Economic output, or gross domestic product, has climbed above its pre-crisis level.
Investors have reason to be happy, too: The S&P 500, a broad measure of the stock market, rose by 19.3 percent during Mr. Biden’s first year as president. The markets’ large losses this past week wiped out only a small portion of those gains.
The White House finds itself in the position of a physician who has administered a successful course of treatment but who has neglected to prepare the patient for the side effects or to give the timeline for a full recovery. A lot of pain was averted, but it’s hard to feel gratitude for things that didn’t happen. The economic outlook is strong, but it’s hard to feel gratitude for things that haven’t happened yet. Right now, the pain of inflation is front and center for most.
No one is surprised when recessions deliver unpredictable disruptions. We are now being reminded that recoveries are messy, too. People are trying to buy more cars than are readily available. Diners are more eager than waiters to return to restaurants. The nation’s cargo ports have been overwhelmed by a surge in imports.
Mr. Biden, however, has contributed to his own political woes. Through much of the fall, the president and other administration officials seemed to be downplaying the dangers of inflation. Mr. Biden also continues to present the administration’s longer-term economic initiatives, like antitrust enforcement and a push for child care subsidies, as measures that would help to combat inflation. The effect of such policies would not be felt for some time, and Mr. Biden’s insistence on this implausible narrative may be contributing to a sense that he is not taking inflation seriously.
The administration has not taken action in some areas that could help to restrain inflation or mitigate its effects. The tariffs that Donald Trump imposed on Chinese imports remain in place. Legal immigration has continued to decline, worsening labor shortages. A one-year expansion of the child tax credit helped to reduce the share of American children living in poverty to the lowest level since the government began to keep records in the 1960s. But Democrats, unable to agree on the terms of a permanent expansion, have allowed the expanded benefits to expire, depriving millions of working families of needed help.
Some of the president’s critics assert that the United States missed a chance for a Goldilocks recovery, neither too cold nor too hot. They argue that a smaller dose of economic aid would have delivered growth without higher inflation. But European nations, which generally administered proportionally smaller doses of aid, are now experiencing both less inflation and slower recoveries. Critics also ought to keep in mind the not-so-distant past: In the aftermath of the 2008 crisis, the United States similarly delivered an inadequate dose of aid. Inflation remained quiescent, but that was little comfort to the millions who waited years to find work.
The challenge now is to bring inflation back under control without undermining the economic recovery. The work will mostly be done by the Federal Reserve, not by Mr. Biden or his administration. The role of presidents in shaping the nation’s economic fortunes is generally overstated. But if the government can complete the work it has begun, this administration may yet deserve the victory laps it is taking for successful stewardship of the nation’s economy.