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N.Y. Democrats in Tough Fight to Capture an Open G.O.P. House Seat
Although the district in central New York leans Democratic, it has been safely held by a moderate Republican, Representative John Katko, who is retiring.SYRACUSE, N.Y. — For years, Democrats have avidly eyed a congressional district in central New York as ripe for the flipping.The numbers were in their favor: The party enjoyed a voter registration edge over Republicans; in 2016, district voters favored Hillary Clinton by about four percentage points over Donald J. Trump; four years later, Joseph R. Biden Jr. won the district by nine points.Yet every two years, Representative John Katko, a local Republican with moderate views, outperformed his party to defend his seat. This year, Mr. Katko is no longer a factor: He has chosen not to seek re-election.Mr. Katko’s open seat in the 22nd District represents a rare chance for Democrats — who are all-in on trying to protect their majority in Congress — to win a Republican-held seat.It is not expected to be easy: With Republicans riding a national wave of anger over inflation and fear of crime, recent polls show a tight race between the Republican candidate, Brandon Williams, and his Democratic opponent, Francis Conole, a Naval intelligence officer with deep ties to the district.“This is a very volatile year,” said Stephanie Miner, the former Democratic mayor of Syracuse. “And that’s going to be reflected in what happens in this race.”Voters will have a clear contrast in choosing between the candidates; Mr. Williams seems most unlikely to follow in the footsteps of Mr. Katko, who was recently listed as the third most bipartisan member of Congress.A conservative businessman who lives outside the district, Mr. Williams embraces Donald Trump and ran without his party’s backing in the primary.He has characterized Mr. Katko as a RINO, or Republican in name only, and criticized his lack of loyalty to Mr. Trump. And in a recent debate against Mr. Conole, Mr. Williams made clear that, if elected, he had little intention of working with Democrats.“I want to translate bipartisan, which really means politics as usual,” Mr. Williams said in Wednesday’s debate. “We can’t afford politics as usual. We really need a fresh perspective.”Representative John Katko, who is retiring, has not endorsed Mr. Williams, his party’s candidate.Stefani Reynolds for The New York TimesMr. Conole has attacked his opponent’s hard right stances on issues including his support for tax and spending cuts and his opposition to abortion rights. He has also raised $2.6 million for his campaign, ending the last filing period with more than half a million cash on hand, to his opponent’s $236,000.But Mr. Williams has the support of a vast Republican campaign apparatus. Last week, he was joined on the campaign trail by a handful of House Republicans, including the House minority whip, Steve Scalise, and Representative Lee Zeldin, the party’s candidate for governor of New York.Republican interests have also spent nearly $6.5 million on television and radio ads to bolster Mr. Williams in the last six weeks, according to the advertising firm AdImpact — the vast majority from the Republican Congressional Leadership Fund.In a media call on Thursday, the state Republican chairman, Nick Langworthy, expressed confidence about Mr. Williams’s chances, predicting inflation would be a driving factor for voters.“Voters cannot and will not trust the people who made this economic mess to fix it. And that’s why we have the momentum in this race with 12 days to go,” he said.The momentum is also being seen elsewhere. Gov. Kathy Hochul is leading the Republican nominee, Mr. Zeldin, in some polls by single digits — an unusually tight race for left-leaning New York. Nationally, pundits ask not whether Republicans will retake the House of Representatives, but by how much..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.The sea change in New York, of all places, is the latest sign that Democrats are struggling to assure voters they have a plan to tackle rising inflation and other economic woes. Their ability to do so could hold the key to determining swing districts across the nation, analysts say.“I see this race as a talisman race for the House, not just here in New York State, but throughout the Northeast and Midwest,” veteran Democratic political strategist Bruce Gyory said. “I would not bet on the outcome.”This Syracuse-area district was Democrat-leaning even before the current redistricting cycle. Spanning Oneida, Onondaga and Madison Counties, it is one of state’s rare purple districts, a place that repeatedly sent Mr. Katko to Washington at the same time as it chose Ms. Clinton and President Biden over Mr. Trump.Mr. Conole, who was born and raised in the 22nd District, was recognized recently by one of his schoolteachers, who greeted him from her car.Benjamin Cleeton for The New York TimesMr. Katko has stayed pointedly neutral during this campaign, refusing to endorse Mr. Williams, though he has been supported by the rest of the Republican establishment.This silence has allowed the Democratic candidate, Mr. Conole, to claim his legacy as a bipartisan deal maker.“Central New Yorkers and Americans are exhausted with the extremes. They’re not going to move this country forward,” Mr. Conole said in a recent debate hosted by Syracuse.com.Mr. Conole was born and raised in the district, the grandson of the former Onondaga County sheriff, Patrick Corbett, the first Democrat elected to the post. He served in Iraq before joining the Pentagon, staying through both the Obama and Trump administrations. He ran for Congress in 2020, losing in the Democratic primary to Dana Balter.“I made the decision to run because of the multitude of crises we face,” Mr. Conole explained in an interview, listing gun violence, the climate, economic distress and abortion rights. “We now have fundamental freedoms at risk. Before that we had elections denied, Jan. 6 — the very guardrails of our democracy on the line.”Mr. Williams came to the area over a decade ago, when he and his wife purchased a homestead outside Skaneateles, N.Y., where they farm hazelnut trees and truffles. The son of a wealthy Dallas Democrat, Mr. Williams has attended top schools, served on a nuclear submarine, worked on Wall Street and founded a venture capital firm and software company. This is his first time running for office.In an interview, Mr. Williams described what drew him to postindustrial central New York, which has seen a sharp economic decline with the offshoring of manufacturing jobs.