"Bidenomics" and the state of the economy.

Plus, a question about windmills and birds.

I’m Isaac Saul, and this is Tangle: an independent, nonpartisan, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum on the news of the day — then “my take.”

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Today's read: 13 minutes.

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President Biden is trying to hail his economic agenda. Does he have the goods? Plus, a reader question about wind turbines and environmentalism.

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Correction.

In our international news edition, we stated that New Zealand had pulled off an incredible 1-0 upset of Sweden in round one. In fact, New Zealand beat Norway in the first round, not Sweden. And I’m not sure if this quite rises to the level of a correction, but we also referred to the “left-wing party Sumar” in Spain, though a few readers pointed out that Sumar is more a coalition of parties than a singular party itself — something unfamiliar in U.S. politics.

This is our 88th correction in Tangle's 209-week history and our first since July 20. We track corrections and place them at the top of the newsletter in an effort to maximize transparency with readers.

Quick hits.

Congress is now on recess until early September, while President Biden and his family are vacationing in Rehoboth Beach, Delaware. (The recess)
Former President Trump was charged with a new count of retaining classified material. He also faces additional charges of attempting to delete security footage to prevent it from being reviewed by investigators. Meanwhile, a federal judge in Florida dismissed his defamation lawsuit against CNN. (The charges)
Senate Minority Leader Mitch McConnell (R-KY) vowed to serve out his full term after an apparent health episode during a news conference last week. (The vow)
The United States military is hunting for malicious computer code it believes China has hidden deep inside networks controlling power grids, communication systems, and water supplies that feed military bases in the U.S. and abroad. (The hunt)
A U.S. aid worker and her child were kidnapped in Haiti while on ministry duty. The State Department is urging nonemergency personnel to leave the country. (The kidnapping)

Today's topic.

"Bidenomics" and the economy. On Thursday, the Commerce Department reported that the U.S. economy grew by a 2.4% annualized rate in the second quarter, beating the 2% estimate by economists and showing the latest sign that a U.S. recession is unlikely. At the same time, the personal consumption expenditures price index increased just 2.6%, a sign that inflation is continuing to cool.

Consumer spending, inventory growth, increases in nonresidential fixed investment, and government spending were behind the rise in growth, CNBC reported. Meanwhile, the unemployment rate remained at 3.6% for June, the same as it was a year ago, and nonfarm payrolls have grown by 1.7 million in 2023 so far. Wages are also continuing to rise, and are finally outpacing inflation after two years of falling behind.

With traditional measures for the economy showing strong results and inflation cooling, President Biden is pitching a new term to voters: Bidenomics, his rejoinder to Reaganomics. The backbone of Bidenomics is industrial policy, or government spending on heavy industry such as clean energy and semiconductor production. Biden is framing the latest bout of positive economic signals as proof his agenda is working.

Specifically, his administration is touting $210 billion of chipmaker investments in U.S. factories and the expansion of clean energy projects across the country, many of which were sparked by government subsidies.

However, while Biden is trying to sell his economic agenda to Americans, he's running headfirst into widespread pessimism. Earlier this month, CNBC released its All-America Economic Survey, which found just 37% of respondents approve of Biden's handling of the economy while 58% disapprove. 79% of Americans said the economy was just fair or poor, while only 20% said it was excellent or good. Similar results have been seen in polling from outfits like Monmouth. In other places, consumer sentiment has jumped — but only in recent weeks.

Today, we're going to explore some arguments about Bidenomics and the current state of the economy from the left and right, then my take.

What the left is saying.

The left is celebrating the economy, and pointing to the variety of data suggesting the economy is healthy.
Many praise President Biden's strategy and the correlating growth, low unemployment, and rising wages.
Others suggest people feel negative because there is a lot to feel negative about, especially for those most in need.

The Washington Post editorial board said it's time to celebrate — and aim higher.

"For the first time in a while, the nation — and its policymakers — can step out of crisis mode," the board wrote. The surprises keep coming: "Growth was better than expected this spring. Inflation is cooling off faster than anticipated. Unemployment remains near half-century lows. Optimism is picking up. Consumer spending remains solid. Wages are now rising faster than inflation. UPS workers are not going to strike after the company gave them a large raise. The stock market is near all-time highs. Wall Street banks no longer predict an imminent recession. Business investment is picking up. Even housing appears to be turning around."

