Tangle - "Bidenomics" and the state of the economy.

Episode Date: July 31, 2023

On Thursday, the Commerce Department reported that the U.S. economy grew by a 2.4% annualized rate in the second quarter, beating the 2% estimate by economists and showing the latest sign that a U.S. recession is unlikely. At the same time, the personal consumption expenditures price index increased just 2.6%, a sign that inflation is continuing to cool. Plus, a reader question about wind turbines and environmentalism.You can read today's podcast here, today’s “Under the Radar” story here, and today’s “Have A Nice Day” story here. Tickets to our event in Philadelphia on August 3rd are available here!Today’s clickables: Quick Hits (1:45), Today’s Story (03:51), Left’’s Take (06:14), Right’s Take (10:53), Isaac’s Take (15:32), Your Questions Answered (20:30), Under the Radar (24:31), Numbers (25:25), Have A Nice Day (26:05)You can subscribe to Tangle by clicking here or drop something in our tip jar by clicking here.Our podcast is written by Isaac Saul and edited by Zosha Warpeha. Music for the podcast was produced by Diet 75.Our newsletter is edited by Bailey Saul, Sean Brady, Ari Weitzman, and produced in conjunction with Tangle’s social media manager Magdalena Bokowa, who also created our logo.--- Send in a voice message: https://podcasters.spotify.com/pod/show/tanglenews/message Hosted on Acast. See acast.com/privacy for more information.

Based on Charles Yu's award-winning book, Interior Chinatown follows the story of Willis Wu, a background character trapped in a police procedural who dreams about a world beyond Chinatown. When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history, and what it feels like to be in the spotlight.

Interior Chinatown is streaming November 19th, only on Disney+. Chinatown is streaming November 19th, only on Disney+. From executive producer Isaac Saul, this is Tangle. Good morning, good afternoon, and good evening, and welcome to the Tangle Podcast, a place where you get views from across the political spectrum, some independent thinking, and a little bit of my take. I'm your host, Isaac Saul, and on today's episode, we're going to be talking about Bidenomics and the economy more broadly. There's been some interesting new data that has come out that has sparked a big debate

about President Biden and the job he is doing related to the economy. We're going to be talking about that and sharing some commentary from the right and the left, and then my take as always. Before we jump in, though, unfortunately, we have to start this edition off with a correction, a pretty stupid non-political correction, but we did an international news edition last week. And in that edition, we stated that the New Zealand women's soccer team had pulled off an incredible one zero upset of Sweden in round one. In fact, New Zealand beat Norway in the first round, not Sweden. You know, Norway, Sweden, what's the difference really from America's point of view? I'm just kidding. I'm sorry. It was a dumb mistake. This is our 88th correction in Tangle's

209-week history and our first since July 20th. We track these corrections and place them at the top of the podcast in an effort to maximize transparency with our listeners. All right, with our correction out of the way, we'll jump in, as always, with our quick hits. First up, Congress is now on recess until early September, while President Biden and his family are vacationing in Rehoboth Beach, Delaware. Number two, former President Trump was charged with a new count of retaining classified material. He has also been additionally charged with attempting to delete security footage to prevent it from being reviewed by investigators. Meanwhile, a federal judge in Florida dismissed his defamation lawsuit against CNN. 3. Senate Minority Leader Mitch McConnell,

the Republican from Kentucky, vowed to serve out his full term after an apparent health episode during a news conference last week. Number four, the United States military is hunting for malicious computer code it believes China has hidden deep inside networks controlling power grids, communication systems, and water supplies that feed military bases in the United States. Number five, a U.S. aid worker and her child were kidnapped in Haiti while on ministry duty. The State Department is urging non-emergency personnel to leave the country. President Biden is taking a victory lap as the latest report from the Bureau of Labor Statistics shows 30 straight months of job gains and inflation hitting its lowest point in two years. It's perhaps no surprise that President Biden still isn't getting much credit for an improving

