DANIEL VAUGHAN: Recession Or Not - Biden Is Correctly Blamed On Inflation

 May 24, 2024

Some news has a short shelf life, and some is sticky. With politicians, you can figure out which stories are more important by watching their actions. For instance, this week, President Biden announced the release of another million barrels from the Strategic Petroleum Reserve. With one swift action, the White House revealed that no one believes the "good economy" line.

CNBC summarized the move as follows: "The Department of Energy said the release is timed to maximize the impact on prices at the pump this summer." Energy Secretary Jennifer Granholm added, "By strategically releasing this reserve between Memorial Day and July 4th, we are ensuring sufficient supply flows to the tri-state [region] and northeast at a time hardworking Americans need it the most."

The White House is highly sensitive to economic stories. They want Americans to believe that "Bidenomics" is a good thing. That strategy isn't working. When voters hear Bidenomics, they think "inflation" or "bad economy."

That was proven this week in a bombshell issue poll that revealed more than half of Americans, 56% to be exact, believe we're in a recession. Right now, by all technical measures, we're not in a recession. GDP growth is positive, and job growth is increasing, yet you see poll after poll say the same thing: Americans are unhappy with the economy.

Sometimes, you point to the fact that one political party has its head in the sand. For instance, if a Republican is in charge, Democrats believe the economy is in poor shape, regardless of the data. The same is true of Republicans. The problem for Biden and Democrats: "A significant but smaller percentage of Democrats, less than 40%, believed the same."

There's no sugarcoating things for Americans of all persuasions: things aren't good. The reasons are easy to figure out, and the poll in question, run by The Guardian, is clear on why: inflation and the cost of living are bad for everyone. What Democrats and their partisan defenders in the press are trying to do is paint a good picture on inflation. The Guardian writes:

The poll underscored people's complicated emotions around inflation. The vast majority of respondents, 72%, indicated they think inflation is increasing. In reality, the rate of inflation has fallen sharply from its post-Covid peak of 9.1% and has been fluctuating between 3% and 4% a year. In April, the inflation rate went down from 3.5% to 3.4% – far from inflation's 40-year peak of 9.1% in June 2022.

The Guardian is playing with words here. Americans are saying one thing clearly: inflation is still rising, and they don't like it. The Guardian is trying to say "that isn't true." But it is true.

The Guardian's point on the inflation rate is true. That's called "disinflation.That's when the rise of inflation slows, but it is still going up. Americans don't want disinflation. They want deflation. The average consumer wants prices to fall. Under disinflation, prices continue to go up.

You don't have to go far to compare anything. Joe Biden's problem is that when Americans are asked, "When were inflation and prices better?" The answer is very simple: pre-COVID, in 2019. Another way of putting that is that inflation was better before Biden was in office.

Biden partially gets the message here. That's why he's trying to drop gas prices to help his political case. The point he's making about summer gas prices is a funny cover. The only reason he's draining the Strategic Petroleum Reserve is because he believes it will help his electoral case with voters.

Maybe that works, or perhaps it doesn't. It's too early to tell. However, it is abundantly clear that the White House understands that Bidenomics isn't working. The economy is growing, and jobs are plentiful, yet people look around and see they can't afford the same things they could just four years ago.

The average voter is reminded of this every time they visit a gas pump, enter a grocery store, or eat in a restaurant.

Red Lobster's filing for bankruptcy, because the "all-you-can-eat shrimp" deal hit the bottom line too hard, is a microcosm of everything Americans see. A classic American restaurant in every community is going under because the costs of running that business have skyrocketed, and the profits aren't covering those costs. The average American looks around and says, "I understand, because I feel the same way."

If you're looking at the big picture, things like GDP, jobs reports, and other economic data, things are great. When Americans vote, they aren't carrying a report of the latest GDP numbers with them. They're more likely to have a grocery receipt or restaurant bill in their pocket. It's a burning reminder that ever since Joe Biden entered the White House, it's gotten harder and harder to live a basic American life.

That may not be a recession by any technical definition. But it isn't fake, either.

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Thomas Jefferson
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