These Are The Facts, And They Are Undisputed

The title of this post is taken from a line uttered by Kevin Bacon in the excellent film, "A Few Good Men." That film gave us many great lines, and this is just one of them.

The Curmudgeon is back, after a long hiatus. So biased is the national news these days that I can barely stomach watching it. I mostly watch YouTube travel videos and the NFL Network, though the latter is also biased; as a Chiefs fan, I can only say that we got our vindication this season. As safety Justin Reid said, we keep the receipts.

But I wanted to set the record straight with regard to some of the reporting that I have been hearing lately on the rare occasions that I do catch a snippet here and there of the blatant yellow journalism that has supplanted true reporting of the national news. As such, I consider this post more of an economic treatise than a political one, but interpret it as you will.

Recently, the White House and its propaganda arm, the mainstream media, have been touting President Biden's economic record. After all, they can't say much about his record on border security, crime, foreign policy, or pretty much any other policy matter. And, of course, they have to deflect the consistent reporting of the President's glaringly apparent cognitive decline. So they point to some economic success that, quite frankly, leaves me scratching my head. It calls to mind the fable of the Emperor's New Clothes.

Specifically, I've been hearing that President Biden "inherited a pandemic, and has engineered an economic recovery" therefrom.

Well, let me set the record straight; as as is my custom, I'll do it with data.

Let's start with the undisputable fact that the covid pandemic hit the United States, and the rest of the world, in March of 2020. At that time, Donald Trump was President of the United States, not Joe Biden. Thus President Trump, not President Biden, "inherited" the covid pandemic. (I won't editorialize on that pandemic's origins, or how it coincided with President Trump's re-election bid in 2020. Read between the lines as you will.)

To begin with, let's look at job growth. President Trump took office in January 2017. Nonfarm payrolls grew by an average of 180k from February 2017 to February 2020, the month before covid hit. That's a pretty healthy rate of growth.

Now, I'll concede that Trump stood by and let Fauci, Birx, et al convince most of the U.S. governors to shut down the nation's economy in response to the pandemic, which I maintain will eventually be viewed as the single worst decision ever made by policymakers in global history. That was the single worst policy decision of Trump's presidency. As a result, in just six weeks, more than 22 million jobs were eliminated in the U.S. alone, a staggering number that was unprecedented in economic history. 

President Trump was widely ridiculed for predicting that, in the aftermath of the shutdown, the U.S. economy would experience a "super-V-shaped recovery." Yet that's exactly what happened. As I've written before, the recession caused by the shutdown was unprecedented in that it was bottom-up, vs. the top-down recessions that have been typical throughout history. As such, demand remained extant.

The vast majority of Americans did not lose their jobs, and those that did not represented the highest earning levels of the economic spectrum. They still had demand for travel, dining out, shopping, and all the things they normally did when the economy was open and functioning. So when it re-opened in May of 2020 (in most states), they resumed consumption - with a vengeance, because they'd saved their largely intact incomes for two months of interrupted consumption; indeed, bolstered by government stimulus they didn't really need.

As a result, those jobs that were eliminated in the bottom echelons of the economy came roaring back. Nonfarm payroll growth from May 2020 through January 2021, when President Trump left office, totaled 12.5 million jobs, an average of 1.4 million jobs per month, which was also unprecedented in U.S. history. In other words, more than half the jobs eliminated were recovered in the nine remaining months of President Trump's tenure. It took another 17 months under President Biden to recover the remaining jobs eliminated by the shutdown. Thus President Trump did the yeoman's work of the job recovery.

Now, payroll growth under Trump following the shutdown wasn't job creation, it was job recovery - just as the job "creation" under the Biden administration has been job recovery, and we have yet to reach equilibrium in terms of recovering all the jobs that were destroyed in the shutdown plus the jobs that would have been created through normal growth had the economy never been shut down to begin with. In fact, we remain about 4 million jobs short of that equilibrium point. Such are the long-term implications of that disastrous decision to shut down the economy. Still, the point remains: job recovery in the months under Trump eclipsed those under Biden on a per-month basis.

Now, let's look at the unemployment rate. When President Trump took office in January 2017, it was 4.7%. In February 2020, before covid hit, it was down to 3.5%, about where it is now. Unemployment among nearly all minority categories was at record lows, below today's levels. In April 2020, after two months of shutting down the economy, unemployment had risen to a record 14.8%. But by January 2021, when President Trump left office, the unemployment rate was back down to 6.4%.

Are you beginning to see the picture? President Trump inherited a pandemic. Then he engineered a recovery, which his successor inherited.

Let's turn our attention to inflation, using the broad Consumer Price Index (CPI) as our measure. In January 2017, when President Trump took office, CPI year-over-year was 2.5%. By September 2019, it was down to 1.7%. When President Trump left office in January 2021, it was just 1.4%, but that was aided by the pandemic, which suppressed consumption and disrupted the supply chain.