“The more prosperous a community has been, you know, a lot of times it’s becomes transactional and transitional,” he said. “You just have this fabric of families here that you don’t find really in a lot of other communities.”Democrats, including President Biden, have sought credit for the legislative package of incentives that helped lure Micron to build a semiconductor factory near Syracuse.Kenny Holston for The New York TimesReviving the area’s economy has been a focus of local leaders, especially Democrats who hope the announcement of a new Micron semiconductor factory, which is projected to create 50,000 jobs in the region, will help to temper some of those concerns.On Thursday, President Biden, whose low approval ratings have made him a rare sight on the campaign trail, appeared in Syracuse to deliver a message of economic hope, referring to the Micron factory — billed as the largest private investment in the country’s history — as one of the “bright spots where America is reasserting itself.”He specifically cheered Representative Katko for supporting the CHIPS and Science Act that provided the subsidies credited for sealing the deal, saying, “John is Republican. I like him a lot.”Mr. Williams has criticized the CHIPS Act, but he has also said that he would have voted for the semiconductor subsidy.Republicans have strongly supported Mr. Williams, with a handful of House Republicans, including Lee Zeldin, the state G.O.P. candidate for governor, appearing with him on the campaign trail.Benjamin Cleeton for The New York TimesVoters like Randy Watson are hopeful that Mr. Williams will bring them some relief. A town supervisor in Vernon, about an hour east of Syracuse, he showed up for a breakfast town hall hoping to hear from Mr. Williams and introduce himself.His biggest concern, he said, was inflation, which was “just killing everyone.” Mr. Watson, a Republican, said he blames Democrats in Washington for financial policies that have overstimulated the economy.“I really hope they stop giving away our tax money,” Mr. Watson said. “Everyone had so much because of Covid, and they just spent and spent and spent.”Others see more complex causes of economic distress, including global pressures.“If you think the Democratic Party is responsible for inflation, you aren’t paying attention,” said Kathy Kelly, of Syracuse. Ms. Kelly believes that Democratic policies have set the country on the right direction, but that there is still much work to do. She worried that voters concerned with their own immediate economic situation could miss the bigger picture.“We want our elderly to be taken care of, and we want job security,” she said, adding: “The bottom line is, people want the same thing.” More
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Republicans Denounce Inflation, but Few Economists Expect Their Plans to Help
WASHINGTON — Republicans are riding a wave of anger over inflation as they seek to recapture the House and the Senate this fall, hammering Democrats on President Biden’s economic policies, which they say have fueled the fastest price gains in 40 years.Republican candidates have centered their economic agenda on promises to help Americans cope with everyday price increases and to increase growth. They have pledged to reduce government spending and to make permanent parts of the 2017 Republican tax cuts that are set to expire over the next three years — including incentives for corporate investment and tax reductions for individuals.And they have vowed to repeal the corporate tax increases that Mr. Biden signed into law in August while gutting funding for the Internal Revenue Service, which was given more money to help the United States go after high-earning and corporate tax cheats.“The very fact that Republicans are poised to take back majorities in both chambers is an indictment of the policies of this administration,” said Senator Bill Cassidy, Republican of Louisiana, noting that “if you look at the spending that they did on a partisan basis, we certainly would be able to stop that.”But while Republicans insist they will be better stewards of the economy, few economists on either end of the ideological spectrum expect the party’s proposals to meaningfully reduce inflation in the short term. Instead, many say some of what Republicans are proposing — including tax cuts for high earners and businesses — could actually make price pressures worse by pumping more money into the economy.“It is unlikely that any of the policies proposed by Republicans would meaningfully reduce inflation in 2023, when rapidly rising prices will still be a major problem for the economy and for consumers,” said Michael R. Strain, an economist at the conservative American Enterprise Institute.As they position themselves for the midterm elections, Republicans have also indicated that they might try to hold the nation’s borrowing limit hostage to achieve spending cuts. The debt ceiling, which caps how much the federal government can borrow, has increasingly become a fraught arena for political brinkmanship.The State of the 2022 Midterm ElectionsElection Day is Tuesday, Nov. 8.Bracing for a Red Wave: Republicans were already favored to flip the House. Now they are looking to run up the score by vying for seats in deep-blue states.Pennsylvania Senate Race: Lt. Gov. John Fetterman and Mehmet Oz clashed in one of the most closely watched debates of the midterm campaign. Here are five takeaways.Polling Analysis: If these poll results keep up, everything from a Democratic hold in the Senate and a narrow House majority to a total G.O.P. rout becomes imaginable, writes Nate Cohn, The Times’s chief political analyst.Strategy Change: In the final stretch before the elections, some Democrats are pushing for a new message that acknowledges the economic uncertainty troubling the electorate.Multiple top Republicans have signaled that unless Mr. Biden agrees to reduce future government spending, they will refuse to lift the borrowing cap. That would effectively bar the federal government from issuing new bonds to finance its deficit spending, potentially jeopardizing on-time payments for military salaries and safety-net benefits, and roiling bond markets.Mr. Biden has tried to push back against the Republicans and cast the election not as a referendum on his economic policies, but as a choice between Democratic policies to reduce costs on health care and electricity and Republican efforts to repeal those policies. He has accused Republicans of stoking further price increases with tax cuts that could add to the federal budget deficit, and of risking financial calamity by refusing to raise the debt limit.