The readers of Swamp Notes You know that I am an admirer of most of President Joe Biden’s economic policies; However, there is little doubt that they still do not resonate politically. As noted by the Democratic pollster Stanley Greenberg last week on the pages of Financial Timesthe crisis of Cost of living means that the effect of job growth under the current government is clouded by food and energy prices.
In fact, 64 percent of voters states that the inflation and the cost of living are their main concerns, according to the Greenberg survey. So the fact that this administration orchestrated a near-perfect soft landing doesn’t really matter, because people just aren’t feeling it.
Beyond that, I think one of the problems of Bidenomy is your time horizon, which is measured in years, not months. The White House passed laws that are designed to be long-term (historic fiscal stimulus vs. tax cuts). It is difficult to go on CNN, and in just three minutes, convey the fact that this administration is trying to orchestrate a paradigm shift away from half a century of trickle-down economics and the Washington Consensus, as it creates an economy based on growth in income and not in asset prices. They are big and complex themes, not clichés, and they do not resonate at the kitchen table.
Finally, I think that The term Bidenomy is itself too partisan: If you don’t like the president, you turn your back on him from the beginning. They can also be too negative. Much of Bidenomy’s message is to point out what hasn’t worked, such as the markets-know-what approach or failed antitrust policies that lead to price gouging by companies; However, those things do not invite voters to participate. Once again, they are too broad a picture and do not present an optimistic and shared vision.
I think the time has come to rethink Bidenomics (the message, not the policies). For starters, inflation is coming down, so the biggest obstacle to a more positive view of the president’s economic performance is fading. The US Federal Reserve aims to make three interest rate cuts in 2024, even as labor markets remain fairly strong according to its forecasts. This means we may see a Goldilocks environment in which asset prices remain high even as inflation declines. Fingers crossed, though, as I explain in my column today, next year’s economic outlook will be much less binary, with more nuance and unpredictability, than most participants seem to think. This is because the Covid-19 pandemic, global supply chain de-risking, and long-term interest rate arbitrage playing out in the consumer and corporate sectors are breaking old market patterns. .
Greenberg argues rightly so the president must abandon Bidenomics as a term, but what should its economic approach be called? And how should the message be sent? Victor Hwang, a venture capitalist who started an entrepreneurship advocacy group called Right to Start, has some interesting thoughts on this topic.
Hwang He has been consulting with politicians on both sides of the aisle in several states, as well as surveying voters and entrepreneurs, and his opinion is that they believe the American dream is no longer within their reach. People feel that both the government and big business are hindering their ability to get ahead. Yes, there are many farmers whose profits are eroded by big middlemen, and pharmaceutical markups can make life-saving medicines unaffordable. These are all topics of debate Biden.
But Hwang has spoken to Latino food cart operators who have to wait more than a year to obtain state permits to start a business. Government bureaucracy is also a big problem in more strategic fields; See my colleague Brooke Masters’ column about how the clean energy transition can’t happen if companies can’t get permits to do so. There is also a lot to be said about how poorly regulated real estate markets make it difficult for people to move to places where there is opportunity.
So what will happen if the president of the United States talked less about problems and more about opportunities, about how he is creating a level playing field for people to rise and how he is breaking down corporate and government barriers to the American dream? You can even turn the immigration story on its head and focus on reducing inflation: you can talk about ensuring that immigrants have access to work, rather than focusing only on the human rights aspect of migration, to alleviate the pressure points in labor markets that will reduce costs for ordinary people.
Maybe I’m being Panglossian, but I can’t believe there isn’t a way to create a winning message that talks about what the right economic policies actually are. Ed, what do you think? Do you have any ideas on a better slogan to replace Bidenomy? I encourage readers to reflect on this over the holidays and send their opinions as well, as Swamp Notes He will take a few days off and return in 2024.
-I was reflecting on a very interesting cover article in Foreign Affairs, by Fareed Zakaria, which argues that the United States became unnecessarily insecure about the world it created. Although I don’t agree with all of his points, I like the author’s optimism and think it’s true that we Americans are inclined to be more critical of our own perspectives than we need to be (or, in many cases, than we need to be). who are foreigners).
-The New York Times had a really good historical perspective on the wars going on in Gaza and Ukraine in the context of colonialism which, of course, is being trotted out to explain both events. The always level-headed foreign affairs correspondent Roger Cohen gives us the Cliff Notes history of colonialism and how various global interest groups view themselves through this lens. A good background to better understand the protests on US campuses over Gaza, and the resulting concern about anti-Semitism in some quarters.
-Magazine Bloomberg hits the nail on the head when analyzing the war of the red states against the blue cities. Imposing conservative state legislative policies on progressive cities may derail knowledge worker migration (who tend to be progressive) to places like Tennessee or the Carolinas.
-Don’t miss the report John LeCarré within Financial Times about chinese spies who recruit a far-right politician in Belgium as an intelligence asset. This is a joint project carried out with Der Spiegel and Le Mondeand where much is shown about how Chinese intelligence operations have grown in the West.
Edward Luce responds
Rana, I don’t have much to add to what I said before about Bidenomy. I don’t think it’s a message problem. Regardless of who’s to blame—mainly a virus from a Wuhan wet market in my opinion—average household income has barely recovered to the level it was at in 2019. So it should come as no surprise that voters aren’t feeling especially encouraged with their finances.
The call of Jerome Powell, president of the United States Federal Reserve, The peak of the interest rate cycle last week was the best news ever Joe Biden in months. If rates fall fast enough in early 2024 and voters get the sense that monetary expansion will continue, it is likely that the US president can see his poll numbers improve; However, it will be very close.
There is typically a two-quarter lag between an economic event and a change in voter sentiment. That means Biden needs good economic news before June. Powell and his Federal Reserve board will have a big impact on what happens next November.
And now a few words from our readers Swamp Notes.
In response to: “Surely President Joe Biden’s ‘sentimentalism’ has a cold view of the vote margins in key states. “Despite comments about young people’s differences in attitude toward Israel, it would be a brave politician in the United States to challenge the lobby group in a presidential election year.” Hugh Williams.