Bidenomics tanking old Uncle Joe's re-election plans

I won’t use the trite headline and James Carville quote, “It’s the economy, stupid,” but if the competitiveness of the 2024 presidential election baffles you, it’s one part Biden being the oldest president ever (Ronald Reagan left office at 77!), and one part the fact that prices shot up in 2021 and everything — gas, groceries, rent, mortgages, cars — is still expensive. 

And as the Wall Street Journal lays out this morning, those high interest rates are now really being felt by ordinary Americans, as reflected by some absolutely devastating economic statistics. 

In short, the average American can’t afford to buy a new car or a new house anymore. No one’s going to heed Democratic happy talk about the economy when that’s going on, and that’s likely one big reason so few Americans are worked up about, or even paying attention to, the latest unhinged rants from former president Donald Trump.

High Prices and Interest Rates Are Probably Going to Stink for Another Year

If Americans feel like the economy is doing well in autumn of next year, President Biden will probably win another term. If Americans do not feel like the economy is doing well in autumn of next year, then the Republican nominee, likely former president Donald Trump, will probably win. That’s the ballgame. Yes, other factors will also influence the race, but first-term presidents with roaring economies and widespread economic optimism get reelected; those without them don’t.

Keep that in mind when you see headlines like the one this morning in the Wall Street Journal, “Americans Finally Start to Feel the Sting From the Fed’s Rate Hikes.”

This morning, the staffers at the Biden campaign’s reelection headquarters in downtown Wilmington, Del., are probably buzzing about the leak to Axios about their foolproof plan to help Biden avoid tripping and falling — balance exercises and sneakers. That’s nice, but the Biden team really ought to be freaking out about the conclusions in the Journal article, because they indicate that a significant portion of Americans will still feel frustrated about the economy a year from now:

From the WSJ:

Fed officials signaled last week that they plan to keep interest rates high for quite a while. For families who don’t need to borrow, higher rates might not affect daily life too much. But for those who do, the Fed’s aggressive rate increases are really beginning to sting. “The bite is starting now,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. . . .

Buying a home or car right now is “completely unaffordable for the typical American household because you’re mixing the higher borrowing costs with the high prices,” said Mark Zandi, chief economist at Moody’s Analytics.

He estimates that the typical American household would need to use 42 weeks of income to buy a new car, as of August, up from 33 weeks three years ago. The National Association of Realtors calculates that the typical American family can’t afford to buy a median-priced home.

That’s brutal, and the sort of thing that makes for stinging Republican ads: “Buying a home or car is completely unaffordable for the typical American household.” “The typical American family can’t afford to buy a median-priced home.” And on the statistic about car purchases, notice the measuring stick of three years ago, i.e., before Biden took office.

More recent eyebrow-raising statistics:

“U.S. mortgage applications for home purchases fell to their lowest mark in 28 years.” As Business Insider summarized, “Americans haven’t been this reluctant to enter the housing market in decades.”

“For the average lender, a top tier 30-year fixed rate mortgage is now over 7.5 percent for the first time in at least 22 years.”

Not every American is looking for a new-home loan or a new-car loan. But over time, cars wear out and break down, or owners conclude the cost of upkeep and repairs means they’re overdue for a new one. Growing families want to move out of smaller houses, people find job opportunities that require a move, and older workers conclude it’s time to retire. Americans who want to buy a new house or car but can’t will perceive the economy as lousy. This doesn’t guarantee that they’ll vote against the incumbent, but it ensures a strong headwind.

Zandi’s analysis popped up in another recent article, this time in the Washington Post, talking about perceptions of inflation:

“What they see is the milk still costs as much as it did, the gas is still too expensive, and maybe it’s from the gut that they’re making this call that they’re not happy,” said Quinnipiac University pollster Tim Malloy.

It costs $734 more each month to buy the same goods and services as two years ago for households who earn the median income, according to Mark Zandi, chief economist of Moody’s Analytics.

Paying $734 more each month adds up to $8,808 more per year for the same stuff as two years ago. How many Americans have an extra $9,000 lying around? No wonder household debt and credit-card debt are climbing higher and higher.