“We, the Democrats, are the ones that are fiscally responsible. Let’s get that straight now, OK?” Mr. Biden said during remarks on Monday to workers at the Democratic National Committee. “We’re investing in all of America, reducing everyday costs while also lowering the deficit at the same time. Republicans are fiscally reckless, pushing tax cuts for the very wealthy that aren’t paid for, and exploiting the deficit that is making inflation worse.”The challenge for Mr. Biden is that voters do not seem to be demanding details from Republicans and are instead putting their trust in them to turn around an economy that voters believe is headed in the wrong direction. Polls suggest Americans trust Republicans by a wide margin to handle inflation and other economic issues.In a nationwide deluge of campaign ads and in public remarks, Republicans have pinned much of their inflation-fighting agenda on halting a stimulus spending spree that began under President Donald J. Trump and continued under Mr. Biden, in an effort to help people and businesses survive the pandemic recession. Those efforts have largely ended, and Mr. Biden has shown no desire to pass further stimulus legislation at a time of rapid price growth.Representative Jason Smith of Missouri, the top Republican on the House Budget Committee, said in a statement that “the first step in combating inflation is to stop the historically reckless spending spree occurring under one-party Democrat rule in Washington, and that will only happen with a Republican majority in Congress.”.css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.“Republicans,” he added, “will fight to bring down the cost of living and impose fiscal restraint in Washington, and that begins by ensuring Democrats are not able to impose round after round of new inflationary spending.”Economists largely agree that the Federal Reserve is most responsible for fighting inflation, which policymakers are trying to do with rapid interest rates increases. But they say Congress could plausibly help the Fed by reducing budget deficits, in order to slow the amount of consumer spending power in the economy.One way to do that would be to significantly and quickly reduce federal spending. Such a move could result in widespread government layoffs and reduced support for low-income individuals — who would be less able to afford increasingly expensive food and other staples — and could prompt a recession. “The amount of cuts you’d have to do to move the needle on inflation are completely off the table,” said Jon Lieber, a former aide to Senator Mitch McConnell of Kentucky who is now the Eurasia Group’s managing director for the United States.Still, Mr. Lieber said that likelihood would not sully the Republican pitch to voters this fall. “Midterm votes are a referendum on the party in power,” he said, “and the party in power has responsibility for inflation.”“The very fact that Republicans are poised to take back majorities in both chambers is an indictment of the policies of this administration,” said Senator Bill Cassidy, a Republican.Haiyun Jiang/The New York TimesBiden administration officials contend that the Republican plans, rather than curbing inflation, could worsen America’s fiscal situation.Administration economists estimate that two policies favored by Republicans — repealing a new minimum tax on large corporations included in the Inflation Reduction Act and extending some business tax cuts from Mr. Trump’s 2017 legislation — could collectively increase the federal budget deficit by about $90 billion next year.Such an increase could cause the Federal Reserve to raise rates even faster than it already is, further choking economic growth. Or, alternatively, it could add a small amount to the annual inflation rate — perhaps as much as 0.2 percentage points. Fully repealing the Inflation Reduction Act would also mean raising future costs for prescription drugs for seniors on Medicare, including for insulin, and potentially raising future electricity costs.“Their plan to repeal the I.R.A. and double down on the Trump tax cuts for the wealthy will worsen inflation,” said Jared Bernstein, a member of Mr. Biden’s Council of Economic Advisers. “On top of that, they’re also explicit that they’re coming for Social Security and Medicare, making this a terribly destructive agenda that starts by fighting the Fed and moves on to devastating vulnerable seniors.”Conservative economists say the inflation impact of extending Mr. Trump’s tax cuts could be much smaller, because those extensions could lead businesses to invest more, people to work more and growth to increase across the economy. They also say Republicans could help relieve price pressures, particularly for electricity and gasoline, by following through on their proposals to reduce federal regulations governing new energy development.“Those things are going to be positive for investment, job creation and capacity” in the economy, said Donald Schneider, a former chief economist for Republicans on the House Ways and Means Committee and the deputy head of U.S. policy at Piper Sandler.A budget proposal unveiled this year by the Republican Study Committee, a conservative policy group within the House Republican conference, included plans to permanently extend the Trump tax cuts and to impose work requirements on federal benefits programs, in hopes of reducing federal spending on the programs and increasing the number of workers in the economy.“We know for a fact that federal spending continues to keep inflation high, which is why a top priority in next year’s Republican majority will be to root out waste, fraud and abuse of taxpayer money,” Representative Kevin Hern, Republican of Oklahoma, said in a statement. Mr. Hern, who helped devise the budget, called it “one of many proposals to address the dire situation we’re in.”As they eye the majority, top Republicans have suggested that they will consider an economically risky strategy to potentially force Mr. Biden to agree to spending cuts, including for safety-net programs. Representative Kevin McCarthy of California, who is the minority leader and is seen as the clear pick to be speaker should Republicans win control of the House, suggested to Punchbowl News this month that he would be open to withholding Republican votes to raise the federal borrowing limit unless Mr. Biden and Democrats agreed to policy changes that curb spending.How to use that leverage has divided Republicans. Some, like Representative Nancy Mace of South Carolina, who fended off a Trump-backed primary challenger, are supportive of that option.But other Republicans — particularly candidates laboring to present a more centrist platform in swing districts held by Democrats — have shied away from openly supporting cuts to safety-net programs.“Absolutely not,” Lori Chavez-DeRemer, a Republican and former mayor running in Oregon’s Fifth Congressional District, said when asked if she would support cuts to Medicare and Social Security as a way to rein in federal spending. “Cutting those programs is not where I, as a Republican, see myself. I want to make sure that we can fill those coffers.” More
