Voters care most about inflation. President Joe Biden seems deaf to that reality.
In March, Gallup conducted its annual survey of voter attitudes. Inflation was at the top of voters’ concerns. Concerns about crime came second among voter attitudes. And the most unprompted issue was immigration. It is no surprise, then, that the most recent opinion poll by the New York Times and Siena finds Donald Trump leading Biden in five of six battleground states where the 2024 presidential race will be decided. Biden leads Trump in Wisconsin but trails him in Pennsylvania, Michigan, Georgia, Arizona, and Nevada.
The Austrian psychoanalyst Sigmund Freud might opine that Biden wants to lose come Nov. 5.
After all, Biden’s policies, both implemented and proposed, drive inflation higher. Biden owns the inflation issue. And Tuesday’s data on producer price inflation just highlights Biden’s problem. Markets had expected a producer price index inflation rate of 0.3%, but the data say that producer inflation in April rose at 0.5%. Tariffs are part of the problem here. Tariffs on national security-related Chinese products are necessary. But at the beginning of this week, Biden announced new tariffs on China-produced respirators, face masks, and rubber medical gloves. These are all relatively low value goods, not related to national security. At the margin, inflation will increase and the public will be worse off.
That’s just the tip of the iceberg. At the end of last week, Biden proposed an inflationary housing stimulus plan which professor Tyler Cowen of George Mason University characterized as “insane.” Biden proposed that new homebuyers should receive monthly $400 handouts for two years to help defray the cost of homeownership. Nothing was said about stimulating supply; so Biden’s plan would increase demand without affecting supply, thus causing more shelter inflation, which is the critical sticking point for his current inflation battle.
Biden throws gasoline on the inflation pyre. The forgiveness of student loans is yet another economic policy error. It raises the deficit by hundreds of billions of dollars, which in turn increases interest rates and borrowing costs. The New York Times, the preeminent media outlet for progressives, acknowledges that high interest rates are hitting low-income households the hardest. Yet Biden bizarrely claims to be the defender of the working class.
The Federal Reserve Bank of New York detailed this week that household expectations about the future are turning darker because of high interest rates and inflation. “Perceptions about households’ current financial situations deteriorated with fewer respondents reporting being better off and more respondents reporting being worse off than a year ago. Year-ahead expectations also deteriorated.”
In February, professor Larry Summers co-authored a National Bureau of Economic Research paper detailing how high interest rates feed directly into low consumer confidence. It is noteworthy that on Feb. 4, 2021, Summers presciently warned that Biden’s stimulus packages were too big and would lead to inflation. He was right.
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Voters hate inflation. Older voters who rely principally on Social Security really hate inflation. Still, Biden doubles down on his inflationary policies, seemingly oblivious to the reality that high inflation hurts his reelection chances and raises the prospect of a recession as the November presidential election approaches.
Which begs the question, does Biden truly want to win in November?