This week in Bidenomics: Into the muddle
Thriving outside the rose (sorry).
Shortly after President Joe Biden took office in January, Economists predicted an economic boom The president is likely to run in the 2022 midterm elections. The rollout of Covid vaccines has soon reversed the epidemic. Companies were recovering much faster than expected. Trillions of dollars in aid have helped workers weather the Covid crisis. The pent-up demand meant consumers desperately needed to travel again, buy stores and party. The happy days were almost here again.
We never got to the party. The rise of the Covid variable spoiled Delta’freedom summer. Other things refuse to go in the right direction: Massive disruptions in the supply chain remain. Consumers cannot find what they want. Companies cannot hire the workers they need. Almost A quarter of all American adults remain unvaccinated, which leaves a wide area for a delta shape.
The latest job numbers illustrate the stagnation the Biden presidency has drifted into. The bosses Only 194,000 jobs were created in September, less than half of all economists’ forecasts. This is not bad news, but there 6.9 million workers are still less than before the pandemicA portion of eligible adults, both employed and job-seeking, remained severely depressed. Delta fears and other ambiguous factors keep people out of the labor force and this holds back the entire economy.
In early June, IHS Markit expected third-quarter GDP growth to exceed 8%. The company cut that over the summer and now believes growth in the third quarter was just 1.4%. A decrease in consumer spending and business investment accounts for most of the decline. During the same time frame, IHS lowered its full-year 2021 GDP growth forecast from 7.4% to 5.5%. (The government releases official GDP numbers for the third quarter in late October.)
The economy is still recovering from the coronavirus downturn, and there doesn’t seem to be any real chance of a recession. But the decline in performance and expectations has left consumers in a bad mood, and Biden will be a scapegoat for them. Morning Consult Consumer Confidence Index Shows Steady improvement over the first four months of Biden’s presidency, but a marked erosion in confidence since late July, as the delta variable hit the country. The Conference Board’s confidence index nearly regained pre-pandemic levels in early summer, but has since fallen to its lowest level in five years.
Biden does not seem to be solving the problems that are holding everything back. Since the sloppy and deadly withdrawal of US forces from Afghanistan in August, Biden has expressed concern and awareness of various types of retreat. But his administration has not been able to launch a vaccination campaign in the last quarter of the year or solve the problem of spare parts shortages, which make cars and equipment scarce. His vaccine mandate for large companies likely won’t take effect until next year – if he survives legal challenges – leaving millions of potential workers or workers worried about contracting the disease in workplaces with shifting and complex rules.
Amid all this, it comes as no surprise that Biden’s approval rating has fallen to 44% in the US A total of thirty-five surveys. Its rejection rate is 49%, which makes it “underwater”. The retreat follows the delta wave, and accelerated with the chaotic Afghan withdrawal in late August.
Biden could emerge from this recession with a major legislative victory, except, oh, darn, that wouldn’t be much better than anything else. Biden’s Democrats are proving just as dysfunctional as Republicans were under President Trump, with liberals and moderates on both sides of the party fighting each other to a stalemate over Biden’s key priorities.
Liberals want maximum spending on welfare programs, while centrist Democrats say it is overstated. In breach sits infrastructure program It enjoys general popularity and has bipartisan supportExcept the liberals are holding her hostage, with the ransom being a transformative expansion of the federal welfare system. Congressional Democrats kicked off the fall’s legislative session by showing inconsistency about how to mix them together, with a series of voting “deadlines” constantly slipping because votes weren’t there to pass anything.
Democrats may work on it by the end of the year and give Biden a set of legislative breakthroughs he can score in mid-2022. They may also be hopelessly torn as they look and fail to pass anything. This is the bane of having small majorities in both houses of Congress: the dominant party seems to be in control, except for rogue party members who essentially have veto power.
Other presidents have been in a similar slump to Biden. Donald Trump was less popular than Biden in the same period of his presidency. Barack Obama has fallen almost as low as Biden is now in the second year of his presidency. Obama recovered and won a second term. Trump did not. However, both presidents lost their gains in the first set of midterm elections after taking office. If that happens to Biden, he will lose his Democratic-controlled Congress and have to deal with newly empowered Republicans. Thus the slime becomes a cage match.
Rick Newman is the author of four books including:Rebounders: How winners pivot from setback to success.Follow him on Twitter: Tweet embed. You can also Send secret tips, and click here Get Rick’s stories via email.