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Fearing a New Shellacking, Democrats Rush for Economic Message
Democratic candidates, facing what increasingly looks like a reckoning in two weeks, are struggling to find a closing message on the economy that acknowledges the deep uncertainty troubling the electorate while making the case that they, not the Republicans, hold the solutions.For some time, the party’s candidates and strategists have debated whether to hit inflation head on or to heed warnings that any shift toward an economic message would be ending the campaign on the strongest possible Republican ground. Since midsummer, when the Supreme Court repealed Roe v. Wade, Democrats had hoped that preserving the 50-year-old constitutional right to an abortion and castigating Republican extremism could get them past the worst inflation in 40 years.That is looking increasingly like wishful thinking.On Monday, Democrats unveiled new messages that appeared to switch tacks, incorporating achievements of the past two years with expressions of sympathy on the economy and dire warnings for what Republicans might bring.Former Representative Steve Israel, who headed the House Democrats’ campaign arm in a strong cycle of 2012 and weak one in 2014, said the dispute over how to address voters’ economic distress was essentially being resolved in favor of trying to accomplish a political feat that he said would be the trickiest he has ever seen: Democrats would continue to hammer Republicans on abortion and their ties to former President Donald J. Trump to boost turnout among their core supporters, while simultaneously trying to win over undecided voters whose biggest concerns are inflation and crime.“There was a narrative at one point that this was a Roe v. Wade election,” said Representative Tom Malinowski of New Jersey, whose district, newly drawn to lean Republican, has made him one of the most endangered Democratic incumbents in the House. “I never thought it was going to be that simple.”On Friday, four veteran Democratic strategists published a piece in The American Prospect, the liberal magazine, that pleaded with Democrats to find a new message that acknowledges the pain of rising prices and answers voter concerns. To do that, they argued, candidates need to convey their legislative successes while setting up culprits other than themselves: Republicans who voted against popular measures like capping the price of insulin, and wealthy corporations that are jacking up prices and reaping more profits.Voters “want to know you understand what is going on in their lives,” the strategists wrote. “They want to know you are helping with their No. 1 problem and have a plan. They want to know the difference between Democrats and Republicans when they cast their votes.” The piece was written by Patrick Gaspard, president of the liberal Center for American Politics; Stanley Greenberg and Celinda Lake, veteran Democratic pollsters; and Mike Lux, a senior White House aide under President Bill Clinton.Ms. Lake, in an interview on Saturday, said Democratic strategists were “extremely concerned” that the wave of support the party saw over the summer was evaporating at the worst possible time. But she insisted there was time, with barely two weeks to go, to correct course.“A lot of candidates aren’t really clear about what the economic message is,” she said. “What we need to do is set up a more vivid contrast. People are getting more pessimistic about the economy.”To some Democrats, liberals and moderates alike, the reluctance of frontline candidates to talk up the party’s achievements has been maddening. Faiz Shakir, a longtime political adviser to Senator Bernie Sanders, the progressive mainstay from Vermont, called a campaign built around abortion and former President Donald J. Trump “political malpractice.”Representative Nancy Pelosi during a news conference on the Inflation Reduction Act.Shuran Huang for The New York TimesIn two years, the party has passed a trillion-dollar infrastructure bill, a generous tax credit for parents that brought child poverty to historic lows, legislation that made good on the popular, longstanding promise to allow Medicare to negotiate lower drug prices, and the biggest investment in clean energy in history — all achievements that could be framed as helping people cope with rising prices.An ad launched on Monday by a Democratic super PAC in the Minnesota district of moderate Representative Angie Craig makes that point. And Mr. Sanders pressed it on Sunday, on CNN’s “State of the Union,” saying Republicans have said little about what they would do, and what they have said — like forcing cuts to entitlements like Medicare and Social Security and extending Mr. Trump’s 2017 tax cuts — would be unpopular, make the problem worse, or both.The State of the 2022 Midterm ElectionsBoth parties are making their final pitches ahead of the Nov. 8 election.A G.O.P. Advantage: Republicans appear to be gaining an edge in the final weeks of the contest for control of Congress. Nate Cohn, The Times’s chief political analyst, explains why the mood of the electorate has shifted.Ohio Senate Race: Tim Ryan, the Democrat who is challenging J.D. Vance, has turned the state into perhaps the country’s unlikeliest Senate battleground.Losing Faith in the System: As democracy erodes in Wisconsin, many of the state’s citizens feel powerless. But Republicans and Democrats see different culprits and different risks.Secretary of State Races: Facing G.O.P. candidates who spread lies about the 2020 election, Democrats are outspending them 57-to-1 on TV ads for their secretary of state candidates. It still may not be enough.