economy. People aren't feeling it, they tell us. So his approval ratings for handling the economy are tied for an all-time low, only 34 percent approve. This is a source of endless frustration for Biden aides who have begun to use the term Bidenomics on a nearly daily basis to try to turn that perception around. But what exactly is Bidenomics? The man himself has a definition. First, making smart investments in America. Second, educating and empowering American workers to grow the middle class. And third, promoting competition to lower costs to help small businesses. On Thursday, the Commerce Department reported that the U.S. economy grew by a 2.4% annualized rate in the second quarter, beating the 2% estimate from economists and showing the latest signs that a U.S. recession is unlikely. At the

same time, the personal consumption expenditures price index increased just 2.6%, a sign that inflation is continuing to cool. Consumer spending inventory growth increases in non-residential fixed investment, and government spending were behind the rise in growth, increases in non-residential fixed investment, and government spending were behind the rise in growth, according to CNBC. Meanwhile, the unemployment rate remained at 3.6% for June, the same as it was a year ago, and non-farm payrolls have grown by $1.7 million in 2023 so far. Wages are also continuing to rise and are finally outpacing inflation. With traditional measures for the economy showing strong results and inflation cooling,

President Biden is pitching a new term to voters, Bidenomics, his rejoinder to Reaganomics. The backbone of Bidenomics is industrial policy or government spending on heavy industry, such as clean energy and semiconductor production. Biden is framing the latest bout of positive economic signals as proof that his agenda is working. Specifically, his administration is touting a $210 billion chipmaker investment in U.S. factories and the expansion of clean energy projects around the country, many of which were sparked by government subsidies. However, while Biden is continuing to sell his economic agenda to Americans, he's running headfirst into widespread pessimism. Earlier this month, CNBC released its All-America Economic Survey, which found just 37%

of respondents approve of Biden's handling of the economy, while 58% disapprove. 79% of Americans say the economy was just fair or poor, while only 20% said it was excellent or good. Similar results have been seen in polling from outfits like Monmouth. In other places, consumer sentiment has jumped, but only in recent weeks. Today, we're going to explore some arguments about binomics and the current state of the economy from the left and the right, and then my take. First up, we'll start with what the left is saying. The left is celebrating the economy and pointing to the variety of data suggesting the economy is healthy. Many emphasize President Biden's strategies and the correlating growth, low unemployment, and rising wages. Others suggest

people feel negative because there is a lot to feel negative about, especially for those most in need. The Washington Post editorial board said it's time to celebrate and aim higher. For the first time in a while, the nation and its policymakers can step out of crisis mode, the board wrote. The surprises keep coming. Growth was better than expected this spring. Inflation is cooling off faster than anticipated. Unemployment remains near half-century lows. Optimism is picking up. Consumer spending remains solid. Wages are now rising faster than inflation. UPS workers are not going to strike after the company gave them a large raise. The stock market is near all-time highs. Wall Street banks no longer predict an imminent recession. Business investment is picking up. Even housing

appears to be turning around. Mr. Biden is eager to take credit for this Goldilocks economy. The latest data show government investments in infrastructure and manufacturing are helping, but they are modest so far in a $25 trillion economy. The Federal Reserve's aggressive battle against inflation has played a bigger role. But the largest factor of all appears to be an economy returning to normal after three years of turmoil, the board said. The country's good fortune offers a chance to address long-term problems, and at the top of the list are the $32 trillion national debt and immigration. In fortune, Jeffrey Sonnenfeld and Steve Tyen said binomics critics are being proven wrong, and happy days are here again. critics are being proven wrong, and happy days are here again. Remember how just five months ago,

leading economic voices were predicting a catastrophic Category 5 economic hurricane this year? The astounding 2.4% GDP growth revealed this week with plunging inflation, historically low unemployment, and corporate profit reports soaring past expectations have knocked the wind out of the fact-free cynics, they said. It's been said that cynics sound smarter than optimists because of the facts they cite, but in this case, they have no facts. Some economic experts insisted high unemployment for five years was needed as a cure for inflation. Now, reality has taken these obsolete economic voices back to school. The economy is pulling off what all these experts said was impossible. Strong growth and record employment amidst plummeting inflation. Inflation is now at its lowest since the pandemic, while commodity prices have plummeted by at least 50% across the board, ranging from energy, food, agriculture, and metals. Even gas prices, which have ticked up