Since that time, inflation has averaged about 6%. It's currently just over 3%, but it peaked at more than 9% under President Biden. And we have to consider the cumulative effect of today's 3% inflation rate on top of last year's 9% inflation rate. That means prices on many items are up by double digits vs. two years ago. I won't even compare what a loaf of bread, a gallon of milk, a dozen eggs, or a restaurant meal cost today to what they cost in January 2017. But I will note that a gallon of gas cost $2.30 in January 2017; $2.10 in November 2020; and is currently about $3.30.

Now, let's talk about GDP growth, the overall measure of economic output. Under President Obama, it averaged 2.2%, which is pretty anemic. Under President Trump pre-covid, it averaged 2.8%, which is quite a bit healthier. During the first two quarters of 2020 - the pandemic quarters - it averaged -18.5%, which was a record low. In fact, in the second quarter of 2020, it was an overwhelming record of -31.6%, again the result of the disastrous decision to shut down the economy.

However, in the third quarter of 2020, it was another record: +31%, nearly recovering the entire lost output of the prior quarter. The average growth rate from 2020 Q3 to 2021 Q1, when President Trump left office, was also a record, 13.4%. There's that "super-V-shaped recovery" we were promised. The average under President Biden has been about 2.8% - a healthy number, but still aided by the recovery from the pandemic (and also aided by things like people spending money on travel and consumption instead of repaying their student loan obligations, as loan delinquencies have risen precipitously). And still just back to where President Trump had gotten economic growth, so hardly a "recovery."

Next, let's examine the stock market, something the Biden administration has really been touting, because stocks have been trading at record levels. (When Trump was President, we were told by the media that stock market performance wasn't an indicator of economic health; now, it apparently is.)

Remember the dire warnings of what would happen to stocks if Trump was elected in 2016? We were told that the market would tank.

Indeed, after the election results came in late in the evening on Election Day in November 2016, stock futures sold off dramatically. Then, they began to rally. And when the market opened the next day, stocks rallied even more. As I recall, the total swing in the market from the low in stock futures overnight to the close on the day after Election Day was something like 1,300 points on the Dow, which was unprecedented.

On November 4, 2016, the S&P 500 closed at 2085. By November 9, just after the election, the index was up to 2163, a gain of nearly 4% in just five days. By February 20, 2020, just before the pandemic hit, the S&P was up to 3373, a gain of nearly 62% over when President Trump took office.

Then, after the covid shutdown, the index plunged by more than 33% to 2237 by March 23, 2020. However, by Election Day, 2020, it was 3369, up more than 50% from the pandemic low, and nearly back to the pre-pandemic high, in just eight months. Overall, it was still up about 62% from when President Trump was elected, in spite of the pandemic.

Today, it's about 5089, up about 51% from the Election Day 2020 level. Some of that is due to the continued recovery from the pandemic, a recovery that President Biden inherited. Many market observers also attribute the stock market's performance to speculation regarding the 2024 election. President Biden's poll numbers are at record lows, and President Trump is the presumptive nominee for the GOP. Given his track record during his term, the market is optimistic over the prospect of a second term. Of course, some of it is attributable to fundamentals that have nothing to do with who's in the White House: corporate earnings, interest rates possibly declining, the performance of tech stocks given the euphoria over AI, etc.

Finally, let's consider one more thing, and this one may be controversial among some of my readers: the covid vaccine. I decided some time ago not to weigh in on the various theories surrounding the vaccines. I'm not an expert in such matters (and, if you're reading this, neither are you). I only know that numbers don't lie. And I know that the economy would never have fully re-opened without the vaccines being rolled out. Beyond that, people are going to believe what they're pre-disposed to believe, and no amount of data will dissuade them. If you want to believe the world is flat, or that the lunar landing was a hoax, that's your prerogative. Suffice it to say that I've received the original vaccine and two boosters, and my heart is as healthy as it's ever been, and I have yet to develop a craving for bananas.

The CDC and the FDA are two of the most bloated and lethargic government agencies in the U.S., and that's saying something, given the slow-moving bureaucracy that is entrenched in our nation's capital. But under President Trump, those agencies fast-tracked the vaccine rollout in a way that has never been witnessed. Between April 2020 and January 2021, the vaccines were developed and made ready to distribute not just nationally, but globally, and a plan was in place to deploy them.

President Biden inherited that plan, and all he had to do was implement it. In fact, he inherited not a pandemic, as his administration claims, but a robust recovery, as the numbers above prove. He has ridden the wave of that recovery, in some instances letting it ride to new highs, as with the stock market, or nonfarm payrolls. In other instances, such as energy or overall price levels, he has placed roadblocks that have impeded progress, and even reversed the recovery that was in place prior to his presidency.

One thing is clear, however: President Biden did not inherit a pandemic. President Trump did. And President Biden has not engineered a recovery. The recovery was well underway before he took office, and he inherited that recovery.

These are the facts, and they are undisputed.