LARRY KUDLOW: Americans cannot afford the Biden economy

Are you better off than you were four years ago? That's the subject of tonight's riff. "Are you better off than you were four years ago" — the fellow who perhaps most famously asked this question to great effect was Ronald Reagan. Take a listen: 

RONALD REAGAN: "Next Tuesday, all of you will go to the polls, will stand there in the polling place, and make a decision. I think when you make that decision it might be well if you ask yourself: Are you better off than you were four years ago?" 

Or, maybe more to the point: were you better off during the entire Trump presidency or during the Biden term? Those questions are going to be key points in the upcoming debate between Trump and Biden on June 27, which is really just a few weeks away. 

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Virtually every poll shows that voters believe they were better off during Trump's term than Biden's. The former president runs about 20 percentage points ahead whenever this question is asked. 

One of the most basic indicators for ordinary working folks is how much income they're making, adjusted for taxes and inflation. Can they pay their bills? This is the ultimate kitchen table issue. 

You can't use GDP or other top-down macro indicators when you go to the grocery store or the gas station, or pay the electricity bill, or the phone company, or the cable man. "Take-home pay" is what Ronald Reagan called it. Here are some representative numbers. 

Real wages during the Trump years increased by nearly $6,000 for the average family. For the Biden years, that key number fell $2,000. That's a nearly $8,000 swing in favor of Trump and against Biden. Inflation under Trump rose 1.9% annually, but over 6% annually under Biden. Even worse, the level of consumer prices rose almost 20% under Biden but only increased 7% under Trump. 

During the Biden years, groceries are up 21%, gasoline up 45%, electricity up 27%, new and used cars up almost 20%, shelter and rent up over 20%. These are all killers. That's what people think about and, with Bidenflation, interest rates have soared. Mortgage rates are up over 7%, car loans running up around 10%, credit cards up 25%-30%. 

These high personal borrowing costs are also killers. Essentially, working folks cannot afford the Biden economy. That's why Trump runs 20 points ahead of him on that issue. There's another comprehensive measure called household wealth, which includes all your cash, the value of your home, your stocks and then subtract out the money you owe other people. 

There's about 135 million Americans in the stock market and home prices have risen, but it turns out household wealth rose 16% after inflation during the Trump term, but less than 1% during Biden's presidency. Another killer. We haven't exhausted everything on this subject or the debate, but Trump has a decided advantage. Folks did better while he was in the White House. 

Trump should also leverage his tax cuts into a future prosperity and optimism picture, while Biden is going to be up there all pessimistic and blaming so-called rich people — even though virtually every taxpayer benefited from the Trump tax cuts. 

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A tax cut and growth and prosperity message from Trump could be a real sleeper come the election, and I'll tell you what — of all these indicators, real income is probably the most important one for predicting the presidential election race, according to leading political scientists down through the years, and you know what else? People tend to make up their mind and lock in their decision more or less right now between early summer and Labor Day. 

By September, their minds are completely made up, even though there is still a bunch of weeks before the election. I would say, right now, advantage Mr. Trump by a sizable margin. 

This article is adapted from Larry Kudlow’s opening commentary on the June 5, 2024, edition of "Kudlow."