slightly in the last few weeks, are now lower than pre-Ukraine conflict levels. And in almost every major sector, real wages are now growing faster than pre-pandemic with record workforce participation amidst millions of new and returning workers, partially thanks to the workforce training, education, and child care policies that are core pillars of Bidenomics. In Jacobin, Branco Marchetic said, Americans feel negative about the economy because there is a lot to feel negative about. It's true that there are many bright spots in this economy, Marchetic said, but fixating on those metrics masks how badly the economy is treating so many people.

More than 2 million people have lost their Medicaid coverage as of mid-July since President Joe Biden unwound the pandemic emergency declaration, many of them simply thanks to administrative errors, with millions more tipped to lose the affordable, publicly provided health insurance coverage in a country where not having it can mean bankruptcy or death. The end of the declaration also triggered food stamp cuts that deprive 42 million Americans of an average $90 a month, even as high as $250 a month. Evictions are soaring around the country. Homelessness has shot up nearly 40% from last year in major cities like New York and Chicago, he said.

Childcare, which has gone up 220% in cost over the past 33 years and is leading women to drop out of the workforce to save money, is set to get even more expensive this September when federal funding for providers is due to run out. Prescription drugs are so expensive that 9 million people have failed to properly take their medication as a way to trim costs. The highest share of adults, 28%, since 2014, skipped medical treatment due to costs last year. Meanwhile, a March poll found 58% of Americans are living paycheck to paycheck. All right, that is it for what the left is saying, which brings us to what the right is saying. Many on the right criticize Bidenomics, saying the administration and media are cherry-picking

data and ignoring the reality. Some call out the cost of living now compared to before Biden became president. Others say there are still a ton of negative signals for working-class Americans. In town hall, Ted Harvey said the media is cherry-picking data while ignoring the failures. In town hall, Ted Harvey said the media is cherry-picking data while ignoring the failures. Was Bidenomics also responsible for the four-decade inflation high of 9.1% last June? Were the 16.6% increase in inflation since Biden took office? I guess not, Harvey said. While the liberal media paints the picture of a Biden-led economic resurgence, the cost of food is still up nearly 6% year over year.

The price of baby food and formula is still up nearly 6% year over year. The price of baby food and formula is still up 7.5%. Fruit and vegetable costs are almost 9% and 11.5% for bread. The price of pet food, meanwhile, has jumped over 12%. How about monthly rent? Up 8.3%. Biden and his allies are right to realize that the 2024 election will come down to the economy, Harvey said. Electorally speaking, they're better off harping on the economy than affirmative action or gender identity, given that pocketbook issues affect us all. But they're misreading the room. Drawing more attention to Bidenomics is bound to backfire because it only draws attention to its unpopularity.

The numbers don't lie. Inflation is still above the Federal Reserve's own target of 2%. The national mortgage rate exceeds 7%, up from 2.65% when Biden became president, and wage growth isn't keeping up with inflation. So people are less and less able to afford America's cost of living. People are losing money in Biden's economy, and they know it. People are losing money in Biden's economy, and they know it. In Heritage, E.G. Antoni said Bidenomics is quietly robbing you blind. Prices rose 1.4% over the entire year before Mr. Biden took office.

18 months later, prices were rising about that fast in a single month, Antoni said. Inflation remains more than twice what it was when Mr. Biden became president, and prices have already risen 16% during his term. This is devastating for the average American worker. The data tell a different story than the White House. In June, average hourly earnings were $33.58, a healthy 12.2% higher than two and a half years ago. But during that same time, prices have risen even faster, so that the average hourly wage today can buy only what cost $29.03 when Mr. Biden took office. The difference between this inflation-adjusted wage and the nominal wage is a whopping $4.55 an hour. That means the average American worker last month paid an inflation tax of 13.5%, like paying a second income tax. And unlike the federal

