The Biden administration has a proclivity for choosing people with abysmal track records for top political appointments. Consider Jared Bernstein.
A champion of the economic agenda that created 40-year-high inflation, Bernstein was recently promoted to Chair of the Council of Economic Advisors. Unfortunately for Americans and their thinning wallets, he clearly hasn’t learned from his mistakes.
In a recent interview, Bernstein engaged in some of the most spectacular gaslighting ever witnessed in America, while clearly demonstrating how little he knows about the economy. In fact, even just a cursory knowledge of the Biden administration’s own data disproves Bernstein’s entire narrative.
His primary prevarication concerned inflation, a disaster spurred along by his insistence that the government spend, borrow and print trillions of dollars. As inflation continues to rob Americans of their purchasing power with prices rising faster than wages, Bernstein assures us that our financial pain is apparently all in our heads.
Since Biden took office, real weekly earnings have plummeted despite large nominal wage gains. The average American family has seen their weekly paycheck grow by about $200, and yet they can afford about $100 less because of skyrocketing prices. It’s the equivalent of them losing $5,600 in annual income.
Not to be deterred by the facts, Bernstein claims that earnings are growing faster than inflation. The latest data from Biden’s own Bureau of Labor Statistics (BLS) says exactly the opposite. Real (meaning adjusted for inflation) average weekly earnings have fallen 5.1% under Biden.
That decline in real earnings should come as no surprise since prices have risen 15.5% under Biden, as measured by the consumer price index (CPI). Bernstein seems oblivious to this reality. As he attempted to tow the administration’s line on inflation and create positive spin for the president, he managed to get virtually all the facts completely wrong.
He tried specifying that earnings growth has been outpacing inflation, not over the entire Biden administration, but just over the last six or seven months. That’s a nice talking point, but it’s equally wrong. Real weekly earnings dropped precipitously after Biden took office, bottomed out in June 2022, and have flatlined since then.
Bernstein threw out another fallacious talking point on inflation when he claimed that the annual increase in wages has exceeded the annual increase in inflation. Once again, this diminishment of Americans’ financial pain runs completely contrary to the facts, as provided by the administration’s own BLS.
The annual increase in nominal weekly earnings has been below the annual increase in CPI for the last 26 months, or 93% of Biden’s presidency. That’s a record and could very well earn Biden the moniker of the pay-cut president.
The drastic rise of prices over the last two and a half years was caused by the government spending, borrowing and printing trillions of dollars. That devalued existing dollars and made the American people poorer, able to afford fewer goods and services and greatly increased the cost of living.
As a result, consumers have been squeezed to a greater degree than at any other time in the last four decades. Yet Bernstein claimed that consumer spending remains resilient, driven by his fictitious real wage growth.
In fact, consumer spending has turned anemic. Its growth over the last year has been fueled largely by credit, not wage growth. In other words, consumers are going into debt because they cannot afford to live in Biden’s America. Household debt has now eclipsed $17 trillion, and borrowing costs are going through the roof. The average family is paying an extra $1,600 in financing costs today compared to when Biden took office.
Is Bernstein truly ignorant of the facts, or this deceptive spin? It’s difficult to assume ignorance on the part of the Chair of the Council of Economic Advisors, but perhaps Bernstein’s inability to perform even basic economic analysis shouldn’t be surprising. His academic degrees are not in economics, but in music, philosophy and social work.
Bernstein lacks the training and the track record to perform his role. Americans will be lucky if he merely doesn’t make things worse during the remainder of his time in Washington.
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ABOUT THE WRITER
E. J. Antoni is a public finance economist at The Heritage Foundation and a senior fellow at Committee to Unleash Prosperity.
