Inflation threatens Biden’s re-election bid
Financial newspaper calls it US president’s ‘most stubborn political problem’
He wanted the US presidential election to be about “Bidenomics”. Instead, it risks being about “Bidenflation”.
Joe Biden faces one of the biggest threats to his hopes of beating Donald Trump from rising prices that are hitting Americans in the wallet.
The cost of living is rising more quickly again, just when the 81-year-old Democrat thought he had put the issue behind him to get a clear run at November’s vote.
Figures this week showed US consumer inflation accelerating to 3.5% in the year to March, the second straight month it has risen.
Gas prices and rent contributed to half the rise.
Bill Clinton’s 1992 election campaign famously said that “it’s the economy, stupid”, and 32 years later it appears that inflation may be a deciding issue.
The Wall Street Journal called it Biden’s “most stubborn political problem” while the Financial Times wondered if it could “sink Biden.”
“How inflation evolves between now and the presidential election could factor heavily in the outcome,” said Ryan Sweet, chief US economist at Oxford Economics.
The timing could not be worse for Biden, coming just as his campaign seemed to be turning things around.
Recent polls showed him pulling back even with Trump, while the United States not only avoided a recession after the Covid pandemic but now shows the strongest growth of any major global economy.
Most importantly inflation – which has dogged his administration since peaking at 9% in 2022 – had been falling for months.
Biden’s problem is that voters just are not always feeling what the figures show to be a booming economy.
Big economic numbers do not matter to Americans when they are hurting every time they fill up their cars with gas, struggle to feed their families when they go to the supermarket or wonder how they will pay the rent.
Polls repeatedly show that despite concerns on democracy after Trump’s divisive presidency, voters still rate the real estate tycoon more highly on economic matters than Biden.
The latest inflation figures are hitting consumer confidence, according to a survey out last Friday by the University of Michigan.
“There are some concerns that the inflation slowdown may have stalled,” Joanne Hsu, who led the study, told AFP.
The president sought to defend his record last week.
“We’re better situated than we were when we took office, where inflation was skyrocketing,” he said during a press conference with the visiting Japanese Prime Minister Fumio Kishida last Wednesday.
But Republicans have used it to attack, branding it “Bidenflation” in a riff on the “Bidenomics” tag that Biden has used to sell his policies.
“INFLATION
Trump posted to his social media site, Truth Social.
Even allies are worried.
Biden’s former chief of staff Ron Klain, criticised him for being “out there too much talking about bridges” and infrastructure instead of the fact that “eggs and milk are expensive”, Politico reported.
The White House says Biden has done all he can to rein in inflation, pointing to a raft of plans to lower prices of drugs, health care and tackle so-called “shrinkflation” – where, for example, candy bars shrink but cost the same.
“He talks about lowering costs almost every event,” press secretary Karine Jean-Pierre said.
But inflation poses another problem as it delays a cut in interest rates by the US Federal Reserve, something homeowners with mortgages want to see.
Interest rates are currently at a 23-year high as the US central bank hopes that the high cost of borrowing will encourage consumers to save instead of spend, thereby reducing demand and bringing prices down.
Politically, Biden’s best hope could be to use the same tactic that he has employed on other key issues – attack Trump.
He blamed Trump last Wednesday for bequeathing high inflation – even though figures actually rose during Biden’s first year and a half in the wake of the Covid pandemic – and said the Republican would make things worse if reelected.
“We have a plan to deal with it. Whereas the opposition, my opposition, talks about two things – they just want to cut taxes for the wealthy and raise taxes on other people,” he said.