EDITORIAL: Red states power Biden’s economy

The economy President Joe Biden likes to brag about is powered by Republican states.

Economic warning signs abound. Inflation is cooling off, but it remains elevated. Our massive national debt means inflation won’t retreat permanently into the night either. Credit card debt has hit a record, nearing $1 trillion. Banks are tightening lending standards, which is likely to put a damper on future economic growth. The inversion between the yields of two- and 10-year treasuries reached a four-decade high this month. That’s perhaps the most accurate historical indicator that a recession is coming within the next two years.

But running for re-election demands economic happy talk. After all, “Vote for me, I wrecked the economy” won’t win much support. So Mr. Biden is left looking for data points to convince you things are humming along.

One such statistic is earnings, which jumped an average of 5.4 percent between the first quarters of last year and this year. Mr. Biden wants to claim credit for this improvement. But as we wrote recently, Bidenomics is just liberalism on steroids. High taxes, onerous regulations and deficit spending don’t create long-term economic growth. Just look at where the majority of that income growth is happening.

As The Wall Street Journal editorial board recently noted, wages grew by just 2.6 percent in New York and 2.9 percent in California. Democrats also control most of the other states, such as Connecticut and Rhode Island, with slow wage growth. Indiana was a red state exception.

Contrast that with Florida, which had a 9.1 percent increase, and Texas, a 7.7 percent increase. Other red states, such as North Dakota and Nebraska, also topped the list. Hawaii, a very blue state did well, with an 8 percent increase. But that’s largely attributable to tourism rebounding after prolonged coronavirus restrictions. Nevada, which is a lean blue state, saw a 9.1 percent increase in part for a similar reason.

Results by individual sectors of the economy offer an even more vivid contrast. Florida and Texas both outperformed California and New York in manufacturing, finance, information, retail and professional services. Unsurprisingly, both red states significantly outpaced their blue counterparts in construction. In debates about economic policies, the most meaningful votes are the ones people cast with their feet.

If he wants to oversee a vibrant economy, Mr. Biden should recognize that California and other blue states offer a cautionary tale to avoid, not an example to follow. Florida and Texas offer the opposite.