by John Carney and Alex Marlow
Four years ago, President Joe Biden and Vice President Kamala Harris took control of the White House by campaigning on lies about the state of the economy under Donald Trump.
We had just been through one of the sharpest economic slumps in U.S. history, largely due to the pandemic lockdowns. But by the fall of 2020, the economy was recovering rapidly. After plunging in the second quarter of 2020, growth rebounded far better than almost anyone had predicted, with the economy expanding at an annual rate of 33.4 percent.
That was the fastest growth by a wide margin in data going back to 1947. Although establishment economists and pundits mocked the prediction of a “V-Shaped” recovery by Larry Kudlow, Trump’s chief economic adviser, that’s exactly what unfolded. In the final quarter of the year, the economy continued to expand rapidly, growing at an annual rate of 4.3 percent.
Not only was the U.S. economy recovering, our recovery was stronger than that of other developed countries that had also dealt with the pandemic and lockdowns. The emergency economic programs put in place by the Trump administration, with bipartisan support in Congress, were wildly successful.
Yet Biden and Harris persisted in making the demonstrably false claim that the economy was in ruins and that what they claimed was Trump’s mismanagement of the pandemic was responsible. They never really got around to explaining what they would have done differently—except sometimes to hint that they thought Trump should have imposed stricter lockdowns and longer restrictions on economic activity—much less how the economy might have fared better.
Vice President Kamala Harris speaks at a campaign rally on August 8, 2024 in Wayne, Michigan. (Andrew Harnik/Getty Images)
This created a dilemma for Biden and Harris when they arrived in the White House. Allowing the economy to continue to recover under normalized fiscal policies would have amounted to an admission that they had deceived the public about the state of the economy. What’s more, the Democrat leadership had constituencies and agendas to pursue, and the crisis appeared to provide an historic opportunity for a huge expansion of government.
So, Biden and Harris let loose the $1.9 trillion American Rescue Plan almost as soon as they set foot in the Oval Office. They had planned to follow this up with trillions of dollars of more spending but were stymied as the reality of escalating deficits and inflation amid economic growth and falling unemployment set in.
Harris in Pittsburgh: Relentless Repeating Lies
It should not come as a surprise, then, that Harris is attempting to run the same playbook against Trump this year. In a speech this week at the Economic Club of Pittsburgh, Harris once again attempted to savage the economic record of Donald Trump and promote the Biden-Harris policies—little changed in substance but now rebranded as her own broad economic vision—as a pragmatic, pro-business program that would revive America’s industrial might.
“From our earliest days, America’s economic strength has been tied to our industrial strength,” Harris said in what was billed as a major economics campaign speech on Wednesday. “The same is true today. So I will recommit the nation to global leadership in the sectors that will define the next century.”
The problem for Harris is that this is much less plausible in 2024 than it was four years ago. For one thing, we now have a record of the economy created by the Democrats’ policies. Inflation rising to the highest level in four decades and then persisting at elevated levels for years will be the hallmark of the administration. But we can add to that the striking failure of the Biden-Harris version of industrial policy to achieve any visible success.
Harris has frequently claimed that the economy added 800,000 manufacturing jobs since Biden became president. But that’s a sleight-of-hand. In fact, manufacturing employment is up just 147,000 from where it was before the pandemic. Over the past two years, manufacturing employment has been essentially stagnant, despite billions of subsidies poured into the sector by the Biden-Harris administration through the Inflation Reduction Act and the CHIPS Act. Real average weekly wages for manufacturing workers have fallen 2.7 percent since Biden and Harris took office.
And things are getting worse. Over the last three months, manufacturing has contracted by 36,000 jobs. The Federal Reserve’s recent decision to cut interest rates by 50 basis points was driven, in part, by fear that the labor market would continue to soften—especially for factory workers.
It’s no mystery why manufacturing employment has been stagnant and is now falling. The Institute for Supply Management’s purchasing managers index indicates that the sector has been in continuous contraction for two years. Over the past two years, core capital goods orders have not grown at all. The August 2024 figure reported on Thursday is actually slightly below the August 2022 figure. Compared with the first eight months of last year, core goods orders are up by a slight 0.3 percent. Year-to-date, overall durable goods orders are down 1.3 percent compared with last year.
Harris has also returned to the habit of lying about the Trump economy. She claimed in her interview with MSNBC’s Stephanie Ruhle that manufacturing jobs had declined by 200,000 under Trump even before the pandemic, repeating a falsehood from her Pittsburgh speech. In fact, factory jobs were up by 414,000 before the pandemic. And even if we include the pandemic, the total decline under Trump never amounted to 200,000.
Another favorite Harris lie involves a report from Goldman Sachs that found growth would be slightly lower in a Trump administration than a Harris administration, largely because tighter border security would restrict population growth. In Harris’ telling at the Pittsburgh speech, this became a forecast that the economy would shrink under Trump and enter a recession. She liked that lie so much that she also repeated it in the MSNBC interview.
Will Harris be able to lie her way into the White House a second time? Harris and Biden are presiding over an economy that, despite low unemployment, is regarded as rotten to most Americans. And most Americans now look back warmly on the prosperity of the Trump years. So, perhaps this time around deceit will not pave the path to power.