"Mr. Biden is eager to take credit for this Goldilocks economy. The latest data show government investments in infrastructure and manufacturing are helping, but they are modest so far in a $25 trillion economy. The Federal Reserve’s aggressive battle against inflation has played a bigger role. But the largest factor of all appears to be an economy returning to normal after three years of turmoil," the board said. The country's good fortune offers a chance to address long-term problems, and "at the top of the list are the $32 trillion national debt and immigration."

In Fortune, Jeffrey Sonnenfeld and Steven Tian said "Bidenomics critics are being proven wrong" and happy days are here again.

"Remember how, just months ago, leading economic voices were predicting a catastrophic 'Category 5 economic hurricane' this year? The astounding 2.4% GDP growth revealed this week with plunging inflation, historically low unemployment, and corporate profit reports soaring past expectations have knocked the wind out of the fact-free cynics," they wrote. "It’s been said that cynics sound smarter than optimists because of the facts they cite but, in this case, they have no facts." Some economic experts insisted high unemployment for five years was needed "as a cure for inflation... Now, reality has taken these obsolete economic voices back to school."

The economy is "pulling off what all these experts said was impossible: strong growth and record employment amidst plummeting inflation." Inflation is now at "its lowest since the pandemic," while commodity prices "have plummeted by at least 50% across the board, ranging from energy, food, agriculture, and metals." Even gas prices, which have "ticked up slightly in the last few weeks, are now lower than pre-Ukraine conflict levels." And "in almost every major sector, real wages are now growing faster than pre-pandemic with record workforce participation, amidst millions of new and returning workers–partially thanks to the workforce training, education, and childcare policies that are core pillars of Bidenomics."

In Jacobin, Branko Marcetic said Americans feel negative about the economy because there is a lot to feel negative about.

"It’s true that there are many bright spots in this economy," Marcetic said. But "fixating on these metrics masks how badly" the economy is treating many people. "More than two million people have lost their Medicaid coverage as of mid-July since President Joe Biden unwound the pandemic emergency declaration, many of them simply thanks to administrative errors, with millions more tipped to lose the affordable, publicly provided health insurance coverage in a country where not having it can mean bankruptcy or death. The end of the declaration also triggered food stamp cuts that deprived forty-two million Americans of an average $90 a month, even as high as $250 a month.

"Evictions are soaring around the country... homelessness has shot up nearly 40 percent from last year in major cities like New York and Chicago," he said. Childcare, which has "gone up 220 percent in cost over the past thirty-three years and is leading women to drop out of the workforce to save money — is set to get even more expensive this September when federal funding for providers is due to run out." Prescription drugs are so expensive "that nine million people have failed to properly take their medication as a way to trim costs. The highest share of adults (28 percent) since 2014 skipped medical treatment due to cost last year." Meanwhile, a March poll found 58 percent of Americans are "living paycheck to paycheck."

What the right is saying.

Many on the right criticize Bidenomics, saying the administration and media are cherry picking data and ignoring reality.
Some call out the cost of living now compared to before Biden became president.
Others say there are still a ton of negative signals for working class Americans.

In Townhall, Ted Harvey said the media is cherry picking data while ignoring the failures.

“Was Bidenomics also responsible for the four-decade inflation high of 9.1 percent last June? Or the 16.6 percent increase in inflation since Biden took office? I guess not," Harvey said. "While the liberal media paints the picture of a Biden-led economic resurgence, the cost of food is still up nearly six percent year-over-year. The price of baby food and formula is still up 7.5 percent. Fruit and vegetable costs are up almost 9 percent, and 11.5 percent for bread. The price of pet food, meanwhile, has jumped over 12 percent. How about monthly rent? Up 8.3 percent."

"Biden and his allies are right to realize that the 2024 election will come down to the economy," Harvey said. "Electorally speaking, they are better-off harping on the economy than affirmative action or ‘gender identity,’ given that pocketbook issues affect us all." But they're misreading the room... Drawing more attention to Bidenomics is bound to backfire because it only draws attention to its unpopularity." The numbers don't lie: Inflation is "still above the Federal Reserve’s own target rate of 2 percent," the national mortgage rate average "exceeds 7 percent—up from 2.65 percent when Biden became president," and "wage growth isn’t keeping up with inflation, so people are less and less able to afford America’s cost of living... People are losing money in Biden’s economy, and they know it."

