EXCLUSIVE: Heritage Foundation Economist Blasts Media Claim US Has ‘Achieved Economic Nirvana’

December 13th, 2023 9:00 PM

There seems to be no end in sight for the media gaslighting on President Joe Biden’s abysmal economy. One economist has had it.

Business Insider had the audacity to publish an asinine piece of economic propaganda Dec. 3 that reeked of a public relations stunt by Biden’s press team: “After 3 years of pain, America has finally achieved economic nirvana.” The author, Renaissance Macro Research Head of Economics Neil Dutta, celebrated how supposedly “[t]he signs of a well-balanced economy are everywhere.” He continued: “Current economic data is consistent with a soft landing for the economy — a situation in which inflation cools without causing a recession or sudden spike in unemployment.” 

But Heritage Foundation Public Finance Economist EJ Antoni laid waste to Dutta’s argument in an exclusive interview with MRC Business: “Articles like that can only be written by those who are woefully ignorant of the data at every level.”

Antoni was right on target.

 “The most obvious example” of Dutta’s illusory “nirvana” was “the slowdown in inflation,” cherry-picking how core consumer prices — which excludes food and energy — allegedly rose at “an annualized rate of 2.8 percent since June.” Of course, nowhere did Dutta mention that prices are still up 17.6 percent since Biden took office.

Dutta then skewered his own argument in a subsection headlined, “Coming in for a soft landing,” by letting it slip that his point was based in large part on predictions, not facts: “And there are clear signs of continued disinflation on the horizon: Wholesale auction prices for vehicles imply used-car prices could start to come down, private measures of rent prices suggest that housing inflation will continue to cool off, and an improvement in supply chains suggests prices for core goods outside cars, including washing machines and clothes, will ease.” [Emphasis added.]

But facts are funny things: they couldn’t care less about Dutta’s hypotheticals. Antoni pointed out to MRC that the situation on the prices side is much worse than Dutta lets on. “Housing is unaffordable in every major metro across the country except for four, and even that is only possible because of a loose definition of affordability. In multiple cities across the country, it takes more than 100% of the after-tax median income to afford a median price home,” Antoni analyzed. “Other necessities, like food, energy, and transportation, have increased much faster than the official cumulative 17% rate under the Biden administration.” 

Dutta whipped out his crystal ball again to predict that since the Federal Reserve probably won’t hike interest rates again, “the cost to borrow money — from credit cards to mortgages — will gradually decline alongside everyday expenses.” Again, Dutta is being dishonest by not telling the whole story. As Antoni noted: “Today's higher interest rates have also greatly increased borrowing costs for American families, compounding the pain of higher consumer prices.” In fact, Antoni went on, “At a time of record credit card debt, the interest rates on those cards are also at a record high. But it's not just credit cards - interest rates on everything from student loans to auto loans have increased, pushing finance charges through the roof.”

Total credit card debt spiked to a chilling record of $1.23 trillion in the third quarter of 2023, according to WalletHub. Dutta also conveniently left this data point out of his piece. 

Antoni further emphasized why Dutta’s abstract “nirvana” argument was nothing short of nonsense:

Between these higher borrowing costs and prices rising faster than wages, the typical American family has effectively lost $7,300 in annual income today compared to when Biden took office. It's even worse if you're one of the people trying to buy a home today: the monthly mortgage payment on a median price home has increased more than $1,000, costing you an extra $13,000 per year for the same house, [emphasis added].

RealClearPolitics President Tom Bevan posted an analysis by The Wall Street Journal on X to point out that the average monthly new home payment today is a whopping $3,322 compared to $1,787 when Biden first took office, further punctuating Antoni’s point. 

Even Dutta’s argument on the state of the labor market wildly missed the mark. Dutta said that the “disappointment” of the U.S. economy adding only 150,000 jobs in November and the unemployment rate ticking up to 3.9 percent was “not enough to cause a panic.” Never fear, implied Dutta, “But the job market isn't all bad news. Over the past three months, average hourly earnings for all employees have jumped 3.2% — a strong number for American workers that's broadly consistent with the Fed's long-term inflation objectives.” Dutta also claimed that “[i]t's also highly likely that the last employment report understated the growth in nonfarm payrolls since tens of thousands of workers were on strike.”

Wrong again. As Antoni pointed out, “We have somewhere between 5 and 8 million people missing from the labor force, which is artificially reducing the unemployment rate” to begin with. Even The Hill’s reporting undercuts Dutta’s analysis, noting that seven in 10 Americans are currently living paycheck-to-paycheck. What kind of “nirvana” is that, Dutta? 

Antoni concluded his takedown of Dutta’s ridiculous misdirection on the Biden economy:

At the end of the day, the numbers are what they are, and they simply don't lie. You cannot spend, borrow, and print trillions upon trillions of dollars, year after year, and not expect severe negative consequences. The Federal Reserve has never achieved a soft landing, and this time will be no different.

Conservatives are under attack. Contact Business Insider at corrections@businessinsider.com and demand it stop defending the failing record of the Biden economy.