The only positive economic argument that the media had to make for the Biden administration was that the economy was growing and jobs were being added.
t was a transparently bad argument because when you plunge a nation to the bottom of a well, anything after that is likely to look like growth. Pandemic shutdowns had devastated the economy. The loosing of pandemic regulations allowed people to go back to work and gave businesses the confidence to hire workers. The result, much like the aftermath of world wars, saw an artificial growth that wasn’t a sign of economic prosperity, but relative liberalization.
But even that argument isn’t looking so good anymore.
The U.S. economy shrank in the first quarter as supply disruptions weighed on output, but underlying strength in consumer and business spending suggested growth will soon resume.
The decline in U.S. gross domestic product at a 1.4% annual rate marked a sharp reversal from a 6.9% annual growth rate in the fourth quarter, the Commerce Department said Thursday. The first quarter was the weakest since spring 2020, when the Covid-19 pandemic and related shutdowns drove the U.S. economy into a deep—albeit short—recession.
The drop stemmed from a widening trade deficit. Imports to the U.S. surged and exports fell, dynamics reflecting pandemic-related supply-chain constraints.
People are still spending money, but with inflation, it’s not like they have a choice. When the price of gas or the cost of bread keeps going up, people have to spend more money just to survive. Likewise anyone who needs a home is going to have to pay inflated prices or deal with rising rents.
None of this is a sign of prosperity. It’s a symptom of the misery of a deeply unhealthy economy that no amount of spin can disguise.
We’ve outrsourced the productive parts of our economy while retaining either the lowest paid or the most unstable parts of it in our own country.