income tax, which has deductions, tax credits, and other ways to shield your income, there is no safe harbor in the stormy waters of inflation. Every dollar, everywhere, loses purchasing power as the government devalues the currency to pay for its profligate spending. For the average American worker, it's about $9,100 a year in added taxes that most people don't understand they're paying. In National Review, Jim Garrity wrote about the coming choice. On paper, the current U.S. inflation rate is 3% year over year, a significant decline from the 9% of June 2022, and much closer to the U.S. Federal Reserve's target of 2%. percent of June 2022 and much closer to the U.S. Federal Reserve's target of 2 percent. But judging from the survey responses, Americans are still feeling the effects of explosion in prices from early 2021 to this point past spring.

Based on Charles Yu's award-winning book, Interior Chinatown follows the story of Willis Wu, a background character trapped in a police procedural who dreams about a world beyond Chinatown. When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history, and what it feels like to be in the spotlight. Interior Chinatown is streaming November 19th, only on Disney+. Remember, for most goods, prices haven't gone down to the pre-inflation normal. They've just stopped increasing so dramatically, Garrity said. After a lengthy bout of inflation, the highest in 40 years, it's no surprise that Americans aren't that impressed by a low unemployment rate or a booming stock market, nor is it

irrational for them to feel economic anxiety. The solutions offered over at that socialist publication, Jacobin, are different from what you'll find here, but those writers have a valid point when they observe that much of this debate features multimillionaires insisting to those with modest five-figure incomes that the economy is thriving and that the latter's perceptions of financial hardship are irrational. Mortgage rates are really high by the standards of the past four decades. Car prices are extremely high by historical standards of the past four decades. Car prices are extremely high by historical standards. Gasoline prices aren't as high as the exorbitant prices of

last summer, but they're still high by historical standards. Air travel is much more expensive than before the pandemic. All right, that is it for what the left and the right are saying, which brings us to my take. So first of all, there's no doubt that this economy is doing very well by traditional measures. The writers above have made their points clearly, so there isn't much need for me to rehash the numbers. Generally speaking, when unemployment is low, wages are growing fast, the economy is growing, new businesses are being started, and investment in the U.S. is roaring, the economy is going to get praise from the economic pundit class. Those are the rules we've played by for decades, and they are the rules we have now.

It's also true that after falling behind for a couple years, wages are, in fact, finally outpacing inflation. By these standards, Biden deserves credit. Anyone who praised historically low unemployment and GDP growth under Trump should praise it under Biden, especially considering that it's now happening after a worldwide pandemic. Both presidents deserve some credit for navigating the economic shock that did so much more damage to so many other countries than it did here. Yet, with all of this in mind, I still think the most poignant piece to come out of this was Branko Marchetik's under what the left is saying. It's pretty rare for me to agree wholesale with something I read in a far-left outlet like

Jacobin, but the piece was strong enough that it even earned praise from the staunchly conservative Jim Garrity under what the right is saying. Like Garrity, my policy prescriptions wouldn't closely match Marchetic's, but he is right about the sentiment. Americans are feeling negative because there is a lot to feel negative about. This is and has always been my problem with how our pundits measure economic health. The metrics we use mask what is most relevant for most of the country. GDP growth is great, but can you pay your rent? Having a job is great, but is it paying you enough to cover the cost of a single medical emergency? New business applications are great, but how much debt is on your credit card? When was the last time you missed a rent payment? Can you afford a doctor's visit? Do you have $5,000 saved up in the bank? How about $500? I'd much rather know the answers to these questions than the ones we traditionally use.

Those should be the leads, and when those numbers start drastically improving, that's when the economy is really doing well. Anecdotally, when I talk to my friends and family, here are the kinds of things I hear. Disbelief at how much it costs to put their kids in daycare, or how hard it is to get their kids into daycare in the first place. Shock that a cocktail can cost $18 at a restaurant. Stress about finding an apartment that is in their budget, or the sense of being stuck in an apartment where rent keeps going up uncontrollably. Complaints about exorbitantly expensive healthcare that never actually covers the ailments they have. All this is to say nothing of the tens of millions of elderly Americans living on social security, perhaps the group most vulnerable to the rising inflation these last two years, even after the 8.7% bump in cost of living adjustment.