“They want to cut Social Security, Medicare and Medicaid at a time when millions of seniors are struggling to pay their bills,” Mr. Sanders said. “Do you think that’s what we should be doing? Democrats should take that to them.”But for the party in control of the White House and both chambers of Congress, finding an effective message will be difficult, if not impossible. Republicans are evincing no fears of any Democratic shifts.“Democrats are out of time and out of solutions when it comes to fixing the rising costs they handed voters — now they’re going to pay the price at the ballot box,” said Michael McAdams, a spokesman for the National Republican Congressional Committee, the campaign arm of House Republicans.In the 2010 midterms, then-President Barack Obama barnstormed the country with a message that Republicans had driven the country’s economy into a ditch, and Democrats had pulled the car out. Then voters delivered what Mr. Obama himself called a “shellacking,” giving Republicans 63 total seats in the House and seven in the Senate, the largest shift since 1948.David Axelrod, Mr. Obama’s chief political adviser, recalled telling the president-elect in 2008 that Democrats would face a reckoning in 2010 after two successive wave elections and the most dire financial crisis since the Depression. After Democrats passed a huge economic stimulus bill, other economic measures like legislation to help consumers trade in their “clunker” cars for more efficient models, and a landmark regulation of Wall Street, they could say they had made progress on the economy.“But people didn’t feel the car was out of the ditch yet,” Mr. Axelrod said, “and they were looking to the guy who was in there now.”The lesson of 2010 was not to avoid the subject but to acknowledge the pain and set up a choice. Two years later, with the economic shock of the financial crisis still lingering, the Obama campaign made fighting for the middle class the central message of a re-election bid against a Republican candidate, Mitt Romney, who was painted as the essence of the out-of-touch plutocrat.“It was never going to work to not talk about the economy,” Mr. Axelrod said. “That’s sort of like, ‘How was the play otherwise, Mrs. Lincoln?’”If voter anguish in 2022 is similar to 2010, the economic issues are different. Unemployment is at record lows in several states. The issue is more a shortage of workers than a shortage of jobs. Wage growth is robust. But inflation — which lends itself to an attendant fear of the future and pervasive sense of falling behind — is a particularly destabilizing force. It helped topple Liz Truss, the British prime minister, after only six chaotic weeks, and helped usher in an Italian government that descends from Mussolini’s fascism.Ms. Truss’s support collapsed after her conservative economic plan of tax cuts skewed to the rich sent financial markets in a tailspin. The British pound also sank to near record lows against the dollar, and economists warned of still worse inflation. Representative Ro Khanna, a liberal Democrat from California, said Democrats needed to harness that experience to point out that Republican leaders have a similar economic plan if they take control of Congress.“The Republicans are running on an explicit promise of extending Trump’s tax cuts,” he said. “We have to frame the election as a choice on the economy.”Mr. Khanna was campaigning for Democrats in South Carolina on Saturday. He said the party’s candidates needed to answer the inflation question by hammering home the argument that Republican fiscal policies translate to tax cuts for the wealthy and sending jobs overseas.“We’ve got to do a better job having a clear economic message,” Mr. Khanna said. “I don’t think we can say, ‘Woe is me. Gas prices are going up.’”But Republicans, out of power, with no responsibility for much of the legislation of the Biden era, have a ready answer, which they have used with success: All those “achievements” created the inflation problem, by stoking consumer demand at a time when supply could not keep up. The U.S. economy was not prepared for a rapid shift from fossil fuels, their argument goes, so Democratic efforts to address climate change sent gas prices soaring. And Democratic promises for still more government assistance will only keep prices rising.Senator Mike Lee, a Utah Republican in an unexpectedly competitive re-election fight, has taken to quoting the Nobel Prize-winning conservative economist Milton Friedman on inflation repeatedly: “Consumers don’t produce it. Producers don’t produce it. The trade unions don’t produce it. Foreign sheikhs don’t produce it. Oil imports don’t produce it. What produces it is too much government spending.”That may be oversimplified in today’s strange economy. Some price increases were triggered by supply chains snarled by the pandemic that created pent-up consumer demand after periods of confinement and shuttered factories and shipping industries that were slow to return to peak production. Tight energy supplies and ensuing gas price increases are far more attributable to the war in Ukraine than any domestic energy legislation. Inflation is a global problem that is worse in Europe and Britain than in the United States.A gas station in Wilkes-Barre, Pa.Aimee Dilger/ReutersBut most economists do believe some Democratic bills — especially the $1.9 trillion American Rescue Plan — exacerbated the problem. The $1,400 checks that most American households received in 2021 have been forgotten. Their contribution to an overheated consumer economy has not.The latest Republican attack ads hit inflation and economic uncertainty hard and lay the blame on Democratic malfeasance, not the complexities of international commerce and conflict.“Democrats spent two years completely ignoring the country’s single-most pressing issue because they have nothing to say. They know their policies made inflation worse and they own this economic tsunami,” said Dan Conston, head of the Congressional Leadership Fund, a powerful super PAC aligned with the House Republican leadership.Mr. Axelrod said the Democrats’ secret weapon could be their opponents. For all the campaign ads harping on economic issues, many Republican candidates are using extreme language to spotlight more contentious issues: national abortion legislation, denying the validity of the 2020 election, and impeaching President Biden. Given some of the loudest voices in the G.O.P. seem uninterested in economic struggles, voters may not see the opposition party as a credible alternative.But, Ms. Lake said, the Democrats need to make that case.“There’s time; there’s money,” she said. “We’re going to be spending tens of millions of dollars on advertising in the next two weeks, and there’s vulnerability on the Republican side, but only if we articulate the contrast.” More
