30 years ago, Bill Clinton’s presidential campaign manager, James Carville, was so tired of answering the question, “What is this election about?” that he put a sign on his desk: “It’s the ECONOMY, stupid!”
Truer words have seldom been spoken.
In the fall of 1992, Americans were in a bad mood about the development of the economy and their family finances. Clinton carried that voter anger and fear to his historic victory.
Here we are three decades later, and the same political dynamic is in place. Since the beginning of the summer, polls have consistently shown that more than two-thirds of Americans believe the economy is going in the wrong direction. Unlike in 1992, when Americans feared losing their jobs, voters this time say they worry about runaway inflation and/or the economy crashing into a deep recession.
For most voters, these midterm elections are not primarily about abortion. The election is not about racism or inequality, climate change or President Donald Trump. They worry about their paychecks and the money in their wallets.
Ominous signs of inflation
Inflation has hovered between 8% and 9% over the past seven months. These are the worst CPI numbers since the early 1980s. The last time there was an election with such high inflation, Ronald Reagan won a landslide victory over incumbent Jimmy Carter and the Republicans won massive gains in Congress.
Former President Bill Clinton with his former strategist James Carville and associates in New Hampshire on January 19, 1992.`/Susan Walsh
The country is experiencing its worst consumer price index numbers since the early 1980s.
Americans have good reason to worry about skyrocketing prices for groceries, gas at the pump, health insurance and utility bills. The “essentials” that all Americans need to buy every week are up 15% to 30%. Inflation averaged just 2% during Trump’s four-year tenure, and just 1.5% the day Biden entered the Oval Office. The Biden White House’s claim last year that inflation was only a “high-class issue” or “temporary” today sounds ridiculous. Even more aloof was Biden’s recent statement that the economy was “fucking strong.” Perhaps that’s true within the bubble of recession-proof Washington, DC. But not so much in the rest of the country.
On the rare occasions when Biden at least acknowledges that inflation is a problem, he points the finger at oil and gas drilling companies, Big Pharma, Russian President Vladimir Putin, and local gas station owners for raising their prices. He even tries pathetically to blame the Republicans for the nation’s economic collapse – when the Democrats control every lever of power in Washington. Last week he said for the umpteenth time, “I’m doing everything in my power to bring gas prices down,” while revoking oil and gas permits, canceling pipelines, raising energy taxes, doling out billions of dollars in subsidies to wind turbines, solar and electric battery companies, pledging to “shut down” all domestic oil and gas production over the next 12 years.
Americans instinctively take up this blame gambit. It is not difficult to understand which match lit this forest fire of raging inflation. Biden took office and immediately began using the fallout from the COVID crisis as an excuse to pass four massive spending bills valued at $4.1 trillion. Almost every penny of that is paid for by adding more debt to the federal credit card. And because the Federal Reserve Board bought most of that debt, the spending was ultimately paid for by printing money.
Just take a look. Where has this economic strategy been tried before? A few countries spring to mind: Argentina, Bolivia, Greece, Mexico, Venezuela, Zimbabwe. Either way, the result was runaway inflation and a financial crisis. Why is anyone in Washington even surprised that inflation has quadrupled since Biden started spending like he was playing Monopoly?
I and others on these pages have pointed out in recent weeks that with inflation at about 8.5% and wage growth at less than 5.5%, real wages for workers last year rose by about $4,000 for an average family has shrunk. This is Biden’s inflation tax – the cruellest tax of all because it puts the poor and middle class right under their noses. Add to this the depreciation of $30,000 and more of the average 401(k) plan for tens of millions of Americans because the stock market has depreciated and inflation is reducing the value of any small gains Americans might have experienced in the last 20 months .
The stock market is lower today than it was when he took office. Interest rates on the 10-year Treasury bill have risen from 1% to over 4.25%. The national debt has risen by more than $3 trillion, mortgage rates are at or above 7% – up from 2.85% when Trump left office – housing starts have slumped, manufacturing is near halt and Americans are running into record debt their credit cards to pay their bills. Since the beginning of the year, the economy has grown by practically 0%.
A whiteboard from the 1992 Clinton presidential campaign.Warroom Documentary
Quickly. Can you name one thing in the economy that Biden got right?
Economists and business leaders are almost unanimous in saying America will head off the road into an economic recession ditch. Hi! For most Americans, we are already in a recession. The notion that things are likely to get worse is a ludicrous claim for half of Americans who live paycheck to paycheck.
Most worryingly, after Plan A, Biden and the Democrats who lead Congress have no Plan B to saturate the economy with trillions of dollars in debt, inflation and government spending. We had a great exercise in Modern Monetary Theory, a dingbat idea that America could borrow and spend whatever we wanted and there would be no cost. Well America, how do you like it now?
The stock market is lower today than it was when he took office. AFP via Getty Images/Jim Watson
Riding the red wave
Republicans could and should win a historic election in November 1980, 1994 or 2010 if they understand what Democrats don’t but voters do. This year’s election is about inflation, $4-$5 gas prices per gallon and a national debt that has soared to over $30 trillion.
I have no illusions that Republicans will do everything better. (They also like to play Santa.) But if you have a football coach who goes 0-16 for the season, start firing the coach. That’s not complicated. Carville was right: it’s the economy, fool!
Stephen Moore is a Senior Fellow at the Heritage Foundation and Chief Economist at FreedomWorks. He is the author of Trumponomics: Inside the America First Plan to Rebuild Our Economy.
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