When Politicians Tell Voters They’re Dining on Fine Fare But Voters are Eating Hot Dogs: How Bidenomics Exacerbates the President’s Political Problem

  • Bidenomics is based on assertions that the economy is doing well thanks to the President, but most Americans believe it isn’t because the economy according to Biden is not the economy most Americans experience every day.
  • The aggregate unemployment level in which the President takes such pride doesn’t reflect real unemployment or – far more important – real wages.  The bottom 50% of U.S. households would have to earn $5,000 more today just to buy what they bought at the end of 2019 despite the wage gains in which the President and Fed take such pride.
  • Progress curbing inflation isn’t as the President portrays it because almost two-thirds of Americans are living paycheck to paycheck and skimping on or even skipping goods and services.  Only a quarter of middle-class households can now afford a home, down from fifty percent in 2019.
  • Effective political rhetoric recognizes reality.  The President must thus speak to policy changes, not past accomplishments, and make it clear he understands how hard most households have it.

For Mr. Biden to gain voter traction on economic policy, he’ll need to persuade the two out of three voters who disapprove of his economic record despite proclamations of progress each time job numbers go up and inflation seems to go down a bit.[1]  Bouncing GDP numbers haven’t and won’t suffice because GDP is a poor measure of prosperity across the distributional income and wealth curves.  Low unemployment numbers also aren’t persuasive because they come in part from the large number of people no longer in the market because wages are still so low.  Employment numbers are also buttressed by the millions of Americans holding down multiple jobs to make ends sort-of meet. 

President Biden on June 28 stood in front of Bidenomics banners to tout all he has done for American prosperity.  The problem?  It’s not shared prosperity and those left out aren’t likely to be assuaged just by promises.  They need economic performance or, failing that, at the least rhetoric that persuades skeptical voters that those responsible for their economic malaise are nowhere near the Oval Office. 

As American history as recently as 2016 proved,[2] prosperity without equality is a political problem of the first order. As of the most recent, somewhat better aggregate data, Mr. Biden’s favorability rating is near his all-time low, now standing at 42.3 percent[3] as he is running neck-and-neck with Donald Trump.[4]  Happy times may be here again, but the electorate is sullen at best.


American wealth inequality is at one of its highest levels since the Fed began calculating it in 1989.[5]  Income inequality has improved a bit[6] in recent years due to nominal increases in labor income,[7] but overall income disparities remain pronounced.  The top one percent takes home $2.0 million in average post-tax income[8] versus the bottom fifty percent’s average of $39,274.[9]  Even before inflation really took off, a survey in January of 2022 found that Americans thought they needed $128,000 in income to feel financially secure.[10]   Now, 58 percent of Americans live paycheck-to-paycheck.[11]

The State of the Political Economy

Even a quick comparison of what the White House and Federal Reserve say about the U.S. economy with how most Americans experience it shows the enormous credibility gap Mr. Biden has yet to traverse:

  • The Fed most recently said that “jobs gains have been robust in recent months, and the unemployment rate has remained low.”[12]  However, 37.4 percent of the work force is not looking for work all too often because work for which they are qualified is hard to find, child-care costs have become so prohibitive that available wage options don’t further family prosperity, or there are other reasons applicable in the post-pandemic economy.  
  • More to the point when judging employment is knowing what workers glean from it.  Low-wage workers have indeed seen some benefits,[13]  but real median wages are well below inflation[14] and those for the middle class have been stagnant at best in real terms since 2000.[15]
  • “Inflation remains elevated.”[16] True for sure, but is it just “elevated” or extremely problematic for all but the wealthiest households where salary and capital income offset price hikes for their limited consumption?  Americans now have to pay $118.18 for what cost $100 at the end of 2019.  The bottom fifty percent – who earned $37,313 of post-tax income at the end of 2019 – would now have to earn $44,096 just to keep pace with the cost of living.  Their current income is about five thousand dollars short.


  • The Fed’s most recent survey of American well-being found that overall financial welfare “declined markedly” from 2021, with 73 percent of adults doing “at least okay” – down five full percentage points from the year before.  
  • Another five-percentage point drop was evident in the percentage of Americans who can handle a $400 unexpected expense with cash or an equivalent, with 37 percent of Americans now unable to do so.[17]
  • Two-thirds of Americans stopped using a product or used less due to inflation[18] and the percentage of Americans saying that they were doing worse than the year before rose to the highest level since the Fed’s survey began in 2014.[19]
  • Middle-class Americans can now afford only 23 percent of houses listed for sale, down from about half just five years ago.[20]

What to Do?

Earlier this year, National Security Council Director Jake Sullivan gave a prescient speech[21] laying out how events since the late 1990s upset conventional wisdom that a globalized economy ensured lasting peace founded on efficient markets delivering the best goods at the best price to the happiest consumers.  We know now that there’s no such thing as a free flow of goods or capital across borders in which wildly different political, military, environmental, economic rights and social norms apply.  Knowing this, the White House has changed course, adopting industrial policy and other new tactics that may well finally boost America’s long-dormant manufacturing capability.   

There’s no such recognition that the economic theories on which Fed policy is premised and for which the White House mounts so stout a defense are even close to workable in an unequal economy. Effective monetary-policy transmission, sound fiscal policy, and a successful economy are impossible without a majority of consumers able to absorb stress and promote growth without unsustainable debt or, even worse, going without essential goods and services.

