Biden's economy is shaped by politics and inflation fears

President Joe Biden is banking on the idea of making life more affordable for middle-class families -- and that's where the recent bout of inflation poses both a political and an economic risk.

Biden's economy is shaped by politics and inflation fears

President Joe Biden is banking on the idea of making life more affordable for middle-class families -- and that's where the recent bout of inflation poses both a political and an economic risk.

TheEditor
TheEditor
26 July 2021 Monday 14:34
450 Reads
Biden's economy is shaped by politics and inflation fears

According to a poll by The Associated Press-NORC Center for Public Affairs Research, the U.S. economy is poised for its fastest growth since 1984. However, many Americans don't feel all that optimistic about the economy. Republican lawmakers have attacked the Biden administration over inflation as the country reopened from the coronavirus pandemic, and feelings about the economy are settling along partisan lines.

Only 45% of respondents think the economy is in good condition, and 54% believe it's in bad. Views are similar to what they were in AP-NORC polls in June and in March, despite increases in vaccinations and the flow of aid from Biden's $1.9 trillion coronavirus relief package. The results suggest that Americans not only filter their thoughts about the economy through their politics but also see uncertainty as the country is still 6.8 million jobs below pre-pandemic levels.

John Novak, 52, is a Hudson school maintenance worker. He's tired of paying higher gasoline prices and waiting six months to purchase a refrigerator. He attributes the large aid package to the increase in gasoline prices.

Novak, who voted last year for President Donald Trump, stated that everything costs more and that no one is really making more than if they get government money. It's a difficult spot. It's like we're coming out of the pandemic. Then, when you put too much money into it, you can't stop wanting what you want."

The Biden administration is acutely aware of the fact that inflation can be used political against Democrats. Officials say they will continue to monitor price rises, but that the recent surge is a reflection of the complicated nature of restarting an economic system that was shut down by the pandemic. They also claim that inflation will not be increased permanently.

The Manheim Used Vehicle Value Index dropped in the first 15 days July, which is an early sign of inflation decreasing. Meanwhile, the economy has been adding nearly 605,000 jobs a month since Biden became president and economic growth is tracking above 7%.

Jared Bernstein, member of the White House Council of Economic Advisers, stated that there is no better way to counter false messaging than posting strong performances. It's easier for people to present a false reality when you're in the middle of a recovery with such numbers.

Despite this, political identity still influences views about the economy. About 6 out 10 Democrats consider the economy to be good. Three-quarters of Republicans think conditions are poor.

This reflects how Americans judge Biden's economy handling, with 52% disapproving and 47% approving. Biden's overall approval rating is 59%. His approval rating for handling the COVID-19 pandemic is 66%.

Biden's economic policies are favored by 8 out 10 Democrats and only 1 in 10 Republicans. Biden's handling the coronavirus pandemic was favored by Republicans (about 3 out 10 approve) as well as issues such health care and infrastructure (2 in 10).

Federal Reserve officials have estimated that the economy could grow at roughly 7% this year. The U.S. central banks is charged with maintaining inflation at 2%. However, there are indications that prices are still rising because of limited supply of raw materials, houses, and autos.

Solid demand should lead to more supply, which could then ease inflation. The outlook for inflation, which Fed Chair Jerome Powell believes is temporary, has become a bit more uncertain. Consumer prices jumped 5.4% for the year ended in June. They are up 4.5% after excluding volatile food and energy costs. This is the largest increase since 1991.

Powell stated this month to the Senate Banking, Housing and Urban Affairs Committee that he doesn't know of another instance when a $20 trillion economy was reopened. "We are humble about what our understanding is."

Joseph Smith, 72, a retired man from Alexandria, Virginia, expressed concern that the constant focus by Powell and Republicans on inflation has been spooking customers.

Smith said that the Fed "is sort of hindering economic growth by talking about inflation all day". Smith supported Biden last fiscal year and believes the president has brought "real stability to the government" through his straightforward talk on the economy and coronavirus.

Republican lawmakers have blamed Biden's spending for the inflation and say his plans for another $4.1 trillion in new spending to be paid for through taxes on the wealthy and corporations will only cause prices to keep rising. It is being portrayed as a return of the 1970s runaway price rises. However, economists who are concerned about inflation claim that this is not true. The message is catching on with Republican voters.

"As Joe Biden’s inflation crisis rages," stated Florida Senator Rick Scott, who is the chairman of The National Republican Senatorial Committee. "Americans are again experiencing inflation of 1970s-style, and it's due to Joe Biden's failed economic policy."

These criticisms are being heard by voters as Biden tries to increase the appeal of his policies.

Gregory Holman (58), a Grants Pass hotel property manager, stated that he couldn’t find an affordable used vehicle. He blamed too many government spending for the problem and graded Biden accordingly.

Holman stated, "I would give him an F." Holman said, "He's just an failure at everything he did."

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