No. of Recommendations: 5
The last 4 years have seen unusually high inflation due to Covid-related supply chain imbalances, I'll grant you, but wages have kept up since March 2023. See this blue line (wages) rising above the black line (inflation) on this chart of the Biden years?Sure - but there was a non-trivial amount of time when wages
didn't keep up. When prices were rising so fast that they outpaced any wage increases. That period lasted about
two full years (from April 2021 to April 2023). And voters
hate that. As put by
Vox (not a right-wing source):
Yet in the public mind, the new economic agenda was largely overshadowed by a problem the reformers had not anticipated: the highest inflation in four decades. It was the neoliberals who had warned about this, while the progressives were caught flat-footed, as was the Biden administration.
“People don’t like inflation and we got a lot of it,” economist Adam Ozimek told me. This was a global phenomenon and not primarily caused by Biden’s policies, but the administration was slow to adjust and made it somewhat worse. “The stimulus was way too large, it came out all at once, and they proceeded to follow it with a variety of spending packages,” Ozimek said. He added that the economy is now in a good place after hefty interest rate hikes, but that we took a “chaotic path” getting there.
In the end, Biden’s economic policy ended up historically unpopular.https://www.vox.com/2024-elections/377170/kamala-h...Yes, wages have finally caught up. But as Bush 41 learned, voters' sense of the economy tends to get locked in well before the election, so late changes in the economy don't help much. And honestly, given the choice between real wages rising slowly but pretty steadily with low inflation (as during the pre-pandemic Trump years), and real wages being stagnant over the long term but with very high inflation, most voters will prefer the former. Voters hate inflation, and they hate periods of economic pain.
Plus, because so many economists (including some Democratic economists) were warning that the stimulus that the Administration was putting in place with the ARP and the BIL and the IRA would cause higher inflation, and the Administration's dismissal of those concerns (remember MMT?), the Democrats have virtually no political tools to deflect voter blame. And, of course, there's interest rates - which are unambiguously higher than during the Trump years, and are particularly painful for those looking for housing or cars or other big ticket items.
So voters aren't being obtuse here. They genuinely did not like the way the economy performed during the Biden years, and explaining to them that the period of declining real wages due to high inflation was eventually undone by a period of rising wages that brought things back to stagnant
doesn't make them feel better about it. It might be an amazing accomplishment of monetary policy by the Fed - but it's also not something voters enjoyed going through, and that makes it hard for Democrats to get their confidence on the economy. Especially since they're still living with higher interest rates.
