the people who buy those things, and so consumers themselves help to inflame this imbalance between supply and demand. But you know, if you're talking about putting food on the table, you don't have a lot of choice. You might have some choice in what you buy, but you don't have choice in whether you're going to buy food and energy and paying for shelter. At the end of the day, a president often has very limited impact on how the economy performs. Americans have a tradition of either giving credit for the performance of the economy to the president or giving blame to the president for the performance of the economy. And the irony about all that is whether that's deserved or not, the presidents themselves try to take credit or blame shift with respect to the performance of the economy, whether it's warranted or not. I think ascribing great control of the economy to any given president is a fool's errand, and what I

mean by that is the US economy, which is connected to the global economy, is much more complex than that. My sense is ultimately our US Federal Reserve and its decisions are much more important, much more relevant, and meaningful for how the economy performs than a US president. The unprecedented nature of the pandemic also makes it challenging to directly compare the economies during Biden's and Trump's terms. The sharp break that we see in sentiment is not so much between Trump and Biden, but I would say before and after the COVID pandemic. A talking point that's being used against President Trump is that he lost more jobs than any president ever. Those job losses that occurred at the end of his term were a consequence of the pandemic. I think President Biden is being heavily criticized about the inflation the United States has experienced. The American Rescue Plan made our inflation problem a lot worse, but we still would have had an inflation problem even if it weren't for the American Rescue Plan. You can't look at the last five, eight, ten years without sort of

saying asterisk maybe 10 asterisk there was this pandemic. There's just no way to separate that out, and if you do, you risk being wrong or simply overlooking an immense event in recent American and human history. Even so, the Republicans may have the advantage on economic issues in voters' eyes. Every survey that I know of tells me that Republicans are seen as having the advantage for the management of the economy. Time will tell whether that gap can be narrowed, but right now, the gap is real, and it is significant in its size. For the Democrats, it's up to Kamala Harris to convince voters of what she can achieve with the economy. I think Vice President Harris was given an opportunity, in a sense, by President Biden when I think mistakenly he seized upon this phraseology of bomic, which was to take essentially too much credit for the performance of the US economy, which unbeknownst to him ended up being translated to blame for the inflation that most Americans associate with their current experience being at the top of

the ticket, rather than being at the bottom of the ticket, gives her the opportunity to state her own priorities, reintroduce herself to the American people. It's not clear that Democrats can score an outright win when you turn to visions of the future as opposed to arguments about the past, but I think they have a better chance of narrowing the economic gap that now separates the two parties in the eyes of the American people if they focus on the future.

Why It Feels Like The U.S. Is In A Recession

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