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December 20, 2023 Washington Wire
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Why all the caterwauling about the economy?

Washington Times, The (DC)

The post-pandemic American economy is the bright star on the global stage, yet President Biden gets little credit and could lose his job in 2024.

Growth in third-quarter gross domestic product growth was 4.9%, while the European Union's was near zero, and Germany may pull the continent into recession. The Federal Reserve and European Central Bank have enjoyed notable progress in pulling down inflation.

Jobs are plentiful, and the misery index — the sum of the inflation and unemployment rates — is low by historical standards. Yet the University of Michigan Consumer Sentiment Index has improved but remains more depressed than experience indicates it should be with conditions this favorable.

For Mr. Biden, that’s bad news.

The polls tracked by Real Clear Politics indicate Americans disapproving of his handling of the economy outnumber those approving by about 20 percentage points. His score on inflation alone is worse — negative by about 30 points.

Despite all the caterwauling, real incomes have not fallen that much.

Since Mr. Biden took office, structural budget deficits — the ongoing deficit net of the pandemic-relief blimp — zoomed.

Since he became president, the consumer price index is up 17%, and wages have increased 14%.

Not a big gap, but Americans see some grocery prices jumping enough to cause real pain: Steak is up 22%, and chicken has increased 23%.

Those who like to serve a good sirloin once a week and go lean the other six days must now disappoint one or two Saturday nights a month to afford the remaining steaks and poultry substitutes.

Electricity is up 27% since before COVID-19, and car insurance is about one-third more expensive.

Consumers don’t merely want inflation to stop; they want prices rolled back where they used to be. Without the Fed orchestrating another Great Depression, that would require H.G. Wells’ Time Machine.

Consumers are buying more services these days — going to restaurants and concerts and traveling more — but the CPI component for services less the volatile energy sector is up 18%.

That hits home every year when the bill for cable TV, which no longer includes "Thursday Night Football," rocks along faster than inflation or your paycheck.

But more broadly, the outlook is underwhelming. Economists are forecasting slower growth for 2024, and workers are in a struggle with their bosses over working from home.

Stuff the president promised to fix — the cost of college, homeownership and child care — has not improved.

Most importantly, wage gains are uneven.

Before the UAW strike, the typical autoworker earned $37 an hour vs. $27 for manufacturing workers overall. Now, autoworkers have won a 25% plus inflation raise over four years.

The president can tout that as a big win for workers, but it isn’t for most average employees. His polling numbers, even in Michigan, put him at best in a dead heat with former President Donald Trump.

Maybe a waitress in a diner outside a Ford factory will get a bigger tip the next time Shawn Fain swaggers in.

Beyond the economy, so much else is going badly.

The Hamas attack on Israel laid bare the absolute incoherence of Mr. Biden’s Middle East policy. He foolishly courted Iran, hoping to establish a limit on its nuclear program and sought to stabilize the region by fostering normalized relations between Saudi Arabia and Israel.

But those initiatives were wholly at odds with his tolerance of Israeli Prime Minister Netanyahu’s resistance to a Palestinian state, considering that Jews are less than half of the population east of the Jordan River — Israel proper, the West Bank and Gaza. Now, that has exploded in their faces.

In Ukraine, relying on sanctions and limiting Kyiv’s access to weapons that might overly antagonize Russian ruler Vladimir Putin have resulted in a stalemate and an endless drain on EU and U.S. budgets.

The president has no clear plan for winning the war in Ukraine, and voters disapprove of his handling of the crisis by about 9 percentage points.

This repeats for foreign policy generally — about 20 points; crime in our cities — more than 20 points; and illegal immigration — about 30 points.

On the overall direction of the country, the sum is greater than its parts. Americans who say the country is heading the wrong way outnumber those who are pleased by about 40 points.

It’s easy to write off voter assessments of Mr. Biden in his third year by noting most other presidents suffered low scores at this point in their tenure. As polled by Gallup, however, his approval ratings are lower than all former presidents going back to Ronald Reagan.

His 37% score does outperform Jimmy Carter's 31% in 1979, but we all know what the Gipper did to him in 1980.

With the president seemingly failing so badly at everything else, is it any wonder that Americans are so sour about a decent economy?

• Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.

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