Bidenomics Driving US Economy Into Dead End
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Joe Biden's recent panegyric on "Bidenomics" is detached from reality given that the train of the US economy is moving into a dead end, US Professor of Economics and Politics Jack Rasmus told Sputnik.
President Joe Biden again touted "Bidenomics" – a set of policies under his administration – during his Philadelphia visit on July 20, 2023. According to the US president, his team's priority is "to strengthen the middle class." To that end, "over 13 million new jobs [have been] built across the country" while "unemployment is been below 4%" during his presidency. The president also cited growing wages. He especially wooed unions and US workers, and almost equaled "the American Dream" and "Bidenomics." However, the garden is not as rosy as the US president describes, according to Dr. Jack Rasmus, professor of economics and politics at St. Mary's College in California.
"First of all, 13 million jobs," Rasmus told Sputnik's Critical Hour podcast. "Virtually all those people returning to work after COVID. That's not new job creation. And to the extent there are new jobs, most of them are part time temp, lower paid, so forth kind of jobs. When he says 4% unemployment, well, that's only for full time workers. What about the 50-60 million people who are part time temp and gig? Well, it's much higher. It's like six or seven percent unemployment."
"These 13 million are returning to second and third jobs in lower paid jobs. You see, the government doesn't measure people with work. It measures jobs. So if you add a second or third job, well, it looks like jobs are growing, but it's still the same one worker who works two or three jobs. That's the jobs reality. What about wages? Oh, he says 4% nominal wage increase. Well, that's an average. It's skewed to the top. People in the top 10% of the labor force are getting much more than 4%. And that, by the way, includes managers and CEOs, supervisors, tech workers, and others in a few industries. And also, you got some states, blue states, who are raising that abysmal minimum wage. At the bottom and at the top, you got wage growth. But in the middle you don't have wage growth, but it averages out to 4%. Makes it look good," the economist continued.
15 July 2023, 02:04 GMT
No, Biden Hasn't Defeated Inflation
During his speech, the US president took credit for lowering inflation by saying that inflation has slowed every single month for the last 12 months. "The US has the lowest inflation rate of any major economy in the world — the so-called G7," Biden said, adding that it had gone down from 9% to 3%, and will to go down lower.
"What about inflation? He says 3% inflation. Food inflation, even though we've got harvest going on, is 5.7%, almost double the 3%," Rasmus continued. "Rents are almost 8%. You know, so if you look at services, which is 8% of the economy, that's actually rising. Last month it was 6.2%, previous month was 5.3%. And we've got OPEC raising crude oil prices now. We got the breakdown of the grain deal there in the Ukraine. We got residential home prices now rising. We got corporations still price gouging. A good example is your bread and bakery companies. General Mills, I think it was bragging that they doubled their revenue without selling more bread. Well, the only way you do that is price gouge. So we got price gouging going on and certain indications going that prices are going to rise here now and not go down."
US Economic Growth is Slow and Bleak
When it comes to the US gross domestic product (GDP) – one of the primary indicators used to gauge the health of a country's economy – last year it grew only 1%, December to December, as per the economist. Meanwhile, the Federal Reserve predicts another 1% growth this year.
"Think about that: they threw $8 trillion fiscal and monetary stimulus at the economy and COVID in 2021-22," the expert said. "What did we get for it? A 1% (…) of economic growth. And he brags about the fact that, 'Oh, look,' you know, 'we're spending all this money.' Yeah, he's implementing austerity, cutting social programs, and three acts $1.65 trillion subsidies to corporations, the Inflation Reduction Act, so-called the Infrastructure Act, and the CHIP and Semiconductor Act. They're all big slush funds for corporations to invest. Well, he's financing that through austerity and social programs. Well, that doesn't look like such a great deal to me. You know, the jobs and the wage numbers are manipulated. Inflation is still continuing, particularly in those areas where people really feel it. Food and energy and GDP is just limping along. That's Bidenomics!"
Team Biden Undermining 'US Economic Empire'
Per Rasmus, funding the US proxy war in Ukraine under these conditions doesn't look like a good idea. The economist noted that the US has spent over $200 billion on Ukraine, adding that a lot of that doesn't show up in the in the budget because of the fact that it's what's called "the overseas contingency operations." And the US is continuing to increase the military spending at the expense of social programs and through austerity measures, the economist noted. One should also add here over $600 billion just interest on the debt, Rasmus continued, adding that in three to four years, it's going to be $900 billion. In addition, the US government is having deficit after deficit with the US national debt growing up to $34 trillion and higher. "How can you sustain that?" the economist asked.
On top of that, BRICS – Brazil, Russia, India, China, and South Africa – and some other developing countries are gradually shifting away from the dollar. Rasmus warned that if the demand for dollars really collapses, that's going to reverberate on the US economy, because "they won't be able to get foreign financing of the budget by buying Treasuries and so forth." According to the expert, the US is teetering on the edge of crisis and Team Biden is not making it easier.
Instead of making the American Dream come true, the Biden administration is undermining the US, according to the economist.
"History will show that Joe Biden shot the American Empire in its foot now with the sanctions and this war in Ukraine, because it's undermining the US economic empire. As we, as I said earlier, you know, the move away from the dollar and international money payments system and the International Monetary Fund and all that's occurring. That train has left the station and that's going to undermine the empire even more than fiscal policy, which is serious, and monetary policy, which is at a dead end," Rasmus concluded.
For more in-depth analisys on the issue check our Critical Hour podcast.