These anecdotes are all in the larger data. Wages are rising, but inflation is too. Unemployment is low, but tens of millions of people still couldn't withstand the slightest blip in their day-to-day life. One expensive car part replacement could kill their savings. Rent is rising, and for many, buying a home is out of reach. Credit card debt is at an all-time high, though a moratorium on student debt payments helped a lot of people. There are some unambiguously good things in the anecdotal evidence, too. For blue-collar workers, the sense is there are more jobs than people and lots of need for labor. For white-collar workers, it's the ability to spend more time working remotely or jump to a better-paying job. For student debt holders, more

money is saved up after a couple years without having to make payments. Still, economic sentiment usually trails economic reality by a healthy margin. There was a time when inflation was accelerating and conservatives were trying to make it the story, but nobody seemed to care. Then, suddenly, people really started to care. Now everyone is still stuck on inflation, even as it's receding, but soon, they'll start to notice things are a little better. There's also reason to be skeptical about economic sentiment, as it's almost directly tied to sentiment about politicians. In the New Republic, Timothy Noah pointed to the 2016 election, where one week before the election, only 16% of Republicans thought the economy was improving, while one week after the election and Donald Trump's win, 49% of Republicans suddenly thought

the economy was improving. That was before Trump even got into office. And still, I have no idea what Bidenomics actually is because the White House hasn't really defined it. The media seems to believe it's industrial policy and that very well may be true. But if Bidenomics is what the president wants to use to win an election and win over independent and working class voters, then he will need more than just strong GDP growth and low unemployment. He'll need the data most relevant to the middle and lower income voters to move in the right direction. And then he'll need time for the good news to sink in. All right, that is it for my take, which brings us to your questions answered. This one's from Frank in Bradyville, Tennessee.

Frank said, I saw the story on the largest offshore energy project. What concerns me is that offshore energy projects like windmills seem to have a significant effect on orcas driving them to the beach and die. effect on orcas, driving them to the beach and die. This is similar to land energy projects, which get federal exemptions for killing eagles, other migratory birds, and land animals. If green energy is to replace fossil fuel generated energy, and we need much more space to do that, I have estimates of 10 times more area to 25% of our land mass, shouldn't there be more caution and study before going forward with such large projects? So Frank, these are all great questions, so I'm going to try and tackle them one by one because you make a few points here. First, I don't think anyone would soberly suggest we transition 100% of our energy to wind and give 25% of our land over to wind turbines, but

it's still worthwhile to be cautious when adopting new technology. If wind energy is killing lots of whales and birds, then we should definitely think twice before expanding it. But is it? There are offshore wind farms all over the world, but the only place near them where I'm seeing news about elevated whale deaths is in the New Jersey and New York City area, where one is being developed. At this site, there has been a recent spike in whales, humpback, mink, and right whales

specifically, not orcas, washing ashore that has correlated with offshore development, but it hasn't been proven that wind turbines are causing the deaths. And what's more than just being unable to say that they are, there's good reason to believe that they're not. Autopsies of the whales are showing evidence that whales died from blunt force trauma, like with a ship, and entanglement, like with fishing nets. The argument that these deaths were caused more by an increase in shipping traffic and a northern expansion of the whales' habitable zone is more convincing, at least to me. The story has been framed around the wind farms in outlets like the New York Post, but while the Post clearly biases in favor of blaming the wind farms, it also still cites the same evidence and presents the same counter-argument you can find elsewhere. As for land energy projects having exemptions for killing migratory birds, that was actually a temporary rule and one

that is kind of misleading. In 1918, Congress codified a law called the Migratory Bird Treaty Act from a treaty the United States signed with Canada to protect migratory birds from being killed without a license. This made energy and utility companies liable for unintentional bird deaths caused by power plants, drainage fields, runoff, and power lines. It's true that Obama granted exemptions to win power from this regulation in 2013, which caused a lot of derision from the right. When Trump amended the law in 2017 to only apply to deaths that weren't incidental, the left and conservationists were uniformly opposed. When Biden entered office, though, he continued Trump's policy to little fanfare,

