Biden’s (and his voters’) economic dementia

Jim Geraghty:

At this point, President Biden and his top staff want his reelection campaign to focus on two broad themes. The first, discussed earlier this week, is to turn the election into a referendum on Donald Trump and tie every other GOP candidate on the ballot to “mega-MAGA Republicans.” The second, which seems like a riskier bet, is to tout the success of “Bidenomics” and the president’s economic record.

The first problem is that most Americans don’t feel good about the economy and don’t feel good about how Biden is handling economic issues. As a CNBC headline put it, “The White House plan to sell Bidenomics: Hit the road, ignore the polls.”

Back in February, Gallup found that just 35 percent of Americans say they are better off now than they were a year ago, while 50 percent say they are worse off than a year ago. The organization noted that, “since Gallup first asked this question in 1976, it has been rare for half or more of Americans to say they are worse off.” In fact, “the only other times this occurred was during the Great Recession era in 2008 and 2009.”

Things haven’t changed much in the past few months. Yesterday, CNBC unveiled a new poll that found just 37 percent of Americans approve of how Biden is handling the economy, while 58 percent disapprove:

The survey showed small gains in Americans’ views on the economy, though to levels that remain depressed. The percentage of Americans saying the economy is excellent or good rose 6 points to a still-low 20 percent. The percentage saying the economy is just fair or poor declined 6 points to a still-high 79 percent. Just 24 percent of the public believes the economy will improve in the next year, a relatively low mark for the survey but up 6 points compared with April and the percentage expecting the economy to get worse fell 10 points to 43 percent.

On paper, the current U.S. inflation rate is 3 percent year-over-year, a significant decline from the 9 percent of June 2022 and much closer to the U.S. Federal Reserve’s target rate of 2 percent. But judging from the survey responses, Americans are still feeling the effects of the explosion in prices from early 2021 to this past spring. Remember, for most goods, prices haven’t gone down to the pre-inflation “normal,” they’ve just stopped increasing so dramatically. That CNBC survey found:

Inflation was named the number one issue by 30 percent of respondents. That’s more than double any of the other areas of concern, which include threats to democracy, immigration and border security, health care and crime.

And Americans believe Republicans have better policies than Democrats to handle the key economic issues, often by substantial margins. Republicans lead Democrats by double digits when asked which party would do a better job on the economy, inflation and improving the respondent’s personal financial situation. They lead by single digits when it comes to jobs and keeping energy costs down.

This is not what Democrats or fans of the Biden administration want to see. You don’t have to look far to find economists and economic columnists asking some version of the question, “The economy is doing really well, so why are Americans so glum?”

Last week, Neil Irwin of Axios contended that when Americans answer pollsters’ questions about the economy, they’re really offering their opinion of the president. “Polling about the economy is extremely polarized. A survey question along the lines of, ‘Do you think economic conditions are good or bad?’ is answered more along the lines of, ‘Do you like the current president or not?’” Irwin argued that “attitudes about the economy and President Biden’s approval ratings are both being driven by bad vibes shaped by the pandemic’s scars.”

I’m not convinced that’s the case, at least not for all polls. In April of this year, Gallup found that just 10 percent of Republicans and Republican-leaning voters rated the economy “excellent” or “good.” If a refusal to give the economy one of those ratings is the same as saying “I don’t like Biden,” then yes, that’s what we would expect to find. But among independents, just 19 percent rated the economy “excellent” or “good,” and among Democrats and Democratic-leaning voters . . . just 28 percent did so. Are we to believe that 72 percent of Democrats wanted to register their hostility to Biden in that survey?

In that same Gallup survey, Biden’s job approval among all voters was a lousy 37 percent, but among Democrats and Democratic leaners, 35 percent said they approved strongly of the job Biden was doing, and another 32 percent said they approved but not so strongly, adding up to 67 percent. To me, the much simpler explanation is that a decent number of Democrats out there approve of the job Biden is doing and give him the benefit of the doubt but also perceive the nation’s economic performance as from fair to poor.

