Midterm Issues Watch: The Economy
Democrats are getting acquainted with the consequences of their economic policies
To the extent that the Democratic Party has a position on economic issues during this election cycle, it was summed up last week by President Biden. He blamed inflation on (1) the Republicans, (2) V. Putin and (3) Saudi Arabia. Biden went on to claim (1) that inflation was a problem during the Trump Administration, (2) that he, Biden, ran on a promise to tame that inflation and (3) that he and his Administration are working hard to make good on that promise.
All three of these claims are false.
On the infrequent occasions when Biden emerged from his Delaware bunker during the 2020 election, he was never heard to mention inflation—this for the good reason that there was no inflation to speak of at the time. When Biden entered office in January 2021, inflation was well under 2%. Today it’s 8.3%, and there’s no relief in sight.
Though the Biden Administration has no solution for this inflationary crisis, it’s not short of excuses: the pandemic, supply chain problems, the war in Ukraine, corporate price gouging, GOP obstructionism, etc., etc. Some of these things have contributed toward high inflation, but the major contributor is absent from list: the trillions of dollars that the Administration and congressional Democrats pumped into an already recovering economy, causing it to overheat. Starting with the bipartisan infrastructure bill, some $5 trillion in government spending is sloshing around out there. Given the fact that the basic definition of inflation is too much money chasing too few goods and services, the problem we have now was predictable. And indeed, various economic experts, including Bill Clinton’s Secretary of the Treasury, Larry Summers, did predict it.
The Democrats’ misleadingly titled Inflation Reduction Act only poured more fuel on the inflationary fire. In reality it’s a mini-me version of Build Back Better—just another spending bill. President Biden has touted its drug price control provisions as a major inflation-fighting measure, which is laughable. Capping the price of insulin may or may not be a good idea, but it does nothing to relieve the pressure on millions of American families who see their purchasing power shrinking month by month.
So Democratic candidates in the upcoming midterms find themselves in the impossible position of having nothing to say about the issue of top concern to voters. They have no record of economic success, nor any credible inflation-fighting plan, on which to run. This explains their concentration on abortion, climate change, the threat to “our democracy,” and Trump. But poll after poll shows that those issues are far down the list of voters’ priorities.
Not only are things bad at the moment, but the economic outlook is dismal. At this point inflation is so far out of control that the only tool available to the Federal Reserve is monetary tightening on such a scale as to plunge the economy into a recession. Economists and business executives agree. The signs and portents of a downturn have multiplied recently. Last week was the worst for the US stock market since the pandemic collapse of March 2020. Real estate prices are in decline as demand falters. Net economic growth for 2022 is expected to be anemic 1.5%, with worse to come in 2023. Job growth, up to now a Biden Administration bragging point, is expected to falter and go into reverse, with unemployment rising to 4-5%.
Democrats can’t escape their responsibility for this economic debacle—after all, it happened on their watch. So instead they’re trying to dodge the bullet by crying that Republicans “have no plan.” But Republicans don’t need a plan. They just need to be the other guy, standing athwart the road to economic ruin and shouting “Stop!” That will suffice to flip the House of Representatives and probably the Senate to the GOP.
And recent polls suggest that the red wave, once thought to have crested and receded, is building up again. The Real Clear Politics average of generic congressional ballot polls, which once and not so long ago showed a Democratic lead, now has the GOP at +1.8. Of the top ten polls in the average, six show a GOP lead, three show a Democratic lead and one shows a tie. (Noted on passing: the Fox News poll shows a +3 advantage for the Democrats. But FNC is not to be trusted…right?)
Polling on the issue of the economy look even worse for Democrats. A poll conducted recently by The Economist and YouGov has 78% of Republicans, 41% percent of Democrats and 53% of independents agreeing that the U.S. is already in a recession. Oh, and as of today, President Biden’s approval rating is underwater in every poll, the average spread being -10.4.
Our stumblebum chief executive was spotted in Oregon over the weekend, eating an ice cream cone while assuring the American people that the country’s economy is “strong as hell.” You can’t even call that gaslighting—it’s a dispatch from some alternate reality where Joe really is the reincarnation of FDR and LBJ. But here in reality, the state of the US economy is for Biden and his party a crushing liability.