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Liz Truss Resigns After 6 Chaotic Weeks, Igniting New Leadership Fight
LONDON — Prime Minister Liz Truss of Britain announced her resignation on Thursday, bringing a swift end to a six-week stint in office that began with a radical experiment in trickle-down economics and descended into financial and political chaos, as most of those policies were reversed.With her tax-cutting agenda in tatters, her Conservative Party’s lawmakers in revolt and her government in the hands of people who did not support either her or her policies, Ms. Truss, 47, concluded that she could no longer govern. She departs as the shortest-serving prime minister in British history.“Given the situation, I cannot deliver the mandate on which I was elected by the Conservative Party,” a grim Ms. Truss said, standing on the rain-slicked pavement outside 10 Downing Street, where only 44 days ago she greeted the public as Britain’s new leader.Ms. Truss said she would remain in office until the party chooses a successor, by the end of next week. That sets off an extraordinarily compressed, unpredictable scramble to replace her in a party that is both demoralized and deeply divided. Among the likely candidates is Boris Johnson, the flamboyant previous prime minister she replaced after he was forced out in a string of scandals.Only a day after declaring in Parliament, “I’m a fighter, not a quitter,” Ms. Truss bowed out after a hastily scheduled meeting on Thursday with party elders, including Graham Brady, the head of a group of Conservative lawmakers that plays an influential role in selecting the party leader.Graham Brady, leader of an influential group of Conservative lawmakers, following the resignation of Liz Truss as Prime Minister.Dan Kitwood/Getty ImagesIt was the most shocking jolt in a week of seismic developments that included the ouster of Ms. Truss’s chancellor of the Exchequer, Kwasi Kwarteng; the bitter departure of the home secretary, Suella Braverman; and a near melee in Parliament on Wednesday night, as cabinet ministers tried to force unruly Tory lawmakers to back the prime minister in a vote on whether to ban hydraulic fracking.The spectacle dramatized how Ms. Truss — only the third female prime minister, after Margaret Thatcher and Theresa May — had lost control of her party and government.By then, though, her mandate had already been shredded: her proposals for sweeping, unfunded tax cuts rattled financial markets because of fears they would blow a hole in Britain’s finances.That sent the pound into a tailspin that left it briefly near parity with the dollar, forced the Bank of England to intervene in bond markets to stave off the collapse of pension funds and sent mortgage interest rates soaring.The resulting chaos has left Britons frustrated and jaded, with many convinced the country is spinning out of control.“We are in an economic crisis, a political crisis, a food crisis — an everything crisis,” said Cristian Cretu, a gas engineer on a break from work. “Whoever is going to replace her, I don’t think they will make a difference.”The opposition Labour Party called for an immediate general election. But under British law, the Conservatives are not required to call one until January 2025.If enough Conservative lawmakers joined with the opposition, they could force an election, but with the party’s support collapsing in opinion polls, it is in their interests to delay any encounter with the voters. British political convention also allows them to change party leaders — and therefore the prime minister — using their own flexible rule book.Boris Johnson, the former prime minister who left office amid scandal only last month, is said to be considering a new run for the top job. Henry Nicholls/ReutersMs. Truss’s position was already shaky on Monday, when her newly appointed chancellor, Jeremy Hunt, announced that the government would undo the last vestiges of her tax proposals. As Mr. Hunt presented details of the reworked fiscal plan in Parliament, a silent Ms. Truss sat behind, a faraway smile on her face.For Britain, it is another chapter in the political convulsions that followed its vote to leave the European Union in 2016. The country will soon have its fifth prime minister in six years. Ms. Truss is the third consecutive leader to be deposed by the Conservative Party, also known as the Tory Party, which now appears to have devolved into warring factions and has fallen as many as 33 percentage points behind the opposition Labour Party in polls.The political upheaval also comes only a month after Britain buried Queen Elizabeth II, who reigned for seven decades and acted as an anchor for the country. Among the queen’s last official duties was greeting Ms. Truss at Balmoral Castle after she had won the party leadership contest. On Thursday, Ms. Truss said she had informed King Charles III of her decision to step down.The Conservatives announced rules for the new leadership contest, including a minimum threshold of 100 nominations from lawmakers, which will limit the number of candidates to a maximum of three.From a shortlist of two, selected by lawmakers, Conservative Party members will then vote online to choose the victor, with the goal of avoiding the prolonged, multistage campaign last summer that resulted in Ms. Truss. In fact, the contest might not get that far: if only one candidate passes the threshold of 100 nominations, or if the second-place contender drops out, there will be a decision on Monday.“In recent leadership contests, they have chosen someone who is manifestly unsuitable for the job,” said Tim Bale, a professor of politics at Queen Mary University of London. “It is unlikely anyone can rescue them electorally, but there are people who can walk into No. 10 and do the job of prime minister intellectually, emotionally and practically.”Still, the convulsions of recent days have exposed how divided the Conservative Party is, after 12 exhausting years in power, and how difficult it will be for Ms. Truss’s successor to unite it.Rishi Sunak, the former chancellor of the Exchequer who lost out to Ms. Truss in this summer’s leadership contest, is considered a strong candidate to succeed her.Andy Buchanan/Agence France-Presse — Getty ImagesRishi Sunak, a former chancellor who ran against Ms. Truss last summer and warned that her proposals would produce chaos, should be in the pole position, having led the Treasury and performed well under pressure in the leadership campaign. But he lost that contest largely because many party members blamed him for bringing down Mr. Johnson, from whose cabinet he resigned.