Why Aren't You Dummies Feeling 'Bidenomics'?
Why Aren't You Dummies Feeling 'Bidenomics'?
It's complicated.
We try to do democracy’s work here and talk up the economy, which has steadily improved under President Joe Biden’s watch. Unfortunately, modern politics often operates under Janet Jackson’s “What Have You Done For Me Lately?” principle.
According to a CNN poll taken in July, 63 percent of American disapprove of how Biden’s handled the economy, which continues an unpleasant trend of majority disapproval since late 2021, when Republicans specifically seized on pandemic-related supply chain issues and inflation to paint a Carter-esque narrative of economic malaise.
Consumer confidence in the economy has improved, yet just 15 percent of voters believe the economy is going in the right direction. Joe Biden literally helped prevent not just a major recession but a sepia-toned depression. Yet, voters are still “What have you done for me lately?”
The cheerily named misery index — that lustful union between US unemployment and inflation rates — has fallen over the past year and, in June, reached its lowest point since March 2020, when the economy literally shut down. So, why are so many Americans sour on the current economy?
Emily Stewart at Vox broke down the discrepancy:
“As families started to adjust their lives to this new world of inflation, higher-income folks were also being hit by a volatile stock market,” Hsu said. “That’s something that doesn’t really affect people at the bottom income distribution; they’re not really exposed to stock markets directly.”
Most Americans who earn more than $100,000 a year own stocks, compared to 29 percent of Americans with annual incomes under $40,000. However, due to the so-called “wealth effect,” people in general feel more bullish about their spending and personal finances when the stock market is performing well. consumers feel better about their spending and finances when the stock market is doing well.
Donald Trump, while squatting in the Oval Office, would often rave about the stock market, taking unwarranted credit when the market rose and remaining silent whenever it fell. The stock market’s performance during the Biden administration trails both Trump and Barack Obama’s.
However, Biden had added far more jobs than his predecessors. Friday, White House Press Secretary Karine Jean-Pierre tweeted, “The last time unemployment was below four percent for this long, the Jackson 5 topped the charts. The last time this many jobs were created in one presidential term was never.”
The Jackson 5 factoid is interesting and probably why Jean-Pierre is fun at parties, but this does raise a larger question of why people have jobs in the first place. It’s not just for the thrill of serving strangers vanilla lattes. Jobs ideally make us feel somewhat financially secure. If you have a job but still struggle to pay your rent or buy groceries, you can’t help feeling cranky. It’s like how you’re more optimistic about life when you’re single than when you’re stuck a lousy relationship. When you’re single, at least there’s hope.
Interest rates are currently about seven percent, which negatively impacts middle and working class people the most. Just months before the pandemic, the Federal Reserve had reduced interest rates to 1.5 to 1.75 percent (Trump insisted that the “boneheads” at the Fed lower if to zero “or less”).
Reporter Rebecca Chen wrote, “The share of home loans taken out by low-income borrowers falls by 16 percent when interest rates rise by one percentage point.”
Getting shut out of homeownership can hurt many low-income households’ long-term financial prospects because home equity wealth can be used for retirement, funding education, or financing a small business among other opportunities.
If you spent years saving up for a down payment on a house prior 2020, you feel a longterm impact from the pandemic — high interests rates mean you’re now looking at either a much smaller house or one in a less desirable neighborhood. You’re also paying significantly more in interest and not building immediate home equity. Overall home inventory has also decreased because people are reticent about selling their current ones and getting stuck with a worse mortgage rate for a new one (even late-life downsizing).
Sarah Coles, head of personal finance at Hargreaves Lansdown, explained to CNBC, “As a rough rule of thumb, when rates are high, the banks will charge us more for borrowing, and pay a better return on savings. When rates are low, borrowing gets cheaper, but saving gets less rewarding.”
If you’re living paycheck to paycheck, you are more likely borrowing more than you’re saving and will appreciate low interest rates. High interest rates usually benefit people with longterm savings, but that usually doesn’t offer the immediate hit of the stock market. (The average 401(k) balance, though, fell 20.5 percent in 2022.)
Health care costs have also risen in 2023.
Politico argues that “Biden’s hopes for a second term could well depend” on perceived economic success, but does it? Voters thought the economy was a mess in 2022 and Democrats still resisted a red wave. Democrats might have even held the House if New York Democrats hadn’t been too sleepy to run effective campaigns.
It was the fall of Roe and far-right abortion bans that put Democrats in the offensive last year. Biden’s first 2024 campaign ad set the appropriate stakes.
Biden’s major advantage in 2024 is that he’s likely running against a twice-impeached, thrice-indicted, confirmed rapist. Debating economy politic with such an opponent would miss the point.
No, this time it’s not “the economy, stupid” but democracy itself.
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Here's the thing about the "democracy is in peril" talking point: anybody opposing the fascist party can make it. The economy, as per conventional wisdom, is chained directly to Joe Biden. As such, I have to co-sign ol' Crab Dip here:
https://twitter.com/cushbomb/status/1686522088528756736
Too bad we can't repeal the Tax Cuts for Rich Fuckwads in order to provide more people healthcare, rental assistance, home care assistance, down payment assistance, food assistance, you name it. There's a down payment assistance program for low-income folks here in CA that spent down the $288 million in only 11 DAYS.
I do think a big part of the problem is the vast wealth inequality that we all see getting worse, not better. Too many people are barely scraping by while a handful of rich white fuckheads have so much money they can blow $44 billion destroying a social media platform or doing vanity trips to space (Bezos).