In the only 1980 presidential debate, Ronald Reagan famously asked, “Are you better off now than you were four years ago?” This question ultimately sealed Jimmy Carter’s political fate. Similarly, in 1992, Bill Clinton used James Carville’s famous phrase, “It’s the economy, stupid,” to defeat George H. W. Bush for a second term. As Donald Trump faces off against Joe Biden, he struggles to come up with a similarly effective line. Despite presiding over the largest income gains in the 21st century, Trump’s economic record pales in comparison to Biden’s. In fact, Biden surpasses Trump in categories such as economic growth, business investment, consumer spending, job creation, and entrepreneurship. Even when taking into account the impact of the COVID-19 pandemic on the global economy, Biden’s record remains superior. However, when it comes to how voters judge a president’s economic performance, other factors such as personal income and purchasing power are often more important. In these areas, Biden also outperforms Trump. For example, from 2021 to 2023, working Americans saw an average increase of $3,250 in their annual wages, adjusted for inflation. This is significantly higher than the average increase from 2017 to 2019. Timing also plays a crucial role in how voters perceive a president’s economic performance. Carter’s presidency was plagued by severe inflation, which eroded people’s buying power just as he was preparing to campaign for reelection. In contrast, Biden’s timing has been more favorable. In 2021, per capita incomes increased by 3.1%, but fell in 2022 due to inflation. However, in 2023, as inflation decreased and employment rose, real incomes jumped by 4.2%. This is a level of income growth that Trump, Obama, and Bush never achieved during their presidencies. In fact, in the last 50 years, Americans have only experienced larger annual income gains five times, including twice under Reagan, twice under Clinton, and once, briefly, under Trump. It’s worth noting that in 2020, Trump’s last year in office, real per capita disposable income increased by 6.4%. However, this growth was solely due to government stimulus measures and had nothing to do with the state of the economy. This may explain why many Americans have positive memories of the Trump economy. However, when looking at the bigger picture, it’s clear that Biden’s economic record is far more impressive.