Mr. Biden must break with past financial policy just as effectively as he has done with the once-cherished globalization construct.  To hope for the two-out-three favorable economy rating essential for re-election, he must convince skeptical voters that he hears and feels their pain.  Telling voters how good they have it when most of them don’t is a recipe for failure. 


[1] Alex Gangitano, “Roughly 1 in 3 approve of Biden’s handling of economy amid ‘Bidenomics’ push: poll,” The Hill, (June 28, 2023),https://thehill.com/homenews/administration/4071529-roughly-1-in-3-approve-of-bidens-handling-of-economy-amid-bidenomics-push-poll/#:~:text=Biden%20is%20heading%20to%20Chicago,on%20the%20term%20%E2%80%9CBidenomics.%E2%80%9D.

[2] Karen Petrou, Engine of Inequality: The Fed and the Future of Wealth in America, (New Jersey: John Wiley & Sons, Inc, 2020). https://fedfin.com/engine-of-inequality/.

[3] FiveThirtyEight, “How unpopular is Joe Biden?” (June 28, 2023), https://projects.fivethirtyeight.com/biden-approval-rating/.

[4] FiveThirtyEight, “President: general election, 2024,” (June 28, 2023), https://projects.fivethirtyeight.com/polls/president-general/.

[5]  Board of Governors of the Federal Reserve System (FRB), “Distribution of Household Wealth in the U.S. since 1989: Wealth by Wealth Percentile Group,” Distributional Financial Accounts, (2022: Q4), updated June 16, 2023, https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#quarter:134;series:Net%20worth;demographic:networth;population:1,3,5,7,9;units:shares;range:1989.3,2023.1

[6] World Inequality Database (WID), “Top10/Bottom50 ratio of national income, USA, 1913-2021,” (accessed June 28, 2023), https://wid.world/country/usa/.

[7] U.S. Bureau of Labor Statistics (BLS), “Employed full time: Median usual weekly nominal earnings (second quartile): Wage and salary workers: 16 years and over,” retrieved from FRED, Federal Reserve Bank of St. Louis (FRB-St.L), accessed June 28, 2023, https://fred.stlouisfed.org/series/LES1252881600Q.

[8] Thomas Blanchet, Emmanuel Saez, and Gabriel Zucman, “Income Inequality,” Realtime Inequality, (Accessed June 29, 2023), https://realtimeinequality.org/?id=income&incomeend=03012023&incomefreq=quarterly&incomegroups=Bottom%2050%25&incomegroups=Top%201%25&incomestart=11012019&incometype=posttax_income&incomeunit=Households&incomey=perAvg.

[9] Ibid.

[10] Suzanne Woolley, “Americans Say They Need to Earn $128,000 to Feel Financially OK,” Bloomberg, (January 13, 2022), https://www.bloomberg.com/news/articles/2022-01-13/how-much-do-you-need-to-earn-to-feel-financially-secure-americans-want-128k?sref=BSO3yKhf.

[11] Jessica Dickler, “With inflation stubbornly high, 58% of Americans are living paycheck to paycheck: CNBC survey,” CNBC Your Money, April 11, 2023, https://www.cnbc.com/2023/04/11/58percent-of-americans-are-living-paycheck-to-paycheck-cnbc-survey-reveals.html.

[12] FRB, “Federal Reserve issues FOMC statement,” (June 14, 2023), https://www.federalreserve.gov/newsevents/pressreleases/monetary20230614a.htm.

[13] FRB Gov. Philip Jefferson, “Financial Stability and the U.S. Economy,” (speech, Washington, D.C., May 31, 2023), https://www.federalreserve.gov/newsevents/speech/jefferson20230531a.htm.

[14] BLS, “Employed full time,” op. cit.

[15] WID, “P35p65 average national income, USA, 2000-2021,” (accessed June 28, 2023), https://wid.world/share/#0/countrytimeseries/aptinc_p35p65_z/US/2015/cc/c/x/yearly/a/false/0/50000/angle/false/1999/2020.

[16] FRB, “Federal Reserve issues FOMC statement,” op. cit. https://www.federalreserve.gov/newsevents/pressreleases/monetary20230614a.htm.

[17] FRB, Report on the Economic Well-Being of U.S. Households in 2022, (May 2023), available at https://www.federalreserve.gov/publications/files/2022-report-economic-well-being-us-households-202305.pdf.

[18] Ibid.

[19] Ibid.

[20] Paulina Cachero, “US Housing Market Is Missing 320,000 Affordable Homes,” Bloomberg, (June 29, 2023), https://www.bloomberg.com/news/articles/2023-06-09/can-i-afford-a-house-us-market-is-missing-320-000-middle-income-homes?sref=BSO3yKhf.

[21] National Security Advisor Jake Sullivan, “Remarks by National Security Advisor Jake Sullivan on Renewing American Economic Leadership at the Brookings Institution,” The White House, (April 27, 2023), https://www.whitehouse.gov/briefing-room/speeches-remarks/2023/04/27/remarks-by-national-security-advisor-jake-sullivan-on-renewing-american-economic-leadership-at-the-brookings-institution/.

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