In Heritage, EJ Antoni said Bidenomics is "quietly robbing you blind."

"Prices rose 1.4% over the entire year before Mr. Biden took office. Eighteen months later, prices were rising about that fast in a single month," Antoni said. "Inflation remains more than twice what it was when Mr. Biden became president, and prices have already risen 16% during his term. This is devastating for the average American worker." The data "tell a different story" than the White House. "In June, average hourly earnings were $33.58, a healthy 12.2% higher than 2½ years ago. But during that same time, prices have risen even faster, so that the average hourly wage today can buy only what cost $29.03 when Mr. Biden took office.

"The difference between this inflation-adjusted wage and the nominal wage is a whopping $4.55 an hour. That means the average American worker last month paid an inflation tax of 13.5%, like paying a second income tax. And unlike the federal income tax, which has deductions, tax credits, and other ways to shield your income, there is no safe harbor in the stormy waters of inflation. Every dollar everywhere loses purchasing power as the government devalues the currency to pay for its profligate spending," he said. "For the average American worker, it’s about $9,100 a year in added taxes that most people don’t understand they’re paying."

In National Review, Jim Geraghty wrote about the coming choice.

"On paper, the current U.S. inflation rate is 3 percent year-over-year, a significant decline from the 9 percent of June 2022 and much closer to the U.S. Federal Reserve’s target rate of 2 percent. But judging from the survey responses, Americans are still feeling the effects of the explosion in prices from early 2021 to this past spring. Remember, for most goods, prices haven’t gone down to the pre-inflation ‘normal,’ they’ve just stopped increasing so dramatically," Geraghty wrote. "After a lengthy bout of inflation, the highest in 40 years, it’s no surprise that Americans aren’t that impressed by a low unemployment rate or a booming stock market. Nor is it irrational for them to feel economic anxiety."

The "solutions offered over at that socialist publication" Jacobin are different "from what you'll find here," but those writers "have a valid point when they observe that much of this debate features multimillionaires insisting to those with modest five-figure incomes that the economy is thriving and that the latter’s perceptions of financial hardship are irrational... Mortgage rates are really high by the standards of the past four decades. Car prices are extremely high by historical standards. Gasoline prices aren’t as high as the exorbitant prices of last summer, but they’re still high by historical standards. Air travel is much more expensive than before the pandemic."

My take.

Reminder: "My take" is a section where I give myself space to share my own personal opinion. If you have feedback, criticism, or compliments, don't unsubscribe. Write in by replying to this email, or leave a comment.

By traditional measures, Biden can absolutely claim a thriving economy.
The issue is, as always, that traditional measures don't tell us enough.
There are better questions to ask, and Biden needs to start giving better answers to those questions.

There's no doubt that this economy is doing very well by traditional measures.

The writers above have made their points clearly, so there isn't much need for me to rehash the numbers. Generally speaking, when unemployment is low, wages are growing fast, new businesses are being started, and investment in the U.S. is roaring, the economy is going to get praise from the economic pundit class. Those are the rules we've played by for decades and they are the rules we have now. It’s also true that, after falling behind for a couple years, wages are, in fact, finally back to outpacing inflation.

By these standards, Biden deserves his credit. Anyone who praised historically low unemployment and GDP growth under Trump should praise it under Biden, especially considering that it's now happening after a worldwide pandemic. Both presidents deserve some credit for navigating the economic shock that did so much more damage to so many other countries than it did here.

Yet, with all of this in mind, I still think the most poignant piece to come out of this was Branko Marcetic's (under "What the left is saying"). It's pretty rare for me to agree wholesale with something I read in a far-left outlet like Jacobin, but the piece was strong enough it even earned praise from the staunchly conservative Jim Geraghty (under "What the right is saying"). Like Geraghty, my policy prescriptions wouldn't closely match Marcetic's, who I think is right about the sentiment. Americans are feeling negative because there is a lot to feel negative about.

This is and has always been my problem with how our pundits measure economic health: The metrics we use mask what is most relevant for most of the country. GDP growth is great, but can you pay your rent? Having a job is great, but does it pay enough to cover the costs of a single medical emergency? New business applications are great, but how much debt is on your credit card? When was the last time you missed a rent payment? Do you have $5,000 saved up in the bank? How about $500?

