Economist corrects president after touting ‘Bidenomics’ in Chicago speech

Published

2 years ago

June 29, 2023

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close video Any of Biden’s economic benefits ‘not coming for a long time’: Kenneth Rogoff

Harvard University professor of economics Kenneth Rogoff eyes May PCE data, the final Q1 GDP report and the state of the U.S. economy under ‘Bidenomics.’

As Federal Reserve Chair Jerome Powell and President Joe Biden tout their fiscal policies on the world stage, one Harvard economist set the record straight on the state and future direction of the U.S. economy.

"Voters are very unhappy about inflation and inflation's not going away. And the first part of ‘Bidenomics’ definitely contributed to that inflation. There's no question about it," Harvard University professor of economics Kenneth Rogoff said on "Mornings with Maria" Thursday.

Speaking at a financial stability conference in Madrid, Spain, Powell stated that he does not expect core inflation to return to the central bank’s 2% target until 2025. Meanwhile, the president boasted about "Bidenomics" on the campaign trail, attributing it to pandemic recovery and "new" jobs.

"Today, the U.S. has the highest economic growth rate, leading the world economy since the pandemic, the highest in the world," Biden said on-stage in Chicago on Wednesday. "We created 13.4 million new jobs, more jobs in two years than any president has ever made in four."

AVERAGE AMERICAN LOSES MORE THAN $5K PER YEAR UNDER BIDEN'S ECONOMY: E.J. ANTONI

Rogoff corrected Biden on a "tight" labor market, with minimal GDP growth and "not very good" productivity.

“There’s no question” that President Biden’s economic policies “definitely” contributed to decades-high inflation, Harvard economist Kenneth Rogoff said on “Mornings with Maria” Thursday. (Getty Images)

"He has these other things: the CHIPS Act, which was to sort of protect us from Taiwan, actually a good idea, but had too much social policy mixed in," the economist said. "And then the Inflation Reduction Act, which I think it's more debatable. But the benefits, if there are, they're not coming for a long time. They're not going to be seen until after the election."

"So he's sort of stuck with the inflation and the stimulus that came from the first part of his administration," he continued.

The final rate for first-quarter GDP showed annualized growth of 2%, higher than economist expectations of 1.4%. Looking ahead to Q2, Rogoff noted that the "big picture" behind GDP depicts concerns around productivity. close video Inflation is entrenched in consumer services: Kenneth Rogoff

Former IMF chief economist Kenneth Rogoff joined Mornings with Maria to discuss the U.S. economy as the Federal Reserve continues to fend off inflation.

"They are maybe creating jobs to the extent the policies are doing it, but they, at the same time, are possibly sacrificing productivity growth. I think that's a tradeoff that Bidenomics [is] probably willing to accept, but it has its costs in terms of our competition with China and America's stature in the world," the Harvard professor pointed out.

In terms of inflation, the Fed may have to be "very patient" in waiting to hit their 2% goal, Rogoff added. Last month, the consumer price index reached 4%, its lowest level in two years.

"I think 2025 is probably optimistic to get to 2%. I think it's going to be longer than that," he said. "I think they're going to keep raising interest rates until we see another financial crisis or some kind of big financial stress."

With no sign of inflation cooling down, Rogoff said that could mean policymakers and economists are still anticipating a recession.

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‘The Bottom Line’ co-hosts Dagen McDowell and Sean Duffy criticize Biden for taking an economic victory lap as inflation pain persists on ‘The Big Money Show.’

"[The Fed] won't be that successful in bringing inflation down to 2% without a recession," the Harvard economist said.

"It also ties in with: people aren't happy. Whatever they're doing, they're just not happy with the situation," Rogoff continued. "And I think the president's trying to correct that perception as he views that over the next year."

Politics

Reform UK tops landmark poll for first time

Published

1 hour ago

February 3, 2025

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Reform UK tops landmark poll for first time

Reform have topped a Sky News/YouGov poll for the first time as the party continues to shake up British politics.

Nigel Farage’s Reform UK has edged in front on 25%, with Labour pushed into second on 24% and the Tories on 21%.

The YouGov poll, taken on Sunday and Monday, also puts the Lib Dems on 14% and Greens on 9%.

Watch and follow reaction and analysis live in the Politics Hub

All the polling moves that push Reform UK to the top for the first time this week are within the margin of error and the overall picture remains unchanged – with Britain in a new period of three party politics in the polls.

However, the symbolism of Reform UK topping the poll is likely to be seized on by MPs from all parties.

One in five Tory voters at the last election would now vote for Reform.

The Tories are likely to be the hardest hit by the poll, having been in third place since YouGov restarted polling after the general election.

The Sky News/YouGov poll also found Kemi Badenoch has slipped behind Nigel Farage when voters are asked whether they have a favourable or unfavourable opinion of the leaders.

Last month, Badenoch has a net favourability rating of -25, but that has now dropped to -29 this month.

This puts her below Farage, who had a net favourability rating of -32 last month, which has now risen to -27 this month.

