Galb ai h, James K.
A icle
Le e om Ame ica: The US Economy and he Elec ion
In e economics
Sugges ed Ci a ion: Galb ai h, James K. (2024) : Le e om Ame ica: The US Economy and he
Elec ion, In e economics, ISSN 1613-964X, Sciendo, Wa saw, Vol. 59, Iss. 2, pp. 119-120,
h ps://doi.o g/10.2478/ie-2024-0024
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ZBW – Leibniz In o ma ion Cen e o Economics 119
Le e om Ame ica
DOI: 10.2478/ie-2024-0024
In e economics, 2024, 59(2), 119-120
JEL: E61; E64; E65
The US Economy and he Elec ion
John Mayna d Keynes w o e:1
The classical economis s a e like Euclidean geome e s in a non-Euclidean wo ld who, dis-
co e ing ha in expe ience s aigh lines appa en ly pa allel o en mee , ebuke he lines o
no keeping s aigh , as he only emedy o he un o una e collisions which a e occu ing.
So i is be ween mains eam economis s and Ame ican o e s. Unemploymen is low. In-
la ion has come down. Real ea nings a e ising. GDP g ow h has held up. Bu o some
eason he o e s a e no happy! I mus be hei own igno ance and ob useness (so says
Paul K ugman).2 Pe haps a college deg ee – wi h a leas a mino in neoclassical econom-
ics – should be a equi emen o o ing.
The o he possibili y, hough ho ible o con empla e, is ha pe haps he o e s a e sensi-
ble and he economis s a e ob use. In ha case, pe haps he indica o s on which econo-
mis s ely no longe mean – i hey e e did – wha economis s suppose hem o mean, a
leas in hei ela ion o human wel a e and economic well-being.
Take he unemploymen a e. I is a a io o hose seeking wo k o he whole ac i e labo o ce. In
pas imes, mos households depended on a single ea ne , o whom holding a job was a make-
o -b eak p oposi ion. I unemploymen was high – say 7% o 8%, ypical in ecessions – hen
e en hough 93% o 92% o he labo o ce was s ill wo king, ea o unemploymen sp ead he
woes o hose ac ually ou o wo k. Bu i unemploymen was low, mos wo ke s el easonably
secu e. The unemploymen a e, back hen, was a easonable indica o o dis ess o well-being.
Those days a e long gone. Today’s ypical Ame ican wo king household has se e al ea n-
e s, some imes in mul iple jobs; i elies on se e al income s eams o make ends mee . Bu
i one ea ne loses a job, while he o he s keep hei s, she may no e u n u gen ly o he
wo k o ce; he e is he op ion o making do wi h less, and o some he e is ea ly e i emen .
She will no , in ha case, coun as unemployed. A low jobless a e can mask a g ea deal o
s ess in such households. The employmen - o-popula ion a io is s ill a bi below whe e i
was in 2020, and a below whe e i was in 2000.
Nex , conside in la ion. In la ion is he a e o p ice change measu ed mon h- o-mon h o yea - o-
yea . Bu wha ma e s o consume s is p ices in ela ion o household incomes o e se e al yea s.
In 1980 Ronald Reagan asked, “A e you be e o han you we e ou yea s ago?” Today, he e is
no doub ha millions o Ame ican households – pe haps no mos , bu many – a e wo se o han
hey we e in 2020. Basic li ing cos s, such as gasoline, u ili ies, ood and housing, ha e isen mo e
han incomes ha e. Real median household income peaked in 2019 and ell a leas h ough 2022.
Y
es, bu did eal wages no go up sha ply in 2023? Acco ding o he Biden- iendly Cen e
o Ame ican P og ess, eal wages ( o hose con inuously employed) ha e now eco e ed
oughly o whe e hey would ha e been had no pandemic occu ed.3 Bu he e is a g ea
1
Keynes, J. M. (1936), The Gene al Theo y o Employmen In e es and Money, Ha cou B ace and Company, 1936, 16.
2 K ugman, P. (2024, 22 Feb ua y), Bidenomics Is S ill Wo king Ve y Well, NYTimes, h ps://www.ny imes.
com/2024/02/22/opinion/biden-economy.h ml (21 Ma ch 2024).
3
Duke, B. (2024, 3 Janua y), Wo ke s’ Paychecks A e G owing Mo e Quickly Than P ices, Ame icanP og ess, h ps://
www.ame icanp og ess.o g/a icle/wo ke s-paychecks-a e-g owing-mo e-quickly- han-p ices/ (21 Ma ch 2024).
