Economic output, or gross domestic product, has risen above pre-crisis levels.
Investors also have reason to rejoice: The S&P 500, a broad measure of the stock market, rose 19.3 percent during Mr. Biden’s first year as president. The large losses of the markets over the past week wiped out only a small part of those gains.
The White House is in the position of a physician who has administered a successful course of treatment but has failed to prepare the patient for the side effects or provide the timeline for a full recovery. Much pain was averted, but it’s hard to feel gratitude for things that didn’t happen. The economic outlook is strong, but it’s hard to feel gratitude for things that haven’t happened yet. Right now, the pain of inflation is paramount for most.
No one is surprised when recessions cause unpredictable disruptions. We are now being reminded that recovery is messy too. People are trying to buy more cars than are readily available. Diners are more eager than waiters to return to restaurants. The country’s cargo ports have been overwhelmed by a surge in imports.
However, Mr Biden has contributed to his own political woes. During much of the fall, the president and other government officials seemed to downplay the dangers of inflation. Mr. Biden also continues to present the government’s longer-term economic initiatives, such as antitrust enforcement and childcare subsidies, as measures that would help fight inflation. The effect of such policies would not be felt for some time, and Mr Biden’s insistence on this implausible narrative may contribute to a sense that he is not taking inflation seriously.
In some areas, the government has not taken measures that could help contain inflation or mitigate its effects. Tariffs imposed by Donald Trump on Chinese imports remain in effect. Legal immigration has continued to fall, exacerbating the labor shortage. Extending the child tax credit by one year has reduced the proportion of American children living in poverty to its lowest level since the government began tracking records in the 1960s. But Democrats, unable to agree on the terms of a permanent expansion, have dropped the extended benefits, giving millions of working families the help they need.
Some critics of the president argue that the United States missed an opportunity for Goldilocks to recover, not too cold and not too hot. They argue that a smaller dose of economic aid would have fueled growth without higher inflation. But European countries, which generally delivered relatively smaller amounts of aid, are now experiencing both lower inflation and slower recovery. Critics should also consider the not-so-distant past: in the aftermath of the 2008 crisis, the United States similarly provided an insufficient dose of aid. Inflation remained calm, but that was little comfort to the millions who waited years to find work.
The challenge now is to bring inflation back under control without undermining the economic recovery. Much of the work will be done by the Federal Reserve, not Mr Biden or his administration. The role of presidents in shaping the country’s economic fortune is generally exaggerated. But if the government can complete the work it has begun, perhaps this government deserves the victory laps it takes for successful stewardship of the country’s economy.