“The obvious candidate is Rishi Sunak,” Professor Bale said. “The question is whether they can forgive him. The situation is now so extreme that people might be prepared to forgive him his supposed sins.”That is far from clear, however, because Mr. Sunak is also distrusted on the right of the party and among hard-core Brexit supporters in Parliament. His leadership would be hard to stomach for some who opposed him, including the business secretary, Jacob Rees-Mogg, who once refused to deny reports that he had described Mr. Sunak’s policies, which included tax increases, as “socialist.”Supporters of Mr. Johnson, who is reported to be considering a run at his old job, argue that because of his landslide election victory in 2019, he has a mandate to lead without holding another general election. Under the hashtag #bringbackboris, one of his supporters, James Duddridge, wrote on Twitter: “I hope you enjoyed your holiday boss. Time to come back. Few issues at the office that need addressing.”But restoring him would be highly risky, given the circumstances of his forced resignation in July and the fact that he remains a polarizing figure among voters. Mr. Johnson is also being investigated by a parliamentary committee over whether he misled the House of Commons about parties held in Downing Street that broke pandemic rules.Even if Mr. Johnson is exonerated, it will remind Britons of the serial scandals that led lawmakers to oust him. And the committee could recommend Mr. Johnson’s expulsion or suspension from Parliament — a sanction that might mean his constituents get a vote on whether to kick him out of Parliament altogether.The party’s ideological divisions were laid bare by Ms. Braverman in a blistering letter written after she was fired, ostensibly for breaching security regulations in sending a government document on her personal email. She accused Ms. Truss of backtracking on promises and going soft on immigration.While the government has reversed Ms. Truss’s tax cuts, the economy is still suffering from inflationary pressures that sent food prices soaring by 14 percent last month.Sam Bush for The New York TimesMs. Braverman’s parting shot illustrated the resistance from people on the right to what they see as the growing influence of Mr. Hunt, a moderate who voted against Brexit and was a supporter and ally of Mr. Sunak. Mr. Hunt, who has run twice for party leader, said he would not be a candidate this time.Were the Conservatives to allow Downing Street to fall into the hands of another untested candidate, outside the mainstream, like Ms. Braverman or perhaps Kemi Badenoch, who currently serves as the secretary of international trade, there could be renewed instability in the financial markets.Penny Mordaunt, the leader of the House of Commons who finished third in the contest last summer, appears well placed to straddle the divide. She is a good communicator, but is untested at the top level of government.Another option might be a candidate with little ideological baggage, like Ben Wallace, the defense secretary, or Grant Shapps, the new home secretary. But Mr. Wallace decided against running earlier this year, saying he did not want the job enough. Mr. Shapps concluded that he did not have the support to win.Whoever is chosen will inherit a forbidding array of problems, from 10.1 percent inflation and soaring energy prices to labor unrest and the specter of a deep recession. The new leader will have to make cuts to government spending that are likely to be resisted by different coalitions of Conservative lawmakers.On Monday, Mr. Hunt said the government would end its huge state intervention to cap energy prices in April, replacing it with a still-undefined program that he said would promote energy efficiency. That could prove unpopular, increasing uncertainty for households facing rising gas and electricity prices.While the government has abandoned Ms. Truss’s tax cuts — in one of the most striking policy reversals in modern British history — the chaos her program unleashed in the markets has left lingering damage. The rise in interest rates has made borrowing more expensive for the government, economists said, which will produce pressure for even deeper spending cuts.Despite the Conservative Party’s internal feuds, Professor Bale said he believed it was not inherently ungovernable, so long as it makes the right choice. As recent history has shown, the stakes for the party are extremely high.“The Conservative Party is an incredibly leadership-dominated party,” he said, “which means that if you get the choice of leader wrong, you’re in serious trouble.”Euan Ward More
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Elections Approaching, Erdogan Raises the Heat Again With Greece
Turkey’s president suggested that troops “may suddenly arrive one night” in Greece. With inflation rampant and the lira sinking, a manufactured crisis might be just the thing he needs.ISTANBUL — Last week at a closed dinner in Prague, Prime Minister Kyriakos Mitsotakis of Greece was addressing 44 European leaders when President Recep Tayyip Erdogan of Turkey interrupted him and started a shouting match.Before stalking from the room, Mr. Erdogan accused Mr. Mitsotakis of insincerity about settling disputes in the eastern Aegean and blasted the European Union for siding with its members, Greece and Cyprus, according to a European diplomat and two senior European officials who were there.While the others, flabbergasted and annoyed, finished their dinners, Mr. Erdogan fulminated at a news conference against Greece and threatened invasion. “We may suddenly arrive one night,” he said. When a reporter asked if that meant he would attack Greece, the Turkish president said, “Actually you have understood.”The outburst was only the latest from Mr. Erdogan. As he faces mounting political and economic difficulties before elections in the spring, he has been ramping up the threats against his NATO ally since the summer, using language normally left to military hawks and ultranationalists.While few diplomats or analysts are predicting war, there is a growing sense among European diplomats that a politically threatened Mr. Erdogan is an increasingly dangerous one for his neighbors — and that accidents can happen.Mr. Erdogan needs crisis to buoy his shaky standing at home after nearly 20 years in power, a diplomat specializing in Turkey said, requesting anonymity. And if he is not provided