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As we reported four days ago (5/24/24), Americans are confused about the state of their own economy. That is understandable, given the barrage of numbers and analysis that come with most economic reports. Bu it is alarming in an election year where President Joe Biden intends to keep us on the road of democracy, which has proven effective and resilient for roughly 250 years. Meanwhile, Republican Donald Trump seems hell-bent on taking us down the road to authoritarian rule, which could upend our society and global stability for decades to come.
Here is one example of economic confusion: A recent poll showed more than half of respondents think we are in a recession, even though we aren't. Similar misconceptions seem to be clouding Americans' judgments about inflation. But here is an assessment from Axios that should raise concerns across the fruited plain. Some experts see an "inflation bomb" in our future under possible Trump stewardship:
"President Biden's top economic priorities are fighting inflation and lowering costs for the American people," writes White House deputy press secretary Andrew Bates. "Standing up to corporate price gouging is at the core of that fight. . . . "
- The administration has struggled with its messaging around inflation — they know it's making Americans feel bad, and that there's not much they can do about it before the election, as Axios' Hans Nichols wrote recently.
- They argue inflation would get worse under Trump — "top economists warn that MAGAnomics would set off an 'Inflation bomb,'" Bates writes.
In a pair of recent articles at Axios, Felix Salmon and Emily Peck seek to provide clarity on an inherently unclear subject:
* Under the headline "'Inflation' doesn't mean what it used to," Salmon explains the realities behind perceptions about inflation Here re some takeaway numbers:
(1) Inflation, at least as officially measured by the Bureau of Labor Statistics, has come down sharply from its peak of 9% in mid-2022. It now stands at 3.4%, broadly in line with where it was for the quarter-century between 1983 and 2008;
(2) Salmon includes a chart titled "Change in Consumer Price Index (CPI), as measured by normal people and economists (You can view the chart here.) The orange line shows a steady decline in CPI, starting in July 2022 and ending with the current figure, from January 2024, of 3.4.%. The purple line, showing CPI as measured by "normal people," starts an upward climb in January 2021 and now stands at 19.3%.
What are we to take from all of this? First, I sense a strong anti-Biden bias among "normal people" in their measure of CPI referenced above. I can't help but notice that, according to the way "normal people" measure CPI, prices started rising in Jan. 2021, almost the moment Biden took office. I see nothing but bias that can explain this, especially when you consider that this "normal people " measure really is no measure at all; they are just guessing. And in their minds, the rise in consumer prices is drastically higher than the conclusions by professionals who measure economic indicators for a living. In other words, there is a massive disconnect between the "guessers" and the "professionals." And this is not the only example that suggests poll respondents are clueless about events that should be well-known by most any semi-intelligent citizen. We will have more stunning news on that subject in an upcoming post.
The bottom line? A disturbing number of Americans are determined not to give Biden credit for operating a steady ship on the economy. In a post titled "Biden's latest push to take control of the inflation narrative, Axios' Emily Peck discusses the anti-Biden bias, noting that a reliance on Trump to run a steady economy likely will end in disaster for many everyday Americans. Peck writes:
The Biden administration released a memo to its allies outlining its actions to combat rising costs — and blaming Republicans for blocking its efforts.
Why it matters: It's an attempt to tell Americans that the White House is focused on bringing prices down at a time when voters are unhappy with the economy, and hold the president responsible for inflation.
- "President Biden's top economic priorities are fighting inflation and lowering costs for the American people," writes White House deputy press secretary Andrew Bates. "Standing up to corporate price gouging is at the core of that fight."
Catch up fast: The latest inflation figures show that prices rose 3.4% over the last year — much lower than the scorching levels seen in 2022 but still too high for comfort.
- Meanwhile, the economy overall is on solid footing — particularly the labor market. The unemployment rate has been under 4% for 27 straight months.
Between the lines: Biden generally doesn't get much credit for economic strength. Former President Trump polls better on his handling of the economy. What do "normal people" base their positive assessment of Trump's economic stewardship? Is it based on guesses that have little to do with reality? Is it based on the fact they are likely Republicans anywy? My answer is "yes." For a clear-eyed, reality-based view of Trump's performance on the economy during his first term, we invite you to check out this article at U.S. News & World Report, under the headline "Many Remember Solid Economy Under Trump, but His Record Also Full of Tax-Cut Hype, Debt, and Disease; Numbers show that the economy during Donald Trump’s presidency has never lived up to his own hype."
- The administration has struggled with its messaging around inflation — they know it's making Americans feel bad, and that there's not much they can do about it before the election, as Axios' Hans Nichols wrote recently.
- They argue inflation would get worse under Trump — "top economists warn that MAGAnomics would set off an 'Inflation bomb,'" Bates writes.
Zoom in: In the memo, the White House lays out the steps the administration is taking to counter "price gouging" by companies. The gouging keeps "prices elevated despite inflation falling," it says.
- For each of the actions the White House lays out, it's facing blowback — typically in the form of lawsuits from companies with the support of Republicans who practice "MAGAnomics," it says.
For example: Airlines are suing over a new Transportation Department rule that would require them to disclose fees upfront.
- The credit-card industry is suing over a new Consumer Financial Protection Bureau rule that would cap credit-card late fees at $8.
- Pharma companies including AstraZeneca and Bristol Myers Squibb have filed suit over provisions in Biden's signature Inflation Reduction Act that give Medicare the power to negotiate lower drug costs.
The bottom line: The White House is fighting two battles, one against inflation and the other against the economic narrative.