As this is written, the Biden presidential campaign is in the throes of an agonizing reappraisal, the result of the president’s woeful performance in the June 27 debate with Donald Trump. It’s hard to make the Donald, an execrable character on his best day, look good, but Joe Biden succeeded.
Before a friendly, enthusiastic crowd in North Carolina the day following the debate disaster, the president was back in form (sort of), reprising his hyper State of the Union address. “When you get knocked down, you get up again,” he bellowed to hearty cheers, failing to mention that he had knocked himself down; Trump never laid a glove on him, just looked in in bemusement.
The Democratic establishment was quick to make excuses and diminish the negative impact as a one-off momentary setback. Not to worry, they proclaimed in unison; Joe was tired, had a cold, suffered jet lag, or was simply overprepared. Besides, if he can’t make it through the next four years, there’s always Kamala and her 41% approval rating waiting in the wings. Don’t even think about a brokered convention, people. Fortunately, the opponent will be Donald Trump, preternaturally healthy, but mentally comatose.
Let’s return, then, to reality and the upcoming election. Assuming Joe Biden locates his missing mojo, furloughs his incompetent handlers, and tries to be himself (and remains the nominee), the question becomes one of finding the best way to campaign in 2024. It won’t be easy.
Foreign policy in the form of Israel’s Gaza war has driven a giant wedge through the center of the Democratic Party. Democrats over a certain age remain willing to support Biden’s approach to the Middle East; Democrats under a certain age want no part of it. Centrists by and large back the president; progressives by and large don’t. And Arab-Americans, an awakened presence in crucial Michigan, see Democrats as far too closely tied to Israel.
The Democratic division shows up starkly in polls. By March of this year, according to Gallup, a clear majority of the public (55%) registered opposition to Israel’s incursion into Gaza, which the Biden administration still supports. That included 82% of Democrats, up from 64% in November. For Joe Biden, this amounts to a self-inflicted political wound, given his tight embrace of the Netanyahu government.
The good news for the president, such as it is, may be that most voters will not cast their ballots on his Gaza policy, or on his other self-inflicted wound, the mess at the southern border. (See: “The Absurdity of American Immigration Policy,” 5/15/24 TPP.). Instead, they’ll follow the James Carville dictum and vote on the economy. Here, the conventional wisdom says, Biden has an advantage. Not so fast.
Based on traditional measures of economic success — rate of unemployment, number of jobs created, stock market performance — Joe Biden should be in excellent shape. Except for a slight recent uptick, official unemployment has been 4% or less for two years. In total, 10.8 million jobs were created from 2021 through 2023. The Dow Jones industrial average exceeded 40,000 for the first time in mid-May, and the S&P 500 stock index for large companies has risen 12% in 2024. In fact, all the various stock indices are either at or near record levels.
In theory, things couldn’t be better, especially for certain categories of Americans — for instance, those having large salaries and those owning mortgage-free homes. Things are particularly good for the 10% who own 93% of all stock-market shares, and they’re even better for the 1% who own 52% of those shares. Walmart, the nation’s largest retailer, reported that its first-quarter 2024 profits ($5.1 billion) were triple returns for the same period last year, due almost entirely to shopping by affluent households, those with incomes over $100,000 and few concerns about rising prices.
And there’s the rub. America has a two-tier economy; there are those at or near the top (roughly the upper 20%), who live in one economic world, and then there are the rest, who live in another. The Biden administration and its loyalists, who should know better, have been slow to recognize the disparity. One Biden partisan, esteemed economist Paul Krugman, claimed earlier this year that we have the best economy since the 1990s. True on paper, perhaps. Yet voters, including many Democrats, apparently disagree, a perception that precedes the president’s dreadful debate performance.
Opinion polls have consistently shown, for several months now, that the public views the economy as no better than fair-to-poor, and the lower the income, the lower the assessment. This includes working-class swing-state Biden supporters from 2020, a key voting segment again this year.
Unsurprisingly, Trump is the beneficiary of this sentiment; one NBC poll taken in February showed him more trusted on the economy than Biden by 22 percentage points. Most ominous for the Democrats, they’re bleeding support from lower-income Black and Hispanic voters struggling with higher prices and the cost of living — in other words, with inflation.
Supposedly under control in 2023 — it had peaked at 9.1% in mid-2022, then trended down — inflation came roaring back in 2024. From 3.1% year-on-year in January, it surged to 3.5% by spring before easing back in June to 3.1% once more.
A 3% to 4% inflation rate sounds small, but remember, it’s cumulative; prices are still steadily climbing, just more slowly. Few, if any, consumer products have returned to pre-pandemic price levels. Some critical items (e.g. groceries, autos, auto repairs and insurance) are anywhere from 20% to 50% higher than in 2020.
Meanwhile, the designated ringmaster of this circus, interest-rate czar Jerome Powell, chairman of the Fed, counsels patience and simultaneously admits to puzzlement at the persistence of inflation. And a New York Times economic columnist (Jeanna Smialek, 5/22/24), presumably cushioned from inflation, explains the situation thusly: “Americans have not yet broadly accepted high prices as an unavoidable reality of life.” Well, shame on them!
Could Joe Biden do anything to help and save his presidency at the same time? Yes, he could shelve the “shrinkflation” routine and get serious about directly confronting America’s corporations, whose actions are at fault. Corporate price gouging in pursuit of higher profit margins is the fundamental source of inflation. As a confirmed political centrist, the president’s been reluctant to say so. Now, he has no choice.
Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books. Editor’s Note: Of course, this column was written before President Biden quit the race and endorsed Vice President Kamala Harris..
From The Progressive Populist, August 15, 2024
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