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Surprise inflation jump disastrous news for Joe Biden and Democrats
By Matthew Knott
November 11, 2021 — 11.30am
Washington: Just as Joe Biden had something to celebrate, another wave of bad news came crashing down on his head.
Last week the US President, whose approval ratings have been wallowing for months, enjoyed a much-needed victory when the US House of Representatives finally passed his $US1.2 trillion infrastructure bill. The legislative process took far longer than it should have, and was far messier than it needed to be, but Biden got the result he needed.
Spending money on roads, airports, ports and bridges is popular across America’s partisan divide and is exactly the kind of moderate, mainstream policy that Biden promised to deliver in the 2020 election campaign.
President Joe Biden is aware of the danger soaring inflation poses to his presidency. Credit:
Then on Thursday (AEDT), just as Biden prepared to hit the road to sell the benefits of the infrastructure package, came the latest inflation figures from the US Bureau of Labor Statistics.
The figures showed that the US consumer price index shot up by 6.2 per cent in October compared to a year ago. This was the largest annual increase in inflation in 30 years - an ignominious milestone for any president to preside over.
The biggest increase came in energy costs, with the price of petrol jumping by almost 50 per cent year-on-year. According to the American Automobile Association, an average gallon of petrol (3.8 litres) currently costs US$3.42 - up from US$2.11 a year ago.
On the climb: petrol prices.Credit:AP
The cost of buying a used car has increased by 25 per cent from a year ago, and prices have risen significantly for everything from fast food to bacon to furniture. Prices rose to such an extent that they wiped out the significant wage gains workers have enjoyed over the past year.
This is the type of development that even the most politically disengaged voter knows and cares about, which makes it especially damaging for Biden.
The price hikes are caused by a complicated array of factors, many of which are beyond Biden’s immediate control. As the pandemic subsides, consumer demand is surging and supply chains around the world are buckling.
https://www.smh.com.au/world/europe...oint-climate-change-pact-20211111-p597wq.html
‘Existential crisis’: United States and China stun COP26 with joint climate change pact
But presidents are punished and rewarded for the state of the economy whether they deserve it or not. Just ask Jimmy Carter, who became a rare one-term president after inflation soared into double digits during his time in the White House (one of several domestic and foreign policy blunders that crashed his support).
In a flashing red warning sign for Biden, Americans are deeply unhappy about the state of the economy. An AP poll released last week found that just 35 per cent of Americans say they believe the economy is in good shape.
Remarkably, that’s lower than in December when the US unemployment rate was significantly higher and the coronavirus was raging out of control. And it’s way down from the pre-pandemic days of January 2020 when 67 per cent of Americans said they believed the economy was good.
Making things worse for Biden is that inflation, rather than the short-lived phenomenon some first predicted, appears likely to continue for many more months.
“Our baseline expectation is that supply bottlenecks and shortages will persist well into next year and elevated inflation as well,” Federal Reserve Chairman Jerome Powell told reporters this week.
Analysis
Global economy
Biden’s booming economy is far from normal, and that poses a problem
Democratic Senator Joe Manchin sounded the alarm on Twitter, saying: “From the grocery store to the gas pump, Americans know the inflation tax is real and DC can no longer ignore the economic pain Americans feel every day.”
Biden is well aware of the political peril he faces if prices continue to rise. “Inflation hurts Americans’ pocketbooks, and reversing this trend is a top priority for me,” he said in a statement following the release of the latest figures.
The President and his allies argue that his infrastructure plan will eventually bring inflation down by easing supply chain bottlenecks. But that promise is theoretical and a long way into the future while the price rises are current and tangible. The hit to Biden’s reputation as an economic manager will be hard to undo.
The Democrats’ loss of the Virginia governorship last week, as well as a shock near-loss in New Jersey, showed the perilous position Biden and his party are in ahead of next year’s midterm elections.
The Democratic base is demoralised and disengaged while Republicans are fired up to vote. Meanwhile, crucial independent voters in the political centre are grumpy and pessimistic about the state of the economy and country more broadly.
November 2022 is a long time away, but all the signs currently point towards a Republican “red wave” and a drubbing for Democrats.
And the prospect of Donald Trump returning to the White House in 2024 grows more plausible each day.
www.smh.com.au
By Matthew Knott
November 11, 2021 — 11.30am
Washington: Just as Joe Biden had something to celebrate, another wave of bad news came crashing down on his head.