I'd much rather know the answers to these questions than the ones we traditionally use. And when those questions have encouraging answers, that's when the economy is really doing well.

Anecdotally, when I talk to my friends and family, here are the kinds of things I hear: Disbelief at how much it costs to put their kids in daycare, or how hard it is to even get their kids into daycare in the first place. Shock that a cocktail can cost $18 at a restaurant. Stress about finding an apartment that is in their budget, or the sense of being stuck in an apartment where rent keeps going up uncontrollably. Complaints about exorbitantly expensive health care that never actually covers the ailments they have.

And all this is to say nothing of the tens of millions of elderly Americans living on Social Security, perhaps the group most vulnerable to the rising inflation these last two years (even after their 8.7% bump in cost of living adjustment).

These anecdotes are all in the larger data. Wages are rising but inflation is too. Unemployment is low but tens of millions of people still couldn’t withstand the slightest blip in their day-to-day life — one expensive car part replacement could kill their savings. Rent is rising, and for many, buying a home is out of reach. Credit card debt is at an all-time high.

There are some unambiguously good things in the anecdotal evidence, too: Friends in blue collar industries have a sense there are more jobs than people and lots of need for labor. For white collar workers, they have an ability to spend more time working remotely, or jump to a better-paying job. For student debt holders, they have more money saved up after a couple years without having to make payments.

Still, economic sentiment usually trails economic reality by a healthy margin. There was a time when inflation was accelerating and conservatives were trying to make it the story but nobody seemed to care. Then, suddenly, people really started to care a lot. Now everyone is still stuck on inflation even as it’s receding, but soon they’ll start to notice things are a little better.

There's also reason to be skeptical about economic sentiment, as it’s usually almost directly tied to sentiment about politicians. In The New Republic, Timothy Noah pointed to the 2016 election, where one week before the election only 16 percent of Republicans thought the economy was improving, while one week after the election (and Donald Trump's win) 49 percent of Republicans suddenly thought the economy was improving — before Trump even got into office.

And still: I have no idea what Bidenomics actually is, because the White House hasn't really defined it in concrete terms. The White House and media seem to believe it's "industrial policy" and domestic investment, and that very well may be true. But if Bidenomics is what the president wants to use to win an election, and win over independent and working class voters, then he will need more than just strong GDP growth and low unemployment — he'll need the data most relevant to middle- and lower-income voters to move in the right direction. And then he'll need time for the good news to sink in.

What do you think? Let us know with the poll in "The extras" section below!

Your questions, answered.

Q: I saw the story on the largest offshore energy project. What concerns me is that offshore energy projects (windmills) seem to have a significant effect on Orcas, driving them to beach and die. This is similar to land energy projects which get federal exemptions for killing eagles, other migratory birds and land animals. If green energy is to replace fossil fuel generated energy and would need much more space to do that (I have estimates of 10x more area to 25% of our land mass), shouldn't there be more caution and study before going with such large projects?

— Frank, from Bradyville, Tennessee

Tangle: Good question. First, I don't think anyone would soberly suggest we transition 100% of our energy to wind and give 25% of our land cover to wind turbines, but it's still worthwhile to be cautious when adopting new technology. If wind energy is killing lots of whales and birds, then we should definitely think twice before expanding it.

But is it?

There are offshore wind farms all over the world, but the only place near them where I'm seeing news about elevated whale deaths is in the New Jersey and New York City area, where one is being developed. At this site, there has been a recent spike in whales (humpback, minke, and right whales specifically — not orcas) washing ashore that has correlated with offshore development, but it hasn't been proven that wind turbines are causing the deaths.

And what's more than just being unable to say that they are, there's good reason to believe that they're not. Autopsies are showing evidence the whales died from blunt force trauma (such as a collision with a ship) and entanglement (such as with a fishing net). The argument that these deaths were more likely caused by an increase in shipping traffic and a northern expansion of the whales' habitable zone is more convincing, at least to me. The story has been framed around wind farms in outlets like The New York Post; but while the Post clearly has biases in favor of blaming the wind farms, it still cites the same evidence and presents the same counter-argument you can find elsewhere.