one, the diplomat said, he may create one.The rising tensions between Greece and Turkey, both NATO members, now threaten to add a difficult new dimension to Europe’s efforts to maintain its unity in the face of Russia’s war in Ukraine and its accumulating economic fallout.Mr. Erdogan met President Vladimir V. Putin of Russia in Kazakhstan on Thursday.Pool photo by Vyacheslav ProkofyevAlready, Mr. Erdogan has made himself a troublesome and unpredictable ally for his NATO partners. His economic challenges and desire to carve out a stable security sphere for Turkey in a tough neighborhood have pushed him ever closer to President Vladimir V. Putin of Russia.Mr. Erdogan has earned some shelter from open criticism by allies because of his efforts to mediate between Russia and Ukraine, especially in the deal to allow Ukrainian grain exports.But he has refused to impose sanctions on Russia and continues to get Russian gas through the TurkStream pipeline, while asking Moscow to delay payment for energy.On Thursday, Mr. Erdogan met Mr. Putin in Kazakhstan, where they discussed using Turkey as an energy hub to export more Russian gas after the pipelines to Germany under the Baltic Sea have been damaged.But it is the escalating rhetoric against Greece that is now drawing special attention.Sinan Ulgen, the director of EDAM, an Istanbul-based research institution, said that of course there was an electoral aspect to Mr. Erdogan’s actions. But there were also deep-seated problems that foster chronic instability and dangerous tensions.“Turkey and Greece have a set of unresolved bilateral disputes,” he said, “and this creates a favorable environment whenever a politician in Ankara or Athens wants to raise tensions.”The two countries nearly went to war in the 1970s over energy exploration in the Aegean, in 1995-96 over disputed claims over an uninhabited rock formation in the eastern Mediterranean, and in 2020, again over energy exploration in disputed waters. “And now we’re at it again,” Mr. Ulgen said. “And why? Because of elections in Turkey and Greece.”Mr. Mitsotakis is also in campaign mode, with elections expected next summer, damaged by a continuing scandal over spyware planted in the phones of opposition politicians and journalists. As in Turkey, nothing appeals to Greek patriotism more than a good spat with an old foe.A Turkish drill in August off Mersin, Turkey. Turkey and Greece nearly went to war in 2020 over Turkish energy exploration in disputed waters.Adem Altan/Agence France-Presse — Getty ImagesHe has sought to appear firm without escalating. Confronted at the dinner in Prague, Mr. Mitsotakis retorted that leaders should solve problems and not create new ones, that he was prepared to discuss all issues but could not stay silent while Turkey threatened the sovereignty of Greek islands.“No, Mr. Erdogan — no to bullying,” he said in a recent policy speech. He told reporters that he was open to talks with Mr. Erdogan despite the vitriol, saying he thought military conflict unlikely. “I don’t believe this will ever happen,” he said. “And if, God forbid, it happened, Turkey would receive an absolutely devastating response.”He was referring to Greek military abilities that have been significantly bolstered recently as part of expanded defense agreements with France and the United States.Mr. Mitsotakis has also taken advantage of American annoyance with Mr. Erdogan’s relations with Russia and his delay in approving NATO enlargement to Finland and Sweden to boost ties with Washington. In May, he was the first Greek prime minister to address Congress and urged it to reconsider arms sales to Turkey.He has said Greece will buy F-35s, while Turkey, denied F-35s because of its purchase of a Russian air-defense system, is still pressing to get more F-16s and modernization kits, using NATO enlargement as leverage.But Mr. Erdogan is facing considerable problems at home, making tensions with Greece an easy and traditional way to divert attention and rally support.Mr. Erdogan is presiding over a disastrous economy, with inflation running officially at 83 percent a year — but most likely higher — and the currency depreciating. Turkish gross domestic product per capita, a measure of wealth, has dropped to about $7,500 from more than $12,600 in 2013, based on Turkey’s real population, which now includes some four million Syrian refugees, according to Bilge Yilmaz, a professor at the Wharton School of the University of Pennsylvania.Mr. Erdogan is presiding over a disastrous economy, with inflation running officially at 83 percent a year.Yasin Akgul/Agence France-Presse — Getty ImagesMr. Erdogan has kept cutting interest rates against conventional economic advice. “We need to reverse monetary policy,” said Mr. Yilmaz, who is touted as a likely finance minister should Mr. Erdogan lose the election. “A strong adjustment of the economy will not be easy.”There is also growing popular resentment of the continuing cost of the refugees, who were taken in by Mr. Erdogan as a generous gesture to fellow Muslims in difficulty.Still, Mr. Erdogan is thought to have a solid 30 percent of the vote as his base, and government-controlled media dominate, with numerous opposition journalists and politicians jailed or silenced.In a report on Wednesday, the European Union criticized “democratic backsliding” and said that “in the area of democracy, the rule of law and fundamental rights, Turkey needs to reverse the negative trend as a matter of priority with addressing the weakening of effective checks and balances in the political system.”Still, at this point, analysts think Mr. Erdogan could lose his majority in Parliament and might just lose the presidential election itself.That is an analysis firmly rejected by Mr. Erdogan’s Justice and Development Party, the AKP, said Volkan Bozkir, a former diplomat and member of Parliament, who says flatly that Mr. Erdogan and his party will be re-elected.Constantinos Filis, the director of the Institute of Global Affairs at the American College of Greece, believes that Mr. Erdogan is trying to keep all options open, “casting Greece as a convenient external threat and creating a dangerous framework within which he could justify a potential move against Greece in advance.”As for Washington, he said, they are telling Mr. Erdogan: “Thank you for what you did in Ukraine, of course you haven’t imposed sanctions on Russia, but OK, you’re in a difficult position, strategically, diplomatically, economically — but don’t dare to do something in the Aegean or the Eastern Mediterranean that will bring trouble to