Last week the US President, whose approval ratings have been wallowing for months, enjoyed a much-needed victory when the US House of Representatives finally passed his $US1.2 trillion infrastructure bill. The legislative process took far longer than it should have, and was far messier than it needed to be, but Biden got the result he needed.
Spending money on roads, airports, ports and bridges is popular across America’s partisan divide and is exactly the kind of moderate, mainstream policy that Biden promised to deliver in the 2020 election campaign.
President Joe Biden is aware of the danger soaring inflation poses to his presidency. Credit:
Then on Thursday (AEDT), just as Biden prepared to hit the road to sell the benefits of the infrastructure package, came the latest inflation figures from the US Bureau of Labor Statistics.
The figures showed that the US consumer price index shot up by 6.2 per cent in October compared to a year ago. This was the largest annual increase in inflation in 30 years - an ignominious milestone for any president to preside over.
The biggest increase came in energy costs, with the price of petrol jumping by almost 50 per cent year-on-year. According to the American Automobile Association, an average gallon of petrol (3.8 litres) currently costs US$3.42 - up from US$2.11 a year ago.
On the climb: petrol prices.Credit:AP
The cost of buying a used car has increased by 25 per cent from a year ago, and prices have risen significantly for everything from fast food to bacon to furniture. Prices rose to such an extent that they wiped out the significant wage gains workers have enjoyed over the past year.
This is the type of development that even the most politically disengaged voter knows and cares about, which makes it especially damaging for Biden.
The price hikes are caused by a complicated array of factors, many of which are beyond Biden’s immediate control. As the pandemic subsides, consumer demand is surging and supply chains around the world are buckling.
https://www.smh.com.au/world/europe...oint-climate-change-pact-20211111-p597wq.html
‘Existential crisis’: United States and China stun COP26 with joint climate change pact
But presidents are punished and rewarded for the state of the economy whether they deserve it or not. Just ask Jimmy Carter, who became a rare one-term president after inflation soared into double digits during his time in the White House (one of several domestic and foreign policy blunders that crashed his support).
In a flashing red warning sign for Biden, Americans are deeply unhappy about the state of the economy. An AP poll released last week found that just 35 per cent of Americans say they believe the economy is in good shape.
Remarkably, that’s lower than in December when the US unemployment rate was significantly higher and the coronavirus was raging out of control. And it’s way down from the pre-pandemic days of January 2020 when 67 per cent of Americans said they believed the economy was good.
Making things worse for Biden is that inflation, rather than the short-lived phenomenon some first predicted, appears likely to continue for many more months.
“Our baseline expectation is that supply bottlenecks and shortages will persist well into next year and elevated inflation as well,” Federal Reserve Chairman Jerome Powell told reporters this week.
Analysis
Global economy
Biden’s booming economy is far from normal, and that poses a problem
Democratic Senator Joe Manchin sounded the alarm on Twitter, saying: “From the grocery store to the gas pump, Americans know the inflation tax is real and DC can no longer ignore the economic pain Americans feel every day.”
Biden is well aware of the political peril he faces if prices continue to rise. “Inflation hurts Americans’ pocketbooks, and reversing this trend is a top priority for me,” he said in a statement following the release of the latest figures.
The President and his allies argue that his infrastructure plan will eventually bring inflation down by easing supply chain bottlenecks. But that promise is theoretical and a long way into the future while the price rises are current and tangible. The hit to Biden’s reputation as an economic manager will be hard to undo.
The Democrats’ loss of the Virginia governorship last week, as well as a shock near-loss in New Jersey, showed the perilous position Biden and his party are in ahead of next year’s midterm elections.
The Democratic base is demoralised and disengaged while Republicans are fired up to vote. Meanwhile, crucial independent voters in the political centre are grumpy and pessimistic about the state of the economy and country more broadly.
November 2022 is a long time away, but all the signs currently point towards a Republican “red wave” and a drubbing for Democrats.
And the prospect of Donald Trump returning to the White House in 2024 grows more plausible each day.
Surprise inflation jump disastrous news for Joe Biden and Democrats
As prices soar for gasoline and other goods across America, the prospect of Donald Trump returning to the White House in 2024 grows more plausible each day.
