Ask two of the last three one-term presidents. Both Jimmy Carter and George HW Bush suffered economies that veered out of control, with inflation surges followed by the inevitable interest-rate tightening by the Fed and recession
BRUCE WOLPE ON TICKER NEWS
Both failed at re-election. (It took an act of God – Covid – to strike down the third one-term president: Trump.)
On this most important Monday for Joe Biden – signing into law the largest investment in infrastructure in modern American history, and engaging in the most important summit of his time in office with China’s Xi Jinping – there is a raging political undercurrent: Will inflation also kill Joe Biden’s presidency?
Presidents own the economy and inflation gets everyone’s full attention.
As Politico reported last week’s data from the Bureau of Labor Statistics:
“Gasoline prices are up 49.6% … fuel oil up 59.1% … utility natural gas up 28.1% … used cars and trucks up 26.4% … beef prices are up 20.1% … pork up 14.1% … bacon up 15.4% … chicken up 8.8% … eggs up 11.6% … milk up 4.3% … apples up 6.7% … coffee up 4.7% … peanut butter up 6% … baby food up 7.9% … prices for furniture and bedding costs had their biggest jump since 1951 … prices for new cars and trucks had their biggest jump ever.”
Larry Summers, who served as Treasury Secretary under President Obama, warned in February – to vehement disagreement from the White House – that Biden’s American Rescue Plan could trigger an inflation wave:
“There is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability.”
The White House pushed back hard on Summers’ analysis.
“The risks of doing too little are far greater than the risks of going big,” one official said. Biden had to go big and go early to get liftoff for the US economy, which is now booming with growth over 5%. Jobs are up and unemployment is down. Wages are up and the job market is strong.
The general consensus among economists is that inflation pressures are not as structural as in the run-up to previous recessions: the choppiness caused by Covid and the severe supply chain disruptions are the main drivers of goods shortages and price pressures. In short, for today’s US economy it is not 1979 or 1992.
But that does not help the pocketbook and the outlook. Inflation is taking back some of the wage rises for workers.
It makes Biden an easy mark for Republican hits that Biden’s socialist reckless spending spree will inflict immense harm.
As a result, Biden’s slide in approval to the 40s, and the rise in his disapproval to over 50%, and the current mood, held by 70% of voters, that the country is on the wrong track, has all coincided with inflation’s emergence in the past four months.
The inflation wave is cresting right at the moment Biden is pressing Democrats to unite and pass his Build Back Better program: $1.7 trillion in social programs and climate investment that will lower costs for children, education, seniors, health care, and promote a decisive shift from fossil duels to renewable energy.
But even the inflation hawks believe that the infrastructure bill Biden will sign into law today and the social rebuilding program before Congress right now are right for the economy. Summers himself sees them very positively:
“I think it’s fine. The 10 years of the two spending bills together, A, are less than the one year of what they did last spring, and, B, unlike what they did last spring, are paid for by tax increases. So I don’t think that’s an inflation problem. I think a lot of it is vitally needed investments in the future of the country.”
Biden is counting on this calculus, and the proven polling appeal of all the elements of his program, to keep the Democrats united and to see this legislation through. We will know the outcome by Christmas.
Biden always plays a long game: it took him 32 years to win the presidency.
He is working to bring home what the US economy could look like next year: Delta in retreat, robust growth, the supply chain fixed, inflation ebbing, wages up, jobs growing, significant investment in infrastructure across the country, support flowing to families and their kids, health care costs lowered, clean energy blooming.
That is his bet on the American people for 2022. And he never, ever bets against them.
Bruce Wolpe is a Ticker News US political contributor. He’s a Senior Fellow at the US Studies Centre and has worked with Democrats in Congress during President Barack Obama's first term, and on the staff of Prime Minister Julia Gillard. He has also served as the former PM's chief of staff.
Spotify’s 2023 Wrapped has dropped prompting listeners to review their top artists, genres, and songs of the year.
Many are taking to social media platforms to share their listening trends with family, friends, coworkers, and even other fans on the internet.
While Apple Music, a rival platform, has its own year-end campaign—it hasn’t quite ignited the same online response.
Seth Schachner, the Managing Director at StratAmericas and a former Sony Music Executive joins Veronica Dudo to discuss. #Spotify #music #Apple #AppleMusic #SpotifyWrapped #streaming #featured #IN AMERICA TODAY
Coles and Woolworths, two of Australia’s largest supermarket chains, are about to face a Senate inquiry that aims to scrutinise their market dominance and business practices.
The inquiry’s parallels with a past New Zealand investigation highlight the growing concern over the duopoly’s impact on consumers and smaller businesses.
The Senate inquiry, set to begin next month, comes as a response to mounting public pressure and allegations of anti-competitive behavior in the grocery sector.
New Zealand example
Similar concerns led New Zealand to conduct its own inquiry into the supermarket industry back in 2019, resulting in recommendations for increased regulation and transparency.
The central question here is whether Coles and Woolworths wield too much power in the Australian market, potentially stifling competition and limiting choices for consumers.
With the New Zealand example as a cautionary tale, many are wondering if this inquiry will result in meaningful changes to the Australian grocery landscape.
Elon Musk has thrown a verbal jab at former South Carolina Governor Nikki Haley, declaring her political campaign as “dead” on X.
The unexpected comment from the Tesla and SpaceX CEO has ignited a new wave of discussion within the political sphere, leaving many wondering about the implications for Haley’s political future.
In a tweet that garnered significant attention, Musk criticized Haley’s recent policy stance, writing, “Nikki Haley’s campaign is dead on arrival if she continues to ignore the urgency of climate change.
We need leaders who prioritize the planet’s future.” The tech mogul’s remarks come as Haley, a prominent Republican figure, has been exploring the possibility of running for president in the upcoming election cycle.
Musk’s statement has reignited the debate over climate change within the Republican Party, with many conservatives emphasizing economic interests over environmental concerns.
This raises questions about whether Musk’s endorsement or critique could influence the GOP’s stance on climate issues and potentially impact the 2024 presidential race.
