Marshall Helmberger

One of the most under-reported stories of 2024 is clearly the incredible economic progress that the United States has made in the past two years, one that has left Americans objectively better off than at any time since the start of the pandemic, and arguably enjoying the best economic times in decades.
It’s not by accident. President Biden and Vice President Kamala Harris have instituted economic policies, with the support of Democrats and even a few moderate Republicans in Congress, that are directly responsible for the most robust economic expansion of any country in the world, post-pandemic.
The recent decision by the Federal Reserve to begin to aggressively cut interest rates is a signal that the most troublesome economic aspect of the post-pandemic world — high inflation globally — has been contained here in the U.S. Inflation, which peaked at 9.1 percent in the U.S., and significantly higher in many other countries, is now down to the Fed’s target rate of two percent, a reduction that was achieved without a recession.
The decision to lower interest rates, which Fed board members said is a trend we can expect to continue, is going to further strengthen an economy that is already growing at an impressive rate. The Commerce Department reported last week that the economy grew at a robust 3.0 percent in the second quarter, while the GDP growth from the first quarter, which had been softer, was revised upward to 1.6 percent. Since the second quarter of 2021, the first full quarter under Biden’s tenure, the economy has grown at a rate of 2.9 percent, the most robust economic performance of any president since Bill Clinton, and 30 percent better than the pre-pandemic average of 2.0 percent GDP growth under President Trump.
Speaking to the Economic Club of Washington, D.C., a non-partisan forum, in the wake of the interest rate cut, Biden reminded the audience that when he and Vice President Harris took office, it was in the midst of the worst pandemic in a century and the worst economic crisis since the Great Depression. Despite the seriousness of the situation, they found that the Trump administration (which had spent months focused on stealing the 2020 election rather than addressing the concerns of Americans) had virtually no plan in place to combat the economic challenges posed by the pandemic.
Biden said he came into office not only committed to delivering immediate economic relief to Americans, but to transform the economy in a way that increased fairness and opportunity by investing in average American families.
Without any Republican votes, Biden immediately won passage of the American Rescue Plan, preventing an anticipated wave of evictions and bankruptcies while also addressing the very real health emergency posed by the pandemic. It provided additional funding for state and local governments to prevent layoffs of teachers, first responders, and other public employees. It expanded the child tax credit, which brought child poverty to its lowest level in American history. It also included provisions to protect union pensions.
Policy adjustments by the administration helped untangle the supply chain issues and resulted in huge increases in cargo volume at U.S. ports, which had tanked in the wake of the pandemic and created shortages of such vital goods as baby formula.
As shortages inevitably prompted price increases, Biden and Harris were under pressure by conservatives and many moderates to cut back on federal spending in the wake of the American Rescue Plan. It was the same policy prescription that led to slow growth and years of economic pain in the wake of the 2008 financial collapse. Biden and Harris learned that lesson, however, and, rather than austerity, they won passage of the infrastructure bill, with some GOP support (not including Rep. Pete Stauber), designed to rebuild roads and bridges, ports, trains, and to bring high-speed internet to every American. The new law required the use of American workers and products as part of these projects.
The administration also won passage of the Chips and Science Act, which is in the process of bringing semiconductor manufacturing back to the U.S. Companies around the world are currently pouring money into new manufacturing capacity like never before, to take advantage of incentives built into the new law. As of April of this year, that investment was running at an eye-popping rate of $190 billion on an annualized basis. Indeed, according to a new report from Moody’s Analytics, factory construction in the U.S. is at the highest level in over half a century, and that’s due almost entirely to Biden/Harris administration policy. While that policy is currently keeping construction workers busy, it will soon be employing hundreds of thousands of new factory workers, and that’s on top of the 700,000 new manufacturing jobs the administration has already created. Indeed, the Biden/Harris administration has done more to turn around manufacturing in the U.S. than any administration in generations.
What’s more, the administration is creating hundreds of thousands of new jobs in clean energy as part of passage of the Inflation Reduction Act, while also allowing Medicare to negotiate drug prices. American workers are seeing steady wage gains and the racial wealth gap has declined. Oh, and more Americans have health insurance than ever before, thanks to the Affordable Care Act, which Trump has repeatedly said he wants to dismantle. Small business owners, by the way, are among the biggest beneficiaries of the ACA, which is providing insurance coverage for millions of our nation’s entrepreneurs.
The Biden/Harris administration has shown that it is possible to safeguard wages for workers and promote economic growth while simultaneously bringing down inflation. It comes down to smart policy, which can be created when smart people are put in charge of economic policy. It’s good for workers and its good for investors, who are enjoying a stock market at all-time record highs.
Indeed, the Biden/Harris administration has shown the fallacy of trickle-down economics, which has never generated economic success, as the Trump administration showed once again with their economic policy of tax cuts for the rich and big corporations. It’s no surprise, in other words, that of the 51 million net jobs created in the U.S. since 1988, 50 million have come under Democratic presidents. Biden and Harris have shown more clearly than ever that government policy and investment can make a real difference in the lives of average Americans when it focuses on growing the economy from the middle out.
But Biden, in his message to the Economic Club, concluded that the gains the U.S. has made are built on a foundation that Donald Trump threatens to undermine. Foreign companies look to invest in the U.S., he said, because they feel secure in the rule of law that provides security for those investments. While he didn’t mention Trump by name, he didn’t have to. Everyone there was well aware of Trump’s efforts to politicize our system of justice to bend to his whims and self interest. Trump, in his ignorance, threatens to undo everything that has made America so successful.
Credit to Professor Heather Cox Richardson for some of the information in this column. Her widely-followed podcast, Letters from an American, is highly recommended.