An economic requiem for the Biden administration

The New York Times famously prepares obituaries for notable individuals well in advance of their death.

- BARRY EICHENGREEN

Now that President Joe Biden's administration is about to expire, an elegy is in order for its economic achievements, failures, and missed opportunities.

The administration's achievements are self-evident, at least to the clear-eyed analyst—if not, as it appears, to the average voter. In Biden's four years, the US outperformed virtually every other advanced economy in terms of output, employment, and productivity growth. Despite inheriting an unemployment rate of 6.3% in January 2021 and an elevated level of pandemic-related uncertainty, the administration drove unemployment down to just 4% in its first 12 months, where it essentially remained throughout Biden's term.

Job growth among Black workers was especially impressive. Unemployment among African-Americans fell below 6%, down sharply from an average of 10% in the first two decades of the twenty-first century.

Admittedly, Biden's inheritance also included a pandemic-stricken economy, creating ample scope for output and employment to bounce back. But the aftermath of the global financial crisis and recession of 2007-10 showed that the mere presence of economic slack is no guarantee of a macroeconomic bounce-back and sustained recovery. Biden administration officials took this lesson to heart. By boosting demand, the massive macroeconomic stimulus applied through the American Rescue Plan, the Infrastructure Investment and Jobs Act, the Inflation Reduction Act (IRA), and the CHIPS and Science Act made all the difference.