As rising interest rates become the highest inflation in decades and weigh on the public’s wallets, President Joe Biden and his team are pioneering a novel response: telling voters with less than two months to go before the midterm elections that all is pretty good.
“The inflation rate was barely an inch month-to-month,” Biden said when asked about the annual inflation rate of 8.3% and what he could “do better and faster” to bring down grocery bills.
“This is one of the strongest jobs markets we’ve seen,” White House press secretary Karine Jean-Pierre told reporters on Friday when asked about falling stock markets.
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“So given the encouraging early signs we’ve seen on inflation and continued strength in jobs growth, we believe the transition remains possible,” she said when asked about the Federal Reserve’s projections that the economy will grow. just 0.2% for the full year and then 1.2% for the next year.”
First, inflation should be temporary. Now the entire economy is in upheaval.
Given the low unemployment rates seen under Biden since the COVID-19 store closures ended and under former President Donald Trump before they even started, there’s probably some truth to the argument that the natural state of the economy in the In general and the labor market is particularly strong when neither a virus nor bad government policies screw it up.
But we keep ending up with these two factors disrupting economic growth, which is why the RealClearPolitics The poll average shows that just 38.7% approve of Biden’s leadership in this area, compared to 57.9% who disagree. Biden’s economic approval rating is worse than his overall approval rating.
Inflation is the economic issue troubling Biden and his party most in the run-up to November. Their persistence, despite repeated assurances from the White House that consumer price inflation would soon run its course, has forced the Federal Reserve to raise interest rates particularly aggressively. These moves will certainly slow the economy, which has already experienced two quarters of negative growth, and could lead to a recession.
The White House is publicly so confident that there won’t be a recession like they were that inflation would be temporary. Whether that inspires much confidence in anyone else remains to be seen. Markets, majorities in most economic surveys, and even larger majorities when it comes to the country’s direction, appear unconvinced.
Inflation is much higher than when Biden took office, the stock market is slightly lower and real wages have barely moved. Because of this, polls showed that the public was attacking the economy long before a recession seemed likely.
Biden and his proxies have understandably focused on low unemployment as gas and food prices soared. But a recession would hurt jobs – unemployment rose to 10.8% when inflation last stopped in 1982 – and risked re-acquainting voters with terms like stagflation and the poverty index.
While some of the worst post-inflation hangovers came under President Ronald Reagan, who teamed up with Federal Reserve Chairman Paul Volcker to stabilize monetary growth and eliminate stagflation, next time Biden goes to Georgia (maybe around to campaign for the Democratic gubernatorial nomination Stacey). Abrams), he should stop by to ask former President Jimmy Carter for a refresher course on what these economic phenomena have done to the Democrats’ electoral prospects.
All presidents extol positive economic numbers and downplay negative ones. Trump certainly did. But when a president attempts to paint a picture of the economy that ordinary voters and consumers fail to see, it can quickly become untenable.
Ask former Vice President Dan Quayle how it worked for Republicans to invoke the National Bureau of Economic Research’s conclusion that the 1990-91 recession was over by the time of the 1992 election.
Then again, why are Carter and Quayle asking? Biden lived through this whole story.
But he seems doomed to repeat it. As the general public witnesses some of the highest prices they have endured in 40 years, Biden speaks of tariffs and “zero” inflation. An unfamiliar supermarket scanner or an odd fixation on raw materials isn’t the only way to appear out of touch.
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Biden could get lucky, as he once thought he could with inflation, when gas prices started falling steadily. A recession is not inevitable. Trust the transition.
Unfortunately, when the White House talks about soft landings while the Federal Reserve Chairman uses the word “pain,” that’s not always the right way to bet.