By Howard Schneider
WASHINGTON (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.”
(Reporting by Howard Schneider; Editing by Andrea Ricci)
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