Biden did better than most voters thought
Voters are ready to give President Biden a thumbs down in the November 8 election, and maybe two. Democrats seem likely to lose control of the House of Representatives, with perhaps a 50-50 chance of losing the Senate, too.
The main reason is no secret: Inflation. Gasoline prices have retreated from a peak of $5 per gallon in August, to about $3.75 now. But it’s not good enough. General inflation is still 8.2% and food inflation is 13%. Wages only increased by 4.3%. The typical paycheck buys less.
Much of this is not Biden’s fault. The huge stimulus bill that Biden signed in 2021 probably added to the problem, using spending. But there are bigger causes, such as COVID-induced distortions in spending patterns and supply chains, plus Russia’s war in Ukraine and the dramatic impact on energy markets. Inflation is everywhere, which indicates that this is not just an American problem. However, presidents are to blame for what happens on their watch, and Biden’s day of reckoning could be painful.
Inflation and its dominance as a pocketbook concern are overshadowing some of the things Biden has done well since he took office 19 months ago. Here are four of them:
Stabilize the government. After President Trump started its trade war in 2018, markets rumbled every week as Trump threatened punitive tariffs and other measures against China and many other countries, trading partners hit back and everyone wondered how far Trump would go. Towards the end of Trump’s tenure, the Libertarian Cato Institute rated Trump’s trade policy a D-despite a necessary update to the trade pact with Canada and Mexico.
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Other elements of the Trump presidency were chaotic. Trump attacked the Federal Reserve when he didn’t like its policies, raising questions about whether the Fed was truly independent. There was the failed effort to repeal Obamacare, without anything to replace it. Trump’s executive orders repeatedly failed in court. Turnover among agency heads break record highs. And of course there were dozens of ethical scandals during Trump’s tenure.
Under Biden, government is boring again — as it should be. On trade, Biden repealed Trump’s tariffs against allies, while keeping China’s tariffs in place. Instead of week-to-week hockery, Biden has spent 18 months developing a policy of strengthening restrictions on technology imports into China in ways that are sustainable. Biden did not say boo about the Fed, although he may not be happy about the aggressive increase in rates that could lead to a recession. There are legitimate questions about Biden’s son Hunter’s business dealings, but those predate Biden’s presidency, and unlike Trump, Biden has not placed any of his sons in government jobs. government If there were other Biden scandals, no one knows them yet. One of the reasons voters chose Biden over Trump in 2020 was to return normalcy to government. This, Biden did.
Climate investments. The Inflation Reduction Act, though misnamed, is the largest investment in green energy and breakthrough technologies in US history. And unlike the Green New Deal, which would have involved direct government intervention in most of the economy, the IRA broadly establishes incentives while relying on free market dynamics to reduce carbon burning and stimulate the development of alternatives. The new law, which Biden signed in August, is likely to lead to increased production of nickel, cobalt, lithium and other minerals crucial for electric vehicles, and ensure that much of that production is in the United States, to reduce dependence from foreign supply. . There is also funding for the toughest bottlenecks in green energy production, such as energy storage and transmission. These programs could pay dividends for years or even decades, and cement American leadership in many of the technologies needed to address climate change.
the manufacture of the United States. Another legislative achievement voters are in short change is the CHIPS + Act, which Biden also signed in August. This law, which Congress passed with bipartisan support, contains powerful incentives to stimulate the revival of the US semiconductor industry. Without explaining, exactly, Biden brings an important pivot away from the laissez-faire that governs in the direction of industrial policy which gives priority to economic sectors that could be key to future success. Free marketers may hate it, but China, Europe and most other countries are doing basically the same thing, which has left the US in the position of either getting in the game or giving up control of key technologies to other countries, indefinitely. The semiconductor law will bring back hundreds of billions of dollars worth of chip manufacturing to the United States and possibly help avoid future crises in which the United States is left relying on adversary nations for chips they can’t or won’t supply.
The strengthening of Ukraine. Some analysts think the United States has not done enough to help Ukraine repel the Russian invaders, and should provide tanks, fighters, long-range missiles and whatever else Ukraine says it needs. Others argue that Biden is too hawkish and fails to offer Russian President Vladimir Putin a lifeline. Overall, however, the United States is Ukraine’s most indispensable ally, providing far more military aid and other types of assistance than any other country. It has also kept Ukraine’s allies intact as Europe grapples with an energy crisis and other collateral damage from the war that is far more acute than Americans realize. Biden, so far, has led this unwavering effort with reassuring calm and no unnecessary chest beating.
Could another president do better? The answer is always, maybe. Sometimes voters prefer the imaginary alternative, an eventuality that Biden is now preparing for.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman
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