The state of the US economy is a main concern for voters as midterm election day Nov. 8 approaches, and polls suggest many don’t rate the performance of president Joe Biden and his Democratic Party very highly on that front.
In a term marred by 40-year-high inflation, Biden has boasted about his policies to curb the rising cost of living and the 10 million jobs he’s created since the beginning of his term. However, in the run up to the elections for Congress, Republicans are selling the “Biden recession” narrative, and voters seem to be buying it. In a CNN survey, 78% of respondents called the country’s economic conditions “poor” or “very poor,” and Biden’s handling of the economy had a lower approval rate (32% on inflation, 36% on the economy) than his overall record (44%).
There’s several factors that have influenced the country’s economic performance—Russia’s war in Ukraine, the pandemic, and some businesses using inflation as an excuse to hike prices while they’re raking in profits—but disgruntled citizens who see their purchasing power weakening understandably seek to hold someone accountable, and the country’s leader is an obvious scapegoat.
Charted: The economy ranks ahead of crime, abortion, and health care as top concern on midterm election day
What has Biden done about the economy?
A White House report the government claims the administration has contributed to “the strongest and most equitable” economic and labor market recovery in modern history, catalyzed a resurgence in public investment that will help ensure a “strong, innovative, clean energy future that is made in America,” and boosted small businesses activity.
When Biden took office in January 2021, the unemployment rate was above 6%, and now it’s at a much lower 3.5%. The first year of his presidency was among the fastest for job creation and unemployment reduction in history.
Biden’s 2022 Inflation Reduction Act (IRA) aimed at making taxation fairer as well as lowering healthcare and energy costs, including subsidies for electric vehicles that already have domestic and foreign manufacturers lining up to make batteries and cars in America.
But inflation has yet to go down, and remains a massive black spot overshadowing other achievements.
The consumer price index overall and across categories has ballooned, according to David Winston, the president of Washington DC-based strategy and message design firm The Winston, and columnist for Capitol Hill news site Roll Call.
Biden’s American Rescue Plan Act (ARPA) of 2021—the covid-19 stimulus package—allocated $1.9 trillion of spending over 10 years, boosting the economy, and therefore an inflationary threat.
But it likely had a “small and transitory” effect on inflation. Even without ARPA, the energy and supply chain crises, covid’s disruption to labor markets, and past government spending would’ve driven prices up, according to liberal and conservative economists surveyed by Politifact.
Plus, the Federal Reserve was slow to make its decisions. It may have waited too long to lift rates and ease the upward pressure on prices. Even though the central bank acts independently from government, its decisions affect the perception of the presidency’s strength and success.
What would happen to inflation and the US economy with Republicans in power?
Historical trends and current polling both point to a Republican takeover of both the House of Representatives and the Senate. If that happens, issues that are top-of-agenda for Democrats, such as abortion rights, gun control, voting rights, climate change, and healthcare reform, will likely be placed on the back burner.
A Reuters/Ipsos poll show more voters trust Republicans than Democrats in tackling the economy. Even Biden’s more popular policies have turned out to be double-edged swords. For instance, his generous unemployment benefits during covid-19 didn’t go down with people working lower-paid jobs without raises and bonuses. The student loan forgiveness program didn’t alleviate the debt burden for millions who didn’t qualify for it.
But for all the criticism Republicans have thrown Biden’s way, they haven’t explicitly laid out plans to combat inflation. In fact, there’s a chance some Republican policies could drive prices further up. The party, which has already blocked Biden from capping insulin prices and expanding childcare subsidies, plans to repeal a bunch of Biden-backed laws. Among other things, they want to cut down social security and Medicare.
There isn’t a fuel shortage, but stats distortion fanned fears
In the past week, some commentators stoked fears that the US would run out of fuel in 25 days. That’s a distortion of the statistics reported by the Energy Information Administration (EIA), which measures the current US stockpile of fuel as being able to last 25 days.
That inventory is lower than usual because of a shrinking fleet of domestic refineries and trouble moving the precious fuels around the country. In a comfortable and liquid market, it’s closer to 35-40 days. However, while prices will rise because of lower stockpiles, the narrative that America is running out of diesel is simply not true. That would only happen if US refineries came to a total halt and the country stopped all imports from other countries.
The uproar goes to show how some issues, like gas prices, dominate the conversation about the state of the economy more than others such as GDP rise or wage increases, contributing to a pessimistic view of the economy.
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