The American Economy: A Global Benchmark in Resilience
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The United States has emerged as a dominant force in the global economy, particularly during Joe Biden's presidency. A recent article in the Wall Street Journal highlighted this achievement with the headline, “The American Economy is the Envy of the World.” Despite rising costs for consumers in areas like groceries and gas, it remains clear that the U.S. economy is thriving on a world stage.
> “The U.S. economy has far outperformed expectations over the past year and a half. Instead of stumbling under the weight of the Federal Reserve’s most aggressive interest-rate-raising campaign in four decades, it has continued expanding at a robust clip.” – Wall Street Journal, April 2024
One of Biden’s most notable economic successes is the avoidance of a recession during his time in office. In the wake of the pandemic, many economists predicted a significant downturn. However, by the time Biden had been in office for three months, the likelihood of a recession had dropped dramatically.
The Recession That Wasn't
Back in April 2020, many experts forecasted a 90 percent chance of recession due to the widespread disruptions caused by COVID-19. Yet, under Biden's stewardship, the economy's trajectory changed, showing considerable growth in the GDP and remarkable stock market gains.
While inflation has affected prices, wages have finally begun to outpace inflation after years of stagnation. Since Biden took office, nearly 14 million jobs have been created, with wage increases benefiting middle- and low-income families, thereby reducing income inequality for the first time in decades.
Food Prices as a Political Concern
Despite improvements in the job market, consumers are still grappling with inflation, especially in food prices. The Biden administration is working on various fronts to alleviate these pressures, including addressing prescription drug costs and improving supply chains. However, many families still report feeling the financial strain, attributing it to the current administration.
One significant factor driving food prices is the concept of “greedflation.” Large corporations, increasingly merging into conglomerates, are reaping larger profits at the expense of consumers. A report from Food and Power revealed that food retailers' profit margins have risen significantly since 2020, raising questions about the justification for price increases.
Kroger/Albertsons Merger: A Cause for Concern
Last October, Kroger and Albertsons announced a $24.6 billion merger that would create a company controlling 22 percent of the U.S. grocery market. This merger has raised red flags among regulators and consumer advocates, who argue it would stifle competition and drive prices higher for consumers.
> “The FTC charges that the proposed deal will eliminate fierce competition between Kroger and Albertsons, leading to higher prices for groceries and other essential household items for millions of Americans,” stated the FTC.
State attorneys general from multiple states are joining in efforts to block the merger, citing potential negative impacts on prices and consumer choice.
Corporate profits have come under scrutiny as inflation continues to be a pressing issue. Some reports suggest that corporate profits have significantly contributed to recent inflation trends.
> “A recent report from Groundwork Collaborative argues that corporate profits drove 53% of inflation during the second and third quarters of 2023 and 34% since the start of the pandemic.”
The Impact of Tax Cuts
The tax cuts enacted during the Trump administration are set to expire in 2025. This presents an opportunity for the Biden administration to address tax equity for working-class families. However, large corporations are heavily investing in political campaigns to maintain these cuts.
The disparities in corporate compensation have also become apparent, with executives receiving millions while many workers struggle to make ends meet.
The SNAP Debate
As Congress prepares to negotiate the next food and farm bill, discussions around SNAP benefits are intensifying. Republicans are pushing to limit these benefits, which assist millions of Americans, including many working families.
The conversation about food inflation is also shaped by consumer expectations. Many Americans nostalgically recall lower prices from previous decades, making it difficult to accept current prices as the norm.
In conclusion, while challenges persist, Joe Biden’s leadership has navigated the U.S. economy through unprecedented times, maintaining its status as a global leader.