Joe Biden’s re-election campaign is in deep trouble. Everyone knows it because more than 64% of Americans name high prices as their number one concern.
Not jobs. Not climate. Not economic growth, higher wages, or lower interest rates.
Americans are not only worried about rising prices; they’re angry that prices are as high as they are now. Further, only 23% of voters think Biden’s top concern is prices while 49% say that prices are Trump’s top concern.
High prices are not going to come down. The rate of inflation may have slowed but the price we pay for everyday commodities — with a few exceptions — are stuck in an elevated position. And with real wages failing to match the increase in prices, Americans are losing ground in the battle to keep the household budget in balance.
In other words, the only way Joe Biden can win in 2024 is if he’s somehow able to lower prices back to where they were in 2020. That’s not going to happen.
It’s kind of pointless to argue about how people should feel about the economy. If people are unhappy about the price level, they’re unhappy about the price level and that’s a political reality. But when we look in the past and we look around the world, we see that there have been times when voters have been angry about inflation, and those times have eventually ended with voters developing more positive views about the economy; very rarely has the price level actually fallen en route toward that improved public sentiment. My expectation is that will happen again: the price level will not fall, and public sentiment about the economy will improve anyway — not necessarily during Biden’s presidency, but at some point.
Barro also points out that the inflation rate coming down and then going up creates a feeling of chaos and uncertainty about the future. Anxiety about the economy is the toughest political current to row against and it’s doubtful that Biden has the skill to maneuver through it.
It’s a particularly tough sell for Biden to get voters to think he cares about inflation when he spent the first two years of his presidency spending $5.5 trillion to reward his campaign backers, stimulate the economy, and “fight inflation” — an inflation he created.
He did this even going into 2022, when inflation was on the rise and higher government spending was becoming more and more inappropriate for the macroeconomic conditions. Even now, Biden continues to tout the stimulative effect of government spending even though the economy is overstimulated — for example, last month, when announcing more student loan forgiveness, he said it would improve the economy by helping borrowers go out and spend on things like homes — which is the same thing as saying that loan forgiveness creates inflationary pressure.
I don’t think most voters have a fine-grained understanding of how fiscal policy affects inflation rates. But I think they do draw an inference that, when the government goes out and spends a lot of money, that tends to raise inflation — an inference that is, in current economic conditions, correct.
Biden isn’t going to make economic conditions much better. His goal is not to have the economy be a drag on his campaign for re-election. That and abortion will put him over the top in the few swing states Biden needs to win.
If he can convince enough voters he cares about prices at least as much as Trump.