As for land energy projects having exemptions for killing migratory birds, that was a temporary rule — and one that is kind of misleading.

In 1918, Congress codified a law called the Migratory Bird Treaty Act (MBTA) from a treaty the United States signed with Canada to protect migratory birds from being killed without a license. This made energy and utility companies liable for unintentional bird deaths caused by power plants, drainage fields, runoff, and power lines. It's true that Obama granted exemptions to wind power from this regulation in 2013, which caused a lot of derision from the right. When Trump amended the law in 2017 to only apply to deaths that weren't 'incidental,' the left and conservationists were uniformly opposed. When Biden entered office, he continued Trump’s policy to little fanfare, but ultimately reaffirmed the MBTA in full in September of 2021 — also to little fanfare.

So, if you're keeping score: Yes, wind power was exempted from the MBTA. Then essentially all industry was exempted. Now, no industry is. But honestly, that's all beside the point. Because wind turbines kill an estimated million birds a year, and that should be what we focus on.

That number might sound intolerable, but it needs context. Communication towers kill 6.5 million birds per year. Power lines kill 25 million. Windows kill one billion. Cats kill between 1.3 and 4 billion. There are caveats, as the existing rules are voluntarily enforced and the species affected by wind turbines are different; but if you find yourself arguing against oil fields or wind turbines on behalf of the safety of birds, and you're not spending 1,000 times that energy fighting cats and windows, then your concern might be misplaced.

Want to have a question answered in the newsletter? You can reply to this email (it goes straight to my inbox) or fill out this form.

Under the radar.

Illinois Governor J.B. Pritzker signed a new law that will allow non-citizen immigrants to apply to become police officers. The bill stoked outrage from Republicans in Illinois and a few members of Congress. Only non-citizens who are allowed to work in the U.S. under federal law or are DACA recipients can apply to join the police. The bill's primary sponsor, Democratic Rep. Barbara Hernandez, said it was a natural progression from a 2021 federal government decision to allow some unauthorized immigrants to become healthcare workers and military members. The Fraternal Order of Police denounced the bill, asking, "What message does this legislation send when it allows people who do not have legal status to become the enforcers of our laws?" Newsweek has the story.

Numbers.

$986 billion. The amount of debt U.S. consumers hold on their credit cards.
17%. The percentage increase that is from a year ago.
$10,600. The average yearly cost of daycare for one child in America in 2021.
21 million. The number of American children whose parents lacked secure employment in 2021.
35%. The percentage of people who said they were worse off compared to a year ago, according to a May survey.
21%. The percentage of Americans aged 59 and above who have a net worth of $0 or less.

The extras.

One year ago today we didn't publish a newsletter, but we had just published a non-standard piece on renewable energy.
The most clicked link in Thursday's newsletter was the baggage belt raccoon.
Approved: 833 Tangle readers responded to our poll asking about Florida's new social studies curriculum, with 52% approving — 18% strongly approve, 26% approve, and 18% mostly approve. 16% oppose the curriculum — 5% strongly oppose, 4% oppose, and 6% mostly oppose. 19% have mixed feelings. "There seem to be some good ideas regarding broad perspective within. But it also seems the trouble spots... are egregious enough to make the curriculum unacceptable," one respondent said.
Nothing to do with politics: A visualization for when fruits and veggies are in season.
Take the poll. What do you think of the state of the economy? Let us know!

Have a nice day.

There's now a clear path towards ending AIDS, according to a new report by the Joint United Nations Programme on HIV/AIDS (UNAIDS). The report, ‘The Path that Ends AIDS’, contains data and case studies which highlight countries and leaders who are already following the path and are achieving extraordinary results. Botswana, Eswatini, Rwanda, the United Republic of Tanzania, and Zimbabwe have already achieved the “95-95-95” targets: That means 95% of the people who are living with HIV know their HIV status, 95% of the people who know that they are living with HIV are on lifesaving antiretroviral treatment, and 95% of people who are on treatment are virally suppressed. “The end of AIDS is an opportunity for a uniquely powerful legacy for today’s leaders,” said Winnie Byanyima, Executive Director of UNAIDS. “They could be remembered by future generations as those who put a stop to the world’s deadliest pandemic. They could save millions of lives and protect the health of everyone.” UN News has the story.

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