but ultimately reaffirmed the MBTA in full in September of 2021, also to little fanfare. So if you're keeping score there, yes, wind power was exempted from the MBTA. Then essentially all industry was exempted. Now, no industry is. But honestly, that's all besides the point. Because wind turbines killed an estimated million birds a year, that should be what we focus on. That number might sound intolerable, but it also needs a bit of context. Communication towers kill 6.5 million birds per year. Power lines kill 25 million. Windows kill 1 billion. Cats kill between 1.3 and 4 billion. There are also caveats, as the existing rules are voluntarily in force and the

species affected by wind turbines are different. But if you find yourself arguing against oil fields or wind turbines on behalf of the safety of birds, and you're not spending a thousand times that energy fighting cats and windows, then your energy might be a little misplaced. All right, that is it for your questions answered, which brings us to our under the radar section. Illinois Governor J.B. Pritzker signed a new law that will allow non-citizen immigrants to apply to become police officers. The bill stoked outrage from Republicans in Illinois and nationally. Only non-citizens who are allowed to work in the U.S. under federal law or DACA recipients can apply to join the police. The bill's primary sponsor, Democratic Representative Barbara Hernandez, said it was a natural progression from a 2021 federal government

decision to allow some unauthorized immigrants to become health care workers and military members. The Fraternal Order of Police denounced the bill, asking, What message does this legislation send when it allows people who do not have legal status to become enforcers of our laws? Newsweek has the story, and there's a link to it in today's episode description. All right, next up is our numbers section. $986 billion is the amount of money U.S. consumers hold on their credit cards. The percentage increase that is from a year ago is 17%. The average cost of care for one child in America in 2021 is $10,600. The number of American children whose parents lack

secure employment in 2021 is 21 million. The percentage of people who said they were worse off compared to a year ago from a May survey is 35%. The percentage of Americans age 59 and above who have a net worth of $0 or less is 21%. All right, and last but not least, our have a nice day story. There is now a clear path towards ending AIDS, according to a new report by the Joint United Nations Program on HIV AIDS. The report, The Path That Ends AIDS, contains data and case studies which highlight countries and leaders who are already following the path and are achieving extraordinary results. Botswana, Rwanda, the United Republic of Tanzania, and Zimbabwe have already achieved 95-95-95 targets.

That means 95% of the people who are living with HIV knowing their HIV status, 95% of the people who know that they are living with HIV being on life-saving treatment, and 95% of people who are on treatment being virally suppressed. The end of AIDS is an opportunity for a uniquely powerful legacy for today's leaders, said Winnie Benyema, the executive director of UNAIDS. They could be remembered by future generations as those who put a stop to the world's deadliest pandemic. They could save millions of lives and protect the health of everyone. UN News has the story, and there's a link to it in today's episode description.

All right, everybody, that is it for today's podcast. In case you have somehow missed it, this is an extraordinarily special week. On Thursday, August 3rd, this Thursday, in just a few days, we're having our first ever live Tango event here in Philadelphia, Pennsylvania. There is a link to get tickets in our episode description. It's the first seated event ever being held at Brooklyn Bowl, Philadelphia. We've got over 100 tickets sold. It's going to be a packed room. It's going to be awesome. Please, please, please come. There's just a few tickets left and we would love to see you there.

We'll be having a great time debating the Supreme Court with some really interesting voices who've shown up in the Tankle newsletter and podcast. Come out, get a ticket, come say hi. Hope to see you there. We'll be right back here same time tomorrow. Have a good one. Peace. is written by me, Isaac Saul, and edited by Zosia Warpea. Our script is edited by Sean Brady, Ari Weitzman, and Bailey Saul. Shout out to our interns, Audrey Moorhead and Watkins Kelly, and our social media manager, Magdalena Vakova, who created our podcast logo. Music for the podcast was produced by Diet75. For more from Tangle, check out our website at www.taco.com. Thanks for watching!