Apparently, inside the White House, the view is that because of polarization, Biden’s current subpar job-approval numbers are about as good as it gets. (If you can’t reach your goal, lower your standards.)

Shortly before he left the White House, Ron Klain, Biden’s former chief of staff, told the New Yorker that Biden was polling well for this era:

I think we’re at a time where the public is just very hard on leaders. Joe Biden’s approval rating is forty-three, or whatever it is. It’s the highest approval rating of any leader in the G7, other than the new Prime Minister of Italy. A lot higher than Macron, a lot higher than Scholz.

So I just think that this is a giant conversation, that we’re just at a place where, in democracies, we’re going to find that forty-three or forty-four will turn out to be a very high approval rating, just because people are polarized: The people on the other side are never going to say you’re doing a good job, and for the people in the middle it’s just easier to say, “Eh.”

Except Biden debuted with a 54 percent approval rating, and he remained above 50 percent for roughly his first six months in office, until the Afghanistan-withdrawal debacle. It’s a slightly different measuring stick, but plenty of senators and governors enjoy job-approval ratings in the high 50s or low 60s. Yes, Mr. Klain, “the public is just very hard on leaders” … who are doing a lousy job.

After a lengthy bout of inflation, the highest in 40 years, it’s no surprise that Americans aren’t that impressed by a low unemployment rate or a booming stock market. Nor is it irrational for them to feel economic anxiety.

Today, Joseph Sullivan writes here at National Review,

economists and historians often look at real wages — wages adjusted for inflation. And by one measure of real wages, judged by his first two years in office, Biden is the worst president for America’s middle class in the last 40 years. . . . If you’re working like you used to, but your paycheck buys less than it used to, the mystery would be if you didn’t feel like the economy was in trouble.

From 2017 to 2019, Sullivan served as the special adviser to the chairman of the White House Council of Economic Advisers and as a staff economist. Perhaps some readers out there are scoffing, “Eh, he worked for Trump, of course his analysis is that the economy under Biden is bad.” I would point those readers to the folks at Jacobin, full-on left-wing socialists, who are raging against certain pundits for insisting the economy is doing great. Their headline declares: “Americans Feel Negative About Biden’s Economy Because There’s a Lot to Feel Negative About.”

Obviously, the solutions offered over at that socialist publication are completely different from what you’ll find here. But the Jacobin people do have a valid point when they observe that much of this debate features multimillionaires insisting to those with modest five-figure incomes that the economy is thriving and that the latter’s perceptions of financial hardship are irrational. “Well-paid commentators on cable news and legacy papers, after all, know what’s going on with your financial situation better than you do,” Jacobin scoffs.

I would point out that if you’re regularly saying, “Wow, that’s expensive,” at the cash register, you’re just not going to feel good. Even if you recently got a raise, you’re seeing that influx of extra cash get eaten up in every purchase.

Mortgage rates are really high by the standards of the past four decades. Car prices are extremely high by historical standards. Gasoline prices aren’t as high as the exorbitant prices of last summer, but they’re still high by historical standards. Air travel is much more expensive than before the pandemic. And it’s not just your imagination: Screens asking if you want to tip are indeed much more ubiquitous than a few years ago. …

This is not to say that everything is bad about the economy. The present long bout of high inflation would have been much more painful if unemployment was high.

But “Bidenomics” mostly consisted of dumping trillions of dollars of new spending into an economy that was already recovering from the effects of the pandemic, creating a situation in which far too much money was chasing far too few goods. The stimulus, or “American Rescue Plan,” threw in $1.9 trillion alone, and that burst of spending was calculated to have added about three percentage points to the inflation rate in 2021. In response to warnings, Biden insisted, “There’s nobody suggesting there’s unchecked inflation on the way — no serious economist.”

How much more of this do you want, America?

Biden’s (and his voters’) economic dementia

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