To maximize his chances of reelection, Joe Biden must conquer inflation and the Americans’ economic pessimism. For the moment, it’s working.
Thirty years on, the watchword of Bill Clinton’s first presidential campaign still sounds: “It’s the economy, stupid!”
Despite the avalanche of criminal charges facing his Republican opponent, Joe Biden knows that his reelection depends above all on improving the real economic conditions of his fellow citizens.
Biden seems to be poised to win his bet, and that is good news for all of us.
The Economy 1st
If one relies solely on Biden’s approval ratings, which have been anemic since the summer of 2021, his chances of reelection might seem doubtful. But this is not a sufficient indicator.
Americans are pessimistic about the economy, and that is a bad sign for Biden. Nevertheless, and there is a ton of political science studies on the subject, the odds of reelection for a president rest above all on the real growth of household purchasing power during an election year and not on perceptions.
As 2024 looms, how is Biden’s economy faring?
Older adults might remember, for better or worse, “Reaganomics,” the name given to the drastic measures Ronald Reagan took to combat inflation with astronomical interest rates and to reduce the size of government by slashing the social safety net and regulations. Despite high unemployment, Reagan pulled off his gamble and won the 1984 presidential election.
“Bidenomics” is different. Interest rates have climbed, but not as much as they did under Reagan. Biden has banked primarily on government intervention to maximize job growth. After betting on a massive post-pandemic stimulus, he has succeeded in triggering massive investment in public infrastructure and industrial policies aimed at developing key sectors like semiconductors and renewable energy.
On the whole, whatever the “experts” in the comments sections are saying, it is working. Inflation is decreasing faster in the United States than elsewhere in the industrial world, unemployment has returned to historically low pre-pandemic levels (3.6% in June), and gross domestic product growth remains strong. Even more encouraging for Biden, wage growth recently outpaced consumer prices.
It’s Not Over Yet
Voters have short memories. Biden will have to rely on a continuation of these favorable trends in 2024 to sail to victory. To that end, the strength of the job market and the launching of numerous infrastructure projects bode well for him.
International circumstances could play tricks on Biden, especially if energy and food prices rise sharply. In addition, even if the numbers clearly show that economic growth is generally better under Democrats, he must confront the persistent myth of Republican economic competence.
How does this affect us? For starters, even if Biden’s protectionist policies are an irritant, the Canadian economy depends more on overall growth in the U.S. than on trade harmony. Most importantly, because democracy will be at stake in 2024, all those who believe in it have a vested interest in Biden winning his economic bet.