The average American has a distorted view when it comes to the economy. Despite noticeable improvements and numerous accomplishments by the president and his administration, polls continue to show that the majority of Americans disapprove of how President Biden is handling the economy.
Conversely, polls show that the majority believe Donald Trump would do a better job.
I believe that these poll numbers reflect Americans’ lack of understanding about the president’s role in affecting the economy.
First of all, the president does not control inflation; the Federal Reserve and its chairman, Jerome Powell, do. And, the Federal Reserve is independent from the president and his administration. Powell, in conjunction with board members, determines whether to raise or lower interest rates, which affects everything from credit card rates to buying an automobile or a house.
Inflation has actually come down to 3.3%. The Federal Reserve’s target for inflation is 2%, so while Powell has said that he’s not raising interest rates at this time, he’s still not going to lower them because inflation is still too high.
Nevertheless, progress has been made since President Biden took office. The inflation rate was 9% when Biden first became president, in large part due to supply chain problems caused by the pandemic. Since then, supply chain problems have been resolved, the Stock Market has reached record highs, and unemployment is at 4%, down from 6.3% under Donald Trump.
Furthermore, consumer spending is still strong, and companies are hiring. New and used car prices have dropped and grocery prices, while still too high, decreased, including the price of eggs, which fell 7%. And, consumers continue to spend on restaurants, travel and entertainment, reflecting strong demand.
However, despite these signs of economic progress, prices still remain high at the supermarket and the gas pump, for which President Biden is unfairly blamed. So why are prices at the supermarket still high? The answer is corporate greed.
During his State of the Union address, President Biden mentioned the term, “greed-flation,” the practice by corporations of raising prices for goods while actually giving consumers less product inside of packaging. Pennsylvania Sen. Bob Casey has recently introduced legislation addressing this issue.
Another reason for high grocery prices is monopolization. Just four companies control 70% of the grocery market: Walmart, Costco, Kroger, and Ahold. And, certain manufacturers of goods have a monopoly as well. For instance, a couple of cereal manufacturers control nearly 60% of the cereal market; one company controls 20% of the egg market; four corporations control 85% of the beef industry and 75% of the pork industry.
Massachusetts Sen. Elizabeth Warren recently introduced legislation called the Price Gouging Prevention Act addressing this problem. She and Massachusetts Rep. Jim McGovern have written to the president, urging him to use every tool at his disposal to address corporate greed.
Prices at the gas pump have actually come down a bit in the past month, due to the fact the price of oil has dropped below $80 a barrel. Nevertheless, prices still remain high, in large part due to warmer weather demand and gas companies’ switch from winter-blend to summer-blend gasoline.
Americans do more driving during the warmer months and summer-blend gasoline is more expensive.
So, the reality is, the president doesn’t control gas prices; he’s unfairly blamed when prices go up and wrongly receives credit for prices going down.
So what can the president and his administration do to change the perception he’s doing a bad job on the economy? Well, since he can’t directly influence oil companies or food corporations to lower prices, perhaps his administration can do a better job of controlling the narrative by educating the American people about who and what is really to blame.
Jasper Lucas lives in Sicklerville N.J.
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