Treasury Secretary Scott Bessent criticized Economist Robert Reich‘s analysis, arguing that McDonald’s Corporation (NYSE:MCD) issues are not due to structural inequality but rather competition from rivals like Burger King, whose parent company is Restaurant Brands International Inc. (NYSE:QSR).
Bessent’s post on X on Monday was a response to Reich highlighting the existence of a two-tier economy and widening income inequality in the U.S.
Bessent also took a swipe at Reich, claiming that former President Bill Clinton had "fired" him and suggesting that UC Berkeley should reconsider his position due to the quality of his economic research.
“McDonald’s problem is called Burger King, Professor. No wonder Bill Clinton fired you,” Bessent wrote.
Notably, Reich served as Secretary of Labor from 1993 to 1997 under Clinton. He left the administration at the end of Clinton’s first term, and Alexis Herman succeeded him as Labor secretary in 1997.
Reich Challenges Bessent’s C-Economy Claim
Bessent’s comments come in the wake of his recent interview on CNBC’s “Squawk Box”, where he declared that the U.S. economy is transitioning from a K-shaped divide to a C-economy, signifying a regain of ground by lower-income workers.
The K-shaped economy, a term often used to describe a widening gap between higher- and lower-income Americans, has been a contentious topic among economists and corporate leaders.
Reich rejected Bessent’s claim that the K-shaped economy is over, arguing that the U.S. economy remains divided. He cited McDonald’s, saying visits from lower- and middle-income customers fell by double digits in Q1 2025 as these consumers struggled with affordability.
Reich said higher earners remain stronger while stagnant wages and inflation continue to squeeze lower-income households, weakening consumer spending.
McDonald’s Stumbles as Burger King Gains Ground
Earlier this month, McDonald’s reported mixed second-quarter results, with earnings beating Wall Street estimates but revenue falling slightly short. U.S. comparable sales rose 0.8%, driven by higher average spending and product mix, but lower customer traffic weighed on results.
CEO Chris Kempczinski said the company was “not satisfied” with the performance, pointing to inconsistent execution and weak consumer awareness of its new under-$3 Everyday Affordable Price (EDAP) menu. McDonald’s also said reduced digital offers and the removal of its buy-one, add-one-for-$1 promotion hurt visits.
At the same time, Restaurant Brands International delivered a strong Q2, beating estimates on adjusted EPS and revenue, with comparable sales up 3.8% and system-wide sales rising 6.4% year over year. Burger King led growth, posting 8.6% comparable sales growth and 8.5% U.S. same-store sales growth.
CEO Josh Kobza credited the brand’s "Reclaim the Flame" strategy, which includes Whopper-focused marketing, restaurant upgrades, stronger operations and franchisee investments. Burger King now plans to invest up to $700 million through 2028, including $550 million under its "Royal Reset" initiative, of which $194 million had been invested as of June 30, 2026.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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