Biden tries to advocate Bidennomics again
President Biden is state of the union address On Thursday night, he touted his administration’s economic achievements, insisting that “Bidenomics” was a success while blaming corporations for high inflation.
It will be difficult to sell to many Americans.
Over the past few months, he has been trying to get himself together, but… Declining popularity Mr. Biden has frequently emphasized to Americans the positive aspects of the U.S. economy, including a strong job market and impressive growth that has defied recession expectations.
But polls show voters’ appreciation of his leadership on economic issues has not increased. According to Gallup’s latest poll, 60.9% of Americans disapprove of the way Biden is handling the economy. The bill is split across party lines, with two out of three Democrats in favor and just 4% of Republicans, but independents overwhelmingly disapprove. Just 3 in 10 independents say they approve of Biden’s economic policies.
Americans don’t like the Biden economy
The big problem for Biden is that the public is not just dissatisfied with his leadership. They are dissatisfied with their economic situation. 57% of registered voters rate the economy as very bad or very bad, according to the latest poll from CBS News and YouGov. Less than a quarter of voters say their personal financial situation has improved in the past few years.
Biden is keen to overcome both public disapproval of his policies and dissatisfaction with the economy, as many voters say the economy will be a key factor in their vote this November. According to a CBS/YouGov poll, 82% of voters say the economy will be a major factormore than any other issue.
In most polls asking Americans who they will vote for, Biden trails his chief rival for the White House, former President Donald Trump. And Biden’s overall approval rating has fallen to 38 percent, according to Gallup.
Biden administration boasts of hollow economy
President Biden is frustrated that the public doesn’t appreciate economic issues that administration officials believe are due. However, many of the accomplishments they point to were already achieved when President Trump was president, so there is good reason for the public to hold Biden in low esteem.
Please take Unemployment rate. This has fallen to 3.7%, a low rate by historical standards. But it fell even lower under President Trump before the pandemic hit, dropping below 4% in the summer of 2018 for the first time in decades. And it wasn’t a temporary slump. In February 2020, on the eve of the pandemic shutdown, the unemployment rate was still 3.5%.
Biden is also likely to tout his administration’s policies. job creation record. Since January 2021, when Biden took office, the economy has significantly added 14.8 million jobs and grew by about 10% in January of this year. This puts him on track to match or exceed some of the best job gains in recent decades, including the booms during Bill Clinton’s first term and Ronald Reagan’s second term. ing.
However, the record is Pandemic causes historic job losses. Compared to February 2020, the number of jobs increased by only 3.5%. This lends credence to the argument that many of the jobs Biden is credited with are the result of pandemic-induced whiplash closures and recovery, rather than the result of his policies. be.
pay a high price for a high price
Although prices have fallen from the 40-year highs reached at the beginning of President Biden’s presidency, prices are still rising rapidly.of consumer price index The consumer price index (CPI), the government’s broad measure of household inflation, rose 3.1% in the 12 months to January. That’s higher than any 12-month period since 2011 and before Biden took office.
Biden is likely to claim that inflation is falling, but that is no longer true. inflation is rising again For 3 consecutive months. If inflation rises over the next 11 months as it did in January, the annual rate would rise to 3.7%.
Inflation numbers are flattering as supply chain issues are resolved, energy prices fall and businesses respond to rising prices by producing more goods. Core inflation, which excludes energy and food prices, rose at an annual rate of 4.8% in January.
Service inflation is seriously accelerating. The consumer price index for services rose 5% in the 12 months to January, almost double the typical pre-epidemic inflation rate. The monthly figure rose to 0.7% in January, bringing the annualized inflation rate to 8.7%, the worst since a year ago.
One reason Mr. Biden’s claims that inflation has fallen hasn’t caught on is that Americans are still feeling the cumulative effects of years of rapid price increases. grocery pricesFor example, last year it didn’t rise that much; Up 21% since President Biden took office. During President Trump’s first three years in office, food inflation rose by a total of only 1.4%.
The pain of inflation is even more painful. wages lag behind prices. Inflation-adjusted median weekly pay in the first quarter of 2021 was $373. As inflation soared, inflation-adjusted wages declined, bottoming out at $359 in the second quarter of 2022. It has since recovered and reached $371 in the final quarter. However, it is still lower than when Biden took office.
Biden won’t stop inflation
Given how frustrated Americans are about inflation, it’s no surprise that Biden has consistently sought to avoid responsibility for it. Recently, Biden has unleashed a blame game to brighten up business. “Price gouging.“ However, this is a term that usually refers to sudden and extreme price increases for certain goods in the face of emergency situations. Imagine a store raising the price of bottled water right before a hurricane. And it’s already illegal in many parts of the country.
Sustained and widespread price increases cannot be accurately described as “gouging.” Rather, it is simply inflation resulting from the mismatch between supply and demand.
Nor can we blame inflation on corporate greed. “Greedflation” That’s what some Democrats have come to call it. To begin with, companies did not suddenly become greedy when Mr. Biden took office. Businesses always try to maximize profits. It doesn’t say much about the pattern of inflation. Does anyone think that from the spring of 2021 he saw a spike in greed until the spring of 2023, then it started to subside last year, and then in recent months the greed has returned?
Corporate profits did increase as inflation rose, but the causal relationship is probably the opposite. When demand for goods surged during the pandemic, companies were able to raise prices even though costs had not yet increased. Pandemic shortages would have been even worse had companies not responded with higher prices. When supply fell below demand, prices rose and goods were rationed.
as peter coy new york times explained recently:
Corporate profits have increased significantly during the pandemic, in part because companies have taken advantage of shortages to raise prices. Stimulus payments to consumers also boosted corporate profits because they flowed to businesses that bought goods from consumers. But most of that is already over. “After adjusting for fiscal and monetary interventions, the movement in gross returns will be less pronounced and should return to roughly pre-pandemic levels by the end of 2022,” said Dino Palazzo, chief economist at the Washington Federal Reserve. Stated.wrote on research notes last year.
“Corporate profits did contribute to inflation in 2021, but their contribution declined in 2022,” the report said. economic news by the Federal Reserve Bank of Kansas City last year.Ann update Lead author Andrew Glover discovered last year that the change in earnings is actually subtracted from the inflation rate in the second and third quarters of 2023.
Biden advocates passing on inflation That may be one reason why he rates poorly on economic leadership. While supply constraints and global transportation problems undoubtedly helped cause inflation, most Americans know that Biden’s stimulus package and other deficit spending contributed to inflation. Hearing the president claim otherwise only damages his credibility.
Perhaps the biggest challenge to Biden’s attempt to sell Americans on Bidennomics is not only that the wounds inflicted by the inflation of the past few years are still fresh.it’s that they can remember that Things were better when Trump was president.. According to the CBS/YouGov poll, 65% of registered voters say the economy has been in fair or excellent shape under Trump.
Biden ran on a promise to restore and strengthen pre-pandemic prosperity. His popularity is declining; His second term prospects As that promise has been undermined by inflation, that promise has faded.
Convincing Americans otherwise is a difficult task, even in the State of the Union address.
