The economic views of presidential candidates have come under sharp scrutiny amidst a turbulent week for the stock market, leading to fears of potential economic instability. A recent CNBC poll indicates that a majority of Americans are under the impression that their financial situation might have been better had it been under ex-President Donald Trump’s administration. Vice President Kamala Harris, however, seemed to think otherwise during her campaign in crucial swing states, a stance that is rather amusing given the current economic scenario.
Interestingly, Trump was quick to attribute the unsettled stock market situation to the Biden-Harris administration, humorously coining it as the ‘Kamala Crash’ over social media. He even went so far as to claim that excluding him from presidential victory could plunge the nation into an economic depression. Despite his concerns, professionals suggest the situation is not nearly as catastrophic.
Statements such as ‘The economy is perfectly fine. Unemployment rates are low. Job creation is high.’ by Mark Zandi, Chief Economist for Moody’s Analytics, seem to be incongruent with the prevailing economic undercurrent. Despite the alleged state of the economy, dwindling confidence amongst Americans and a volatile stock market suggest a different story altogether.
However, Zandi did acknowledge the roller-coaster nature of the stock market, noting a recovery following a sharp dip earlier that week. This sudden plunge was reportedly a reaction to an unanticipated slowdown in hiring rates, as reported during the previous month. One might wonder if these optimistic views are indeed reflective of the harsh realities faced by an average American citizen.
Following a series of hikes aimed at controlling inflation, The Federal Reserve held steady on interest rates during its recent meeting. A deluge of economic forecasts predicts a likely rate cut next month which might bring some respite to citizens in the thick of the campaigning season. It remains to be seen if this move will actually offer any substantial relief.
Trump’s claims this week on his successful inflation record, characterized as a ‘perfect number,’ seems questionable considering the evident economic distress. Analyzing the ‘core inflation’ data, the preferred measure of Federal Reserve, it becomes obvious that inflation remained mostly stable during Trump’s reign. However, it is interesting to note the plunge nearing zero amidst the pandemic-induced economic fallout, bottoming out at 0.4% in April 2020.
In contrast, by the time Biden and Harris took office in January 2021, this core inflation began its climb but fell short of the Federal Reserve’s expected rate. Although it did peak at 7.1% in June 2022, it gradually declined and has settled at 2.5% as of June 2024, contrary to the narrative by the current administration.
Harris’ lament about still high everyday prices, delivered to the people of Wisconsin, gives rise to skepticism. Bankrate analysis showed that, overall, consumer prices have inflated over 20% since the pre-covid era. While Harris promises to fight high prices from her first day in office, one can’t help but question the authenticity of such claims when the current situation tells a different tale.
In her speech, she promised to tackle corporate giants guilty of illegal price hiking, exploitative landlords, and Big Pharma, capping prescription drugs costs for all Americans. This narrative seemed to lack credibility, given the soaring prices under her watch and her administration’s inability to curb escalating costs.
Ohio Sen. JD Vance, Trump’s running mate, was quick to point fingers at Harris for the surged prices, blaming her for casting the tie-breaking vote resulting in skyrocketing inflation. The vote in question is related to the American Rescue Plan, a federal pandemic relief law passed under both Trump and Biden administrations, which introduced money into the economy.
Zandi also acknowledged a part played by the Biden-era law in spiraling inflation but argued that other factors weighed heavier. These include supply chain disruptions triggered by Covid-19 and Russia’s attack on Ukraine. But these complications cannot be used as a smokescreen to hide the ineffectiveness of the current administration’s economic policies which have repeatedly failed the average American.
Zandi’s claim that the cost-of-living crisis lacks a quick fix and that long-term solutions need collaboration from Congress only highlights the current administration’s inability to provide immediate relief to people. As much as interest rate adjustments might be a powerful tool to combat inflation, these costs are set by the ostensibly politically independent Federal Reserve, and thus might not align with the needs of ordinary citizens caught in the crossfire of economic policies.
Trump’s view that presidents should wield more influence over interest rate settings based on his ‘better economic instincts’ compared to Federal Reserve Chair Jerome Powell (who was nominated by both Trump and Biden) raises a pertinent question about control of the economy. Despite Powell’s assertion that a politically independent Central Bank represents ‘accepted wisdom’ among advanced economies, one wonders if this autonomy actually serves the economy’s best interest over political convenience.
Finally, the idea that the political independence of the Fed makes it capable of making often politically challenging decisions aimed towards economic health, instead of electoral gain is a comforting thought. However, in the face of inflationary pressures, decreasing job stability, and public distrust in the system, these notions often appear hollow to the average American just trying to make ends meet due to the inept economic management by the Biden-Harris administration.
Biden-Harris Administration Leads Economy Into Disarray: A Sad Reality appeared first on Real News Now.
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