WASHINGTON, June 26 (Reuters) - Perhaps the most famous
one-liner in a presidential debate, Ronald Reagan's "Are you
better off than you were four years ago?" question to voters in
his match with Democratic incumbent Jimmy Carter in October
1980, came as high inflation pummeled consumers' spending power
and captured a general malaise about the economy.
As President Joe Biden and former President Donald Trump
head to the first of two debates ahead of their rematch this
November, some version of that question may well come up or at
least be on the minds of people taking stock of the past, very
turbulent, four years.
But comparison between now and the pandemic "before times"
is difficult. Look at almost any economic data series and the
pandemic is not just an obvious break in the trends, but poses
the challenge of when to mark the end of the "normal" years for
Trump and the resumption of a "normal" period for Biden.
To some extent the problems likely to get attention in the
debate are modest compared to the ones Reagan used to knock
Carter.
While prices surged in the wake of the health crisis,
especially for groceries, inflation as measured by the Consumer
Price Index was 3.3% in May compared with more than 12% at the
time of the Reagan-Carter debate. The unemployment rate has,
outside of the pandemic, been below 4% across much of both the
Trump and Biden terms. It was 7.5% when Carter took office in
1977, was 7.5% when he debated Reagan in 1980, and barely fell
below 6% in the years between.
So the economy is healthier than when Reagan posed his
question, but
how does it compare
with four years ago, when Trump and Biden last went
head-to-head?
We put the questions to analysts, experts and voters for
some snapshot answers ahead of Thursday's debate.
MICHAEL STRAIN, RESIDENT SCHOLAR, AMERICAN ENTERPRISE
INSTITUTE:
"I think the typical worker in the typical household was
better off in February 2020 than they are now. It is all about
inflation," Strain said, noting that while wage growth has been
fast, and fastest for lower-paid occupations, it has not fully
kept pace with prices.
Beyond that, Strain said the most striking thing in
comparing Biden and Trump on economics may be the similarities -
from deficit spending to the use of tariffs.
"There is a lot more overlap than is widely realized," he
said. "I don't think either is fiscally responsible. Trump
wanted to shower special attention on domestic manufacturing and
chose to do it through tariffs. Biden chose to do it through
tariffs and subsidies."
KAREN DYNAN, HARVARD UNIVERSITY:
Inflation hurts and the housing market has become hard to
navigate, especially for younger people and particularly with
high Federal Reserve interest rates being used to contain
prices, Dynan said.
But by very broad measures, "households' financial positions
are stronger across the distribution than they were prior to the
pandemic," she said. "We saw financial gains...among groups that
struggle to build wealth. That is a victory for the aggressive
policy responses to the pandemic."
The Fed's latest data shows the share of household net worth
held by the bottom 90% rose by 1.2 percentage points during
Trump's four years in office and 1.8 percentage points during
Biden's first three years. Looking outside the immediate impact
of the pandemic, the share held by the bottom 90% rose 0.4
percentage point under Trump's middle two years in office, 2018
and 2019, and by 1.2 percentage points during Biden's middle two
years, 2022 and 2023.
DIANE SWONK, CHIEF ECONOMIST, KPMG:
Swonk says the focus should be on the long term. The
pandemic amplified trends that were already developing under
Trump, towards less globalization and heightened geopolitical
risk, and those have continued to intensify.
"The walk away from the neoliberal ideas of trade and
cooperative security, a backlash towards free trade and
immigration, more regulation and more oversight - that gets lost
in translation...
"There is no question that the economy in the aggregate is
better than it was," she said. But "we are in a much more
volatile world. Is the world better off given all the volatility
and hot wars and ongoing misery? It is hard to turn around and
say yea this is great."
ADAM OZIMEK, CHIEF ECONOMIST, ECONOMIC INNOVATION GROUP:
"If we can avoid a recession I think we are in a really good
place. That labor market has not been this tight in a long time
and policymakers are learning that we can actually run the
economy hotter than we thought," he said. But "it was quite a
rough path to get here...People are mad that prices have gone up
a lot."
And while inflation has cooled, high interest rates "are
causing a lot of pain in the housing market."
ANNA MATSON, 27, SMALL BUSINESS OWNER IN MICHIGAN:
"I definitely feel like I'm worse off. Four years ago, me
and my husband both had full time jobs, and we had a lot of
extra money to spend on getting organic food and going on
vacations, and just doing all the things we love to do together.
And we've really had to cut back because of the price of
everything. We've even started growing a ton of food so we don't
have to pay crazy prices at the grocery store for clean food."
Matson, who supports independent candidate Robert F. Kennedy
Jr, also said high interest rates are preventing them from
upsizing from the starter home they bought with a 2.6% mortgage.
"Just because the interest rates are so high, we are stuck.
There's no way we would be able to move unless we had a huge
bump in our income."
EDDIE ROMAN, 56, UBER DRIVER IN FLORIDA:
"I think I'm about equal. I don't think either one (Trump or
Biden) did anything for me. I have been working two jobs for the
last eight years of my life. Only last year did I now take on
the one which is this (Uber driving) and this part time, and
that's only because I've been medically retired."
Roman said gas prices matter a lot to him, and they were
lower under Trump. "Under Trump ... you can obviously see the
difference with gas prices going down. I don't know about taxes,
because I don't really follow economics a whole lot. But I know
that bread and milk and all these things weren't super
expensive. Now do I think a president controls all that? No."