Keir Starmer is less popular than both Farage and Badenoch, with his net favourability rating now at -36.

Lib Dem leader Ed Davey is much more popular, with his net favourability rating now at -9 – although this is not directly translated across into voting intention.

These figures are likely to restart the debate in the Tory party about whether they should consider merging with Reform UK, something which Badenoch has repeatedly rejected.

A total of 43% of those polled who voted Tory in the last general election support a merger, compared with 31% against.

Reform UK voters are more likely to oppose, with 40% against and 31% for.

Politics

Starmer must delicately balance his risky EU reset as UK braces for Trump’s next move on tariffs

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1 hour ago

February 3, 2025

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Starmer must delicately balance his risky EU reset as UK braces for Trump's next move on tariffs

As Donald Trump kicks off his threatened trade war by slapping tariffs on both friends and foes alike, Number 10 is preparing for the moment he turns his attention to the UK.

The unpredictability of the returning president, emboldened by a second term, means the prime minister must plan for every possible scenario.

Under normal circumstances, the special relationship might be the basis for special treatment but the early signs suggest, maybe not.

It was never going to be an easy ride, with Sir Keir Starmer’s top team racking up years of insults against Trump when they were in opposition.

The bad feeling continued when Peter Mandelson was proposed as the UK’s new ambassador to the US – prompting speculation he might even be vetoed.

Amid all of this, the much-anticipated call between the two leaders seemed slow to take place, although it was cordial when POTUS finally picked up the phone last Sunday, with a trip to Washington to come “soon”.

It is against this slightly tense backdrop that the future of transatlantic trade will be decided, with Westminster braced for the impact of the president’s next move.

So, it’s unsurprising that as he waits, Sir Keir will spend the next few days resetting a different trading relationship – with Europe.

In this area, he is on slightly firmer ground, as the spectre of a global trade war makes European leaders want to huddle closer together to weather the storm.

And conversely, the Labour government’s track record works in their favour here, as they cash in their pro-EU credentials and wipe the slate clean after the bad-tempered Boris Johnson years.

It is still, however, an ambitious and risky endeavour to begin the delicate process of removing some of the most obstructive post-Brexit bureaucracy.

For minimal economic benefits on both sides, the UK must convince the Europeans that they are not letting Britain “have its cake and eat it”.

At the same time, Brexiteers back at home will cry betrayal at any hint that the UK is sneaking back into the bloc via the back door.

To make it even trickier, it must all be done with one eye on Washington, because while a united Europe may be necessary in the Trump era, the prime minister will not want to seem like he is picking sides so early on.

As with so many things in politics, it’s a delicate balancing act with the most serious of consequences, for a prime minister who is still to prove himself.

Environment

GM is cutting a shift at its EV plant in Mexico because of the Honda Prologue

Published

1 hour ago

February 3, 2025

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GM is cutting a shift at its EV plant in Mexico because of the Honda Prologue

GM cut a shift at its Ramos Arizpe manufacturing plant in Mexico, where it builds the Chevy Equinox EV and Honda Prologue. According to GM, the move was due to Honda’s decision to slow Prologue output. With sales of its sole electric SUV in the US surging, why is Honda cutting back?

GM cuts shift at Mexico EV plant over Prologue output

Although GM just added a third shift in May 2024, the plant returned to a two-shift schedule starting on January 20.

The move was initially thought to be because its contract to build the Prologue ended, but it turns out that Honda is scaling back.

“This change is mainly due to our customer Honda’s strategy of reducing the production volume of the Prologue model,” GM said in a statement. The shift was added to meet higher export demand for gas engines and Ultium-based EVs like the Chevy Equinox and Blazer EVs and Honda’s Prologue.

With less Prologue EV output, GM no longer needs the extra shift in Mexico. According to Mexico Business News, the company is eliminating 800 jobs at the plant due to the changes.

GM also said the changes were due to “an adjustment in the mix of production of GM vehicles at the site,” so it wasn’t entirely the Prologue’s fault. The company also builds gas-powered Chevy Blazers at the site.

Honda didn’t confirm the changes, but a spokesperson (via Automotive News) said, “It is quite normal for our business to make production adjustments during the year in order to meet customer needs and market conditions. We will continue to carefully manage production and inventory for our entire product lineup to meet anticipated demand in 2025.”

After delivering the first models in March, Honda’s Prologue was one of the best-selling EVs in the US in 2024. With over 33,000 models sold last year, Honda’s electric SUV was the seventh top-selling EV, ahead of the Chevy Equinox EV (28,874).

Electrek’s Take

Given that the Prologue is one of the top-selling EVs, why is Honda slowing production? Honda is moving away from GM’s Ultium platform with its upcoming 0 Series EVs, but that isn’t the reason yet.

The Prologue was once again one of the top-selling EVs in the US last month. With 3,744 models sold, it outsold Ford’s Mustang Mach-E (3,529), the Hyundai IONIQ 5 (2,250), and the Kia EV6 (1,542).

The move to slow output at this point is questionable. As more details unfold, we’ll learn more. Check back for more information on the situation.

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