© The Au ho (s) 2024. Open Access: This a icle is dis ibu ed unde he e ms o he C ea i e Commons A ibu-
ion 4.0 In e na ional License (h ps://c ea i ecommons.o g/licenses/by/4.0/).
Open Access unding p o ided by ZBW – Leibniz In o ma ion Cen e o Economics.
James K. Galb ai h, The
Uni e si y o Texas, Aus in,
USA.
In e economics 2024 | 2
120
Le e om Ame ica
dis inc ion be ween s eady p og ess and a saw oo h down-and-up. The o me b eeds
con idence; he la e does no .
Then he e is he deep ques ion o job secu i y. In he golden yea s du ing which oday’s
olde gene a ion o economis s lea ned hei ex book ools, a wo ke ’s job was o en a
li e ime a ai . Au owo ke s (and hei associa es in ubbe and glass) migh su e pe iodic
layo s, bu hey could expec o be called back; hei skills and expe ience emained use-
ul. Tha was all o e by he 1980s.
Since hen, ac o ies ha e closed and ha e no e u ned, and p ac ically all new jobs ha e
been in ou ine se ices, wi h medioc e wages and high u no e . The pandemic d o e
home he agili y o hese jobs o e e yone, e en hose who had ne e los a job be o e.
In e es a es a e ano he big p oblem. Long ago Joe Biden kicked he can o “ igh ing in-
la ion” o e o he Fede al Rese e. The Fede al Rese e hen did he only hing i knows
how o do: i hiked in e es a es. Mo gage a es we e a ound 3% in 2021; oday hey a e a
leas wice ha . High in e es a es hi young amilies looking o hei i s house, and hey
hi es ablished households, o en olde , looking o sell hei homes. The capi al weal h o
he middle class alls, o he bene i o hose wi h cash o spa e. The second g oup is much
smalle and a iche han he i s .
Fo he poli ically and economically ale , high in e es a es b ing o he anxie ies. Al hough
condi ions may ha e changed, hey a e adi ional ha binge s o inancial c isis and eces-
sion. And in he peculia wo ld o budge p ojec ions, hey blow up o ecas s o u u e ed-
e al budge de ici s and deb , p o oking sca e s o ies and s oking campaigns o cu Social
Secu i y, Medica e and Medicaid – he bulwa ks o middle Ame ican social insu ance.
And wha abou he g ow h o GDP? Tha once- eliable icon o p ospe i y has also los
much o i s meaning. The concen a ion o gains in an economy domina ed by inance and
echnology is one eason. Ano he has o do wi h he na u e o go e nmen -suppo ed in-
es men s in chips, in enewable ene gy and in mili a y ha dwa e, all o which ha e been
con ibu ing o GDP g ow h and o massi e co po a e p o i s. Such in es men s do c ea e
jobs. Bu hey add no hing isible o li ing s anda ds. The poli ics o elec ici y a e asym-
me ic: consume s expec he g id o wo k and hey only eac – nega i ely – when he
powe goes o o he bills go up. E en Biden’s in as uc u e bill was la gely a con en ional
oads p og am, no o iously likely o os e subu ban sp awl and o en ich de elope s, a h-
e han isibly o epai he decaying co e o mos Ame ican ci ies and owns.
Then he e is he simple ending o COVID-19 elie . Pandemic p og ams ga e millions o
Ame icans a inancial cushion o a ime; ea ly on, he paymen s we e o en la ge han
p e ious paychecks and, while hey las ed, po e y and ood insecu i y wen down. Mos
Ame icans we e p uden wi h he suppo , bu hey o en used i , no unwisely, o achie e
a ouch o independence om d ea y jobs. Wi h ha suppo gone, he cushions e ode,
sa ings decline, deb ises – and amilies eel he p essu e o go back o wo k on he e ms
hei employe s o e . They do no like ha e y much.
Finally, wha a e Biden’s p io i ies hese days? They a e o ge money o Uk aine, Is ael and
Taiwan – ha is, o dis an , disag eeable and p ospec i e wa s. Biden’s big domes ic achie e-
men s, which came ea ly on, lie in he dis an pas . Declining p ospec s in Uk aine and he wa in
Gaza only add o he wa -wea iness ha many Ame icans eel, a e 23 yea s o ui less igh ing.
In sho , Biden’s economis s and hei acoly es in he p ess appea locked in o a s a is ical
and cogni i e pa adigm as old as he p esiden himsel . I shows. Di e consequences may
ollow, come No embe .
