Biden Inaugural Year Featured Inflation, COVID19, Economy & More

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As President Joe Biden’s administration heralds the first anniversary of his inauguration this week, analysts are dissecting where his administration has succeeded and disappointed thus far during his tenure.

In Summary

  • Analysts review the first year of the Biden administration. According to a RealClearPolitics average of job approval polls, 52% of Americans disapprove of Biden’s performance.
  • According to the American Enterprise Institute, the administration’s main focus ought to be on messaging.
  • The White House press secretary hails the “best year in American history” for employment growth. According to two analysts, President Joe Biden injected about $3.5 trillion into the economy.

Analysts examine the inaugural year of the Biden administration.

“Biden’s troubles begin with two major issues: the pandemic and inflation,” according to Larry Sabato, director of the University of Virginia’s Center for Politics. “In both instances, Biden assumed they were improving when, in fact, they were not.”

According to a mail sent to MarketWatch, Sabato said the president’s administration miscalculated inflation and a fair lot about the pandemic. Nobody can be faulted for incorrectly predicting variants, but Biden’s experts were simply unprepared for what appear to be likely outcomes – the need for more testing devices, and the like.

Additionally, Sabato notes that the Biden administration’s withdrawal of US forces from Afghanistan was a “failure.” According to the University of Virginia analyst, while the disorderly retreat was unlikely to be “permanently detrimental” to Biden politically, it “ruined what would have been a very popular gesture to end a two-decade conflict,” as “inadequate contingency planning was clear.”

When asked what the 46th president is getting wrong, Matthew Continetti, a resident fellow at the American Enterprise Institute, a conservative think tank, chose the same three themes as Sabato.

Continetti believes the president has failed on inflation, Afghanistan, and the pandemic, which has contributed to his political impasse, According to a RealClearPolitics average of job approval polls, 52% of Americans disapprove of Biden’s performance, while 42% approve.

Biden
Mathew Continetti

Biden’s pandemic strategy has been a strength, but he “didn’t quite anticipate” how the coronavirus would evolve with its delta and omicron variants, and he underestimated the number of Americans who “are not going to listen to the government and are rebelling against the idea of vaccine mandates,” Continetti said.

Henrietta Treyz, director of economic policy at Veda Partners, said the Biden administration’s top priority should be messaging. 51% of Americans believe the US economy is deteriorating, even though the unemployment rate has decreased and the economy has continued to grow, she said.

The message about economic improvement “simply doesn’t get through when omicron variations, inflation fears, transport disruptions, and school closures continue to wreak havoc on the daily lives of normal Americans,” Treyz told MarketWatch. “The administration could do a better job of communicating a consistent macro message regarding the upcoming months of COVID.”

After noting the approaching first anniversary, White House press secretary Jen Psaki touted Tuesday “the largest year of job growth in American history,” noting that it was the “direct result of actions taken by President Biden and Democrats in Congress, including the American Rescue Plan, the vaccination effort it helped fund, and now the bipartisan infrastructure bill.” Psaki told reporters at a briefing that the US economy added 6.4 million jobs in the last year and the jobless rate decreased to 3.9 percent from 6.4 percent.

The milestones of President Biden

Treyz of Veda and Continetti of AEI both cited Biden’s top accomplishments as the COVID relief package in March and the infrastructure law in November.

He injected about $3.5 trillion into the economy through these two initiatives, Treyz claimed, assisting in “pulling the United States out of the COVID recession and emerging with a more strong and regenerated infrastructure grid.”

Continetti stated that while he did not believe the aid package was necessary, it was an accomplishment, while the bipartisan infrastructure PAVE, 0.55% measure was “an example of exactly what a lot of voters believed Biden would spend his entire presidency doing — that is, cutting deals with Republicans on non-controversial items like roads and bridges.”

“alluding to the political machinations over the infrastructure law, Continetti, the AEI senior fellow explained that It took the president a long time to get there because he was pairing it for a long time with the much more ambitious Build Back Better plan, which never materialized.

Sabato stated that a major point Biden has gotten right is that he is “not Donald Trump.”

“He is, on the whole, rational. He rarely attacks individuals or foreign countries,” Sabato explained. “He is uninteresting, which is precisely what the country needed following four years of heart-attack-inducing frenzy.”

Biden
Larry Sabato

Taking stock of the stock market’s advance

What are investors to make of the S&P 500’s SPX’s 0.71% of about 21% in the last 12 months?

Continetti observed, referencing to what the Federal Reserve’s Jerome Powell is expected to say this year that the gain needs to be balanced against inflation and how consumers are feeling, and I’m not sure the market has accurately priced in the magnitude and length of the inflation.

“Of course, we’ve yet to see Powell follow through on his commitment to begin raising rates and reducing quantitative easing in response to the pandemic,” he added.

Treyz stated that the “picture the market is painting” is one of “opportunity, rebound, and growth in a relatively unique recession-rebound environment in which, rather than man-made inflation events such as the 1970s, this is one of the highly complicated but predictable global supply disruptions that will take time to unwind.”

“I would argue that the stock market’s precipitous collapse and swift recovery throughout the pandemic have become more unpredictable, and volatility is on the horizon,” she added. “Volatility creates opportunity, and most investors are looking forward to pulling out the heavy guns to traverse the next [one to three] years.”

Biden
White House Press Secretary, Jen Psaki

What’s to come

Republicans are widely predicted to retake control of the United States House of Representatives in November’s midterm elections, and they are also projected to retake control of the United States Senate. Having his Democratic Party lose control of both chambers of Congress might shift Biden’s attention away from domestic aims and toward foreign affairs.

“We are bullish and quite out of step with the consensus in expecting another $700 billion to $1 trillion spending plan from Washington in the next months, but after that, it will be all about foreign policy and China,” Treyz said.

According to Sabato of the University of Virginia, the “most shocking aspect of Biden’s first year is that 71% of the Republican Party believes he is not a legitimate president — which is completely and utterly false.”

“The American Republic will perish if this trend continues, as the rot will last until 2024 and beyond. This is a critical issue on a par with the pandemic, if not more so than inflation and some of the other difficulties the country faces,” he said.

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