Bidenomics report card: Biden gets a boost

Yahoo Finance's Rick Newman breaks down the latest Yahoo Finance/Moody's Analytics Bidenomics scorecard.

Video Transcript

- Somebody else who pays attention to what happens in Washington for us is Rick Newman. He's joining us now with the Bidenomics report card. And you're upgrading the administration. Can you make a case as to why?

RICK NEWMAN: Sure. We did the same exercise for President Trump. We used exactly the same methodology. Now we're just applying it to Biden, comparing the economy under his watch with the economy under seven prior presidents, going back to Jimmy Carter in the 1970s, Adam.

And this month, Biden's grade on the economy is a B-plus. I think that's better than a lot of people might think. We definitely have a weird economy. We've got some distortions. But Biden gets top marks for employment gains during the first eight months of his administration. That's partly lucky timing because he came in just as the COVID vaccines were rolling out and companies were starting to hire back a lot of people.

He gets pretty good marks for the stock market. That's largely due to the Federal Reserve, as we discuss quite often on our shows, Adam. But overall, the economy is good, even though we've seen a decline in consumer confidence during the last couple of weeks as the delta variant has taken hold and kind of put the economy on pause. The underlying economy is pretty good right now.

- Pretty good, but how much-- when we talk about consumer sentiment, I notice missing from the metric is inflation. And a president can or cannot be responsible. Sometimes they inherit. Sometimes they assist in making it worse. When you're paying-- and I keep throwing this quote out-- $6.99. That's what they were charging for the half gallon of 1% milk. It blew me away because I can remember when we were paying, not too long ago, $4.99.

Everything is more expensive. And right or wrong, the Biden administration is going to own that, right?

RICK NEWMAN: Yes, absolutely. And I could get you cheaper milk, by the way, Adam. I know where to get it for about $4 or maybe even $3.79 a gallon, so I'll bring some in next time I see you. But gasoline is another one, milk and gasoline. You know, gas prices are up more than $1 a gallon over the last year. We're really still talking about pandemic distortions. I mean, a lot of this is just supply chain snafus, you know, the quick reopening that a lot of people, including manufacturers and producers, did not expect.

But I actually think that inflation is going to look a little more favorable for Biden a year from now, which is when it's really going to matter because that's when voters are going to be preparing for the 2022 midterm. So a year from now, the basis for comparison is going to be not a low base, as it is now, going back to right-- sort of the bottom of the V from when the recession started to unwind. But we're going to be comparing prices a year from now from a high base.

So we could have at least numbers that look better. But you don't always persuade voters with just giving them data and saying, look, you're better off. The spreadsheet shows it. If people feel the crunch from what feels like high gas prices or high milk prices, you're right. They are going to punish the incumbent. And that incumbent is President Biden and his fellow Democrats in Congress right now.

- And I will confess, I do shop at the overpriced, way too expensive supermarket on the Upper East Side because it's across the street. But in all seriousness, something not getting a lot of attention right now is that revenue into the US Treasury was record high during the pandemic. Is that going to undermine what the administration is attempting to do with these spending bills?

RICK NEWMAN: If only we had too much revenue coming into the Treasury, Adam. No, we still have a total national debt that is getting close to $30 trillion. And, you know, our annual deficits are still over $1 trillion per year. I mean, this-- this was unprecedented until the deep recession year that Obama walked into in 2009, and now we have trillion-dollar deficits on a regular basis.

No, and this is not going to change anything about Democrats trying to raise some taxes on businesses and on the wealthy because they need that money to pay for the programs they want to do. And one or two good months of revenue at the Treasury is not going to change what is a pretty bleak overall picture.

- All right, Rick Newman, we appreciate your Bidenomics scorecard--

RICK NEWMAN: Thank you, Adam.

- --and Rick's article on the Yahoo Finance web page.