Biden had economic tailwinds. Big time. Look at the run up in markets leading into 2021 and the amount of liquidity folks had between savings from Covid and tax free RE-fi proceeds from ultra low interest mortgages.
And despite the fact that anyone with a brain could see that we had already recovered economically. And the only ones super focused on keeping things shut down in early 2021 were politically minded folks who couldn’t bear the thought of agreeing with Trump / DeSantis - the democrats on a straight party line injected another trillion dollar stimulus.
And to make matters worse kept supply chains constrained with continued shutdowns and unnecessarily long quarantine rules for anyone 15 people removed from COVID. We had vaccines at that point. But the continued virtue signaling and shaming kept supply chains eff’d.
Straight party line. Demand >>>>>>> Supply = inflation. I blame the fed also for acting too late.
Defenders will say that global inflation proves this was not a US issue. True to some extent but remember that the World turns on US economic policy, the cost of US treasuries, US currency, etc, etc. Bottom line we were going to have some inflarion coming out of Covid but our Government threw gas on it.
When inflation hits as hard as it does, honestly the President probably gets too much blame. Covid took out Trump. Indirectly it is going to take out Biden as well - because the aftermath of Covid led to inflation which sure as shit effects everyone and is the number one reason he’s polling so poorly.
All that said - the things that help on inflation that you can control from a government standpoint are supply side economics and restraints on policy injexting more liquidity into the system.
Supply side constraints: government regulation in general and rhetoric painting big business as the enemy. Shutdowns. Government lawsuits shutting down M&A. Anything that keeps businesses operating at less than full potential
Excess demand: government spending. Stimulus. Government led liquidity infusions.
Inflation Would have been a thing regardless, but policy poured gasoline on it.
Presidents don’t control interest rates, but policy leading to rampid inflation forced the fed to raise them: too late and way too fast in my opinion. But had we done a better job with policy a few years ago, mortgage rates would be in the 4-5 range. Not the 6-7 range. Both Biden and Trump II should benefit from falling rates beginning this summer.
Bottom line - inflation would have been bad but not as bad with republican economic policy. And going forward in general the basic Econ 101 rules of supply / demand work better IMHO with republican policy: less regulation being the biggest “Trump II economic plan” that works much better than what we have now. It isn’t a Trump thing per se. It is a general principal of capitalism thing.