And yet, the message from most Democrats is that voters are perceiving the economy incorrectly — that inflation is actually dead and buried and, as President Biden said in between licks of a waffle cone of Baskin Robbins chocolate-chip ice cream in October 2022, “Our economy is strong as hell.”

New York Times columnist Paul Krugman spent most of 2021 telling his readers that the threat of inflation was wildly overstated, assurances that proved less and less connected to reality as the year stretched on. The man who told you inflation wasn’t going to arrive now wants to reassure you that it’s dead and gone. In the middle of this month, Krugman tweeted, “In the past I’ve focused on a measure that excludes lagging shelter and used cars as well as food and energy. Just to note that it adds to the evidence that inflation has been largely defeated.”

Yes, as long as you exclude food, energy, shelter, and people looking to buy a used car because new-car prices hit a record high at the beginning of the year, things look great! Declarations like this might as well include, “I don’t buy the groceries in my house, or if I do, I never bother to look at the receipt.” Gotta wonder if Krugman pumps his own gas, too; the national average price for a gallon of regular unleaded gasoline in September so far is $3.95.

The conditions leading to the widespread economic pessimism are likely to stay in place for much of the year to come. There is no rescue from Federal Reserve chairman Jerome Powell on the way. Biden’s just going to have to win this election on his own natural eloquence, vigor, boundless energy, and keen intellect.

In other news, Donald Trump is still crazy. He’s still talking about executing the departing chairman of the Joint Chiefs Mark Milley for treason. He’s pledged that if he’s elected, his administration will launch government investigations of NBC for “country threatening treason.” He contends Fox News is conducting polls and then refusing to share them with the public.

He recently claimed former Florida governor Jeb Bush “got us into the Middle East.” Right after warning that President Biden is cognitively impaired, Trump said, “We would be in World War Two very quickly if we’re relying on this man.” He mixed up Biden and Obama again. He contended that liberal Jews who voted against him “voted to destroy America.” He claimed, “Pro lifers had absolutely zero status on the subject of abortion until I came along.”

He’s also ripping into Howard Stern, and emphasizing that no one listens to Stern anymore or cares what he thinks. (Except Donald Trump, apparently.)

Whether or not the American people should dismiss the crazy things Trump says, it appears they are.

Reportedly, the Biden team is telling other Democrats to stop worrying, and that the issue of abortion and Trump’s own unpopularity will assure their victory in 2024. That does not feel like a safe bet now. Maybe against a generic Democrat, Trump would be unelectable. But a generic Democrat wouldn’t be turning 82 shortly after Election Day, could give a speech without a teleprompter, and wouldn’t constantly be saying weird things about just following the orders of his staff, could appear in public before 10 a.m. and after 4 p.m., and wouldn’t have a gun-toting, tax-evading, indicted son who manages to undermine all of his father’s policies.

The American public isn’t even all that bothered by the launch of an impeachment inquiry. Americans do not feel all that fondly about Joe Biden right now. The Democrats are counting on long-term antipathy to Donald Trump to put Biden over the top, which looks like an astoundingly reckless strategy right now. We hear a lot from Democrats and their allies about how the future of democracy is at stake in this election. If the future of democracy is at stake, wouldn’t you want to place your bets on somebody a little younger and more energetic? Pinning all your hopes on Biden right now is the equivalent of effectively betting your life’s savings and next month’s rent and grocery money on a horse one step away from the glue factory. That’s why David Ignatius and Maureen Dowd are writing columns saying Biden shouldn’t run again. They know Biden could blow it.

Maybe, if and when Trump is the 2024 GOP nominee, his ranting and raving will get more media attention, and Americans will be reminded of why they don’t like him, and why they voted for the other guy in 2024. Despite what Trump’s fan base fervently believes, most Americans don’t like Trump. His favorable rating, week in and week out, is in the high 30s and low 40s. His unfavorable rating, week in and week out, is in the mid to high 50s.

But a lot of Americans have fond memories of that pre-Covid American economy.

Post a Comment

Previous Post Next Post