The US economy was supposed to help President Joe Biden and the Democrats, but lately it has hurt them with the voters.
WASHINGTON (AP) – The US economy was supposed to help President Joe Biden and the Democrats, but lately it has hurt them with the voters.
Biden on Friday praised the U.S. economy for doing better than the rest of the world, saying it is largely because of his $ 1.9 trillion corona aid package and plans for additional spending of about $ 2.75 trillion for infrastructure, families, schools, health care and climate change.
Yet Americans have become pessimistic about the economy as inflation has persisted. On Tuesday, voters in Virginia rewarded Republican Glenn Youngkin with a victory in the gubernatorial election based in part on a belief that he would be better for economic growth. The president could not ignore these realities, yet he said Friday in the White House that the latest figures show a harsh energy economy.
“We still have to tackle the costs that American families face, but this improvement is faster, stronger and more equitable and broader than almost anyone could have predicted,” Biden said. “That’s what the numbers say.”
The president also acknowledged that voters can not just trust the numbers – they must “feel it in their lives and their bank accounts and their hopes and expectations.”
This question of whether Americans feel what the economic numbers show is at the heart of Biden’s challenge in the months leading up to the 2022 election, when control of Parliament and the Senate could possibly slip from the Democrats. It is not enough for the president to highlight Friday’s employment report with 531,000 job growth and an unemployment report of 4.6% in October, as long as the pandemic rages and shortages of basic goods from cars to furniture continue to push up prices.
Underlying this challenge lies a deeper set of questions about how politics and economics mingle after the pandemic. Are Americans more interested in job growth or inflation? Are they skeptical that public spending can permanently improve the economy for the better? Can Democrats expect to be rewarded for their results, or do voters care about political results?
These issues also posed an obstacle when the House Democrats on Friday finally approved Biden’s $ 1 trillion infrastructure deal, which had already been approved by the Senate. The House was preparing later Friday to move forward with a mix of $ 1.75 trillion in social spending and similar increases.
After attending the UN climate summit, Biden suggested at a Tuesday news conference in Glasgow, Scotland, that failure to approve his agenda in the past would have no bearing on how Democrats fared in the 2021 election.
“I have not seen any evidence that whether I do well or badly, whether I have adopted my agenda or not, it will have any real impact on winning or losing,” the president said. “Even if we had passed my agenda, I would not claim, ‘We won because Biden’s agenda passed.'”
Economists across the ideological spectrum noted that the country is facing an unusual situation after coronavirus. The Delta variant appears to have hampered growth late in the summer, and the cash flow from the government caused consumer and business demand to rise in ways not seen in recent recovery.
As a result, some reliable indicators of the economy have become less reliable. Yes, there has been a solid recovery in employment, yet so many people have stopped working or applying for jobs that the adjusted unemployment rate is closer to 7.3% instead of 4.6%, said Heidi Shierholz, chairman for the Liberal Economic Policy Institute and a former chief economist at the Ministry of Labor.
“We’re still in a big hole,” Shierholz said. “Getting out of the COVID recession has created some unique circumstances that people have never experienced before.”
This created a Dickens-like setting where it could be the best of times and the worst of times. The economy is poised for the fastest growth since 1984, and the Dow Jones industrial average hit record highs this week. Nevertheless, inflation is high at an annual rate of 5.4% and erodes payslips. Employers are struggling to find labor despite wage increases. Container ships are stuck waiting to dock in ports, creating empty shelves and long delays for consumers ahead of the Christmas shopping season.
“Inflation is surpassing wage increases, and that’s a big problem,” said Michael Strain, director of economic policy studies at the center-right American Enterprise Institute. “It feels like the economy has gotten worse.”
Average gasoline prices have risen more than 60% from a year ago to $ 3.42 per gallon. gallon, according to the American Automobile Association. The leap has been so rapid that last week Biden urged OPEC countries to pump more oil, although at the same time he called for moving away from fossil fuels to have a zero-emission economy by 2050.
Voters so far seem to believe the economy would do better under Republicans.
At Tuesday’s election in Virginia, more than a third of voters said the economy was their top priority, according to AP VoteCast. Of this key group, 63% broke for Youngkin in the belief that a Republican could do more for growth.
More importantly, 54% of Virginia voters said they disapproved of how Biden handled the economy. This is almost equivalent to a recent AP-NORC survey, in which 58% nationwide disliked the president’s financial management, a sharp turn from March, when 60% supported Biden on the economy.
Republican lawmakers have been effective in hammering Biden and Democrats into the inflation issue. The Biden administration initially tried to minimize inflation as a problem by calling it temporary, but the consensus of many economists is that it will continue to run above the Federal Reserve’s 2% target until the second half of next year.
Senate Republican leader Mitch McConnell interpreted the results of Tuesday’s election as a rejection of Biden’s economic policy.
“The Washington Democrats have raised inflation, re-established welfare without labor demands, and made America significantly less energy-dependent,” the Kentucky senator said in a speech on Wednesday. “The American people will not stand for this. The voters told the Democrats last night.”
There is also a possibility that Biden misunderstood what voters said at last year’s election. Much of the president’s ability to create a broader coalition came from opposition to Donald Trump, rather than a full embrace of his ideas. Paul Winfree, director of economic policy studies at the Conservative Heritage Foundation, interprets Biden’s disapproval as a sign that voters see his widening of public spending as going too far to the left.
“The 2020 election was a referendum on Trump as an individual more than anything else,” Winfree said. “Now we see voters say the Democrats have misidentified their mandate.”
Stuart Stevens, co-founder of the Lincoln Project, a conservative group strongly opposed to Trump, said Biden has struggled to communicate his successes with the economy. He noted that many Americans believe the country is on the wrong track, even though vaccinations have risen, the stock market is rising and unemployment is falling.
Stevens concluded Friday on Twitter: “The Democratic Party has a huge messaging problem.”
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