Treasury Secretary Janet Yellen offered a rare moment of Biden administration transparency on the economy this week.
“Well, I think most Americans know that prices are not likely to fall,” Yellin told ABC News on Sunday. “It’s not the Fed’s objective to try to push the level of prices back to where they were.”
And with that, the cat was out of the proverbial bag.
This key admission came just as Team Biden is once again trying to revise its economic message with President Joe Biden’s job approval numbers nearly in historically bad territory. If ever there was a time for a political reset, this is it. But the messaging wizards seem to have failed the president when it comes to selling his economic record to what is an unhappy and unconvinced electorate.
The problem is, when it comes to their own personal economies, voters know better.
As prices began to skyrocket shortly after passage of the “American Rescue Plan,” people didn’t buy the administration’s first narrative that “inflation is only transitory.” As support for Biden’s economic policies nosedived, the White House messaging team, inexplicably, created “Bidenomics.” I suppose they believed that a catchy marketing term would persuade “uninformed” voters that the economy was improving and life under Biden was good, if not great.
But again Biden’s numbers didn’t improve. After pressure from congressional Democrats to drop the “Bidenomics” slogan, it disappeared briefly from the White House’s lexicon, but with nothing else to sell, it wasn’t long before Bidenomics 2.0 appeared on the scene with a new and improved focus — democracy and taxes — and rumbles that the White House thinks the way to win the economic issue now is to contrast Bidenomics with so-called “Trumpenomics.”
Biden and his team don’t seem to understand the significant and potentially insurmountable disconnect that exists between the president’s economic message and what the American people believe — and why they believe what they do.
The answer can be found in the Bureau of Labor Statistics’ numbers.
The Biden administration likes to tout its success in getting inflation down to under 4 percent for seven consecutive months. But when he came into office, inflation was at 1.4 percent in January 2021, and had been under 3 percent for 109 consecutive months.
So even at the current levels, down from the highs of summer 2022, the Biden administration has not yet matched prior presidents’ inflation levels going back almost a decade, spanning Donald Trump’s entire presidency and the majority of President Barack Obama’s tenure.
In March 2021, when the American Rescue Plan was signed, the inflation rate was 2.6 percent. By May 2021, it was at 5 percent, starting a 23-month run at that rate or higher. The peak inflation run was a 12-month period from December 2021 through November 2022 of 7 percent or higher.
While the monthly, year-over-year rate has certainly dropped, the electorate sees this from a different perspective — by how much prices have gone up since Biden was inaugurated. That is more important to the electorate, as prices have increased by 17.3 percent, what The Winston Group has termed the Presidential Inflation Rate (PIR). In looking at the performance of the previous seven presidents at the same point in their terms, only President Jimmy Carter had a larger increase.
The rise in gas prices is a good example of why voters remain skeptical of Biden’s claims.
There is no question that gas prices have come down significantly since the summer of 2022, when cumulative gas prices had increased by a staggering 107.4 percent, measuring from Biden’s inauguration month. But gas prices are still 35.1 percent higher than what they were in January 2021. That’s a tough sell.
So is telling consumers that food price inflation has dropped to below 3 percent, when overall food prices have gone up 20.1 percent since Biden took office. As with gas prices, only Carter had a higher increase in food prices at this point in his term.
Electricity costs have also risen significantly, increasing cumulatively by 25.1 percent. This is the largest price increase of any of the last seven presidents — and yet Biden decides this week to clamp down on natural gas.
Part of Biden’s economic message has centered on wage growth by focusing on short-term data rather than the longer-term impact. If you only look at the increases in hourly wages over the last eight months, wages have come in slightly ahead of inflation; but for the prior 25 months, wages trailed inflation. Overall, since Biden’s inaugural, hourly wages have cumulatively increased 14.5 percent, while inflation has gone up 17.3 percent.
This means inflation has outpaced hourly wages by 2.8 percent so far in Biden’s term. Looking at weekly wages, however, the picture gets worse. Weekly wages have cumulatively increased 12.2 percent, leaving a 5.1 percent shortfall due to inflation. A 5.1 percent reduction in purchasing power is a significant number.
So how does Biden’s Presidential Inflation Rate and his record on cumulative wages compare to former President Trump’s at the same point in their respective terms? As stated earlier, Biden’s PIR is at 17.3 percent, while Trump’s was at 5.8 percent in December 2019. Of the last seven presidents, only George W. Bush had a lower rate than Trump at 5.3 percent.
In terms of gas price inflation, Biden is at 35.1 percent and Trump is at 10.9 percent. Food inflation — Biden 20.1 percent and Trump 4.7 percent; and, finally, electricity — Biden 25.1 percent and Trump 2.2 percent.
Looking at Biden’s record on hourly wages, cumulative hourly wage increases trail his PIR by 2.8 percent. For Trump, hourly wages exceeded his Presidential Inflation Rate by 3.3 percent. So, in terms of hourly wages versus inflation, Trump did better by 6.1 percent.
In terms of weekly wages, Biden is at minus 5.1 percent versus inflation, while Trump was at plus 3 percent at the same point in his presidency. So, Trump did 8.1 percent better than Biden in keeping wages ahead of inflation.
Even a cursory look at these economic comparisons explains why the electorate disapproves of Biden’s handling of the economy and inflation by as much as 20-point margins. Contrasting Biden’s record with virtually any other president, except Carter, only makes his own economic record look worse.
Biden seems to have forgotten that voters have long memories.
David Winston is the president of The Winston Group and a longtime adviser to congressional Republicans. He previously served as the director of planning for Speaker Newt Gingrich. He advises Fortune 100 companies, foundations and nonprofit organizations on strategic planning and public policy issues, as well as serving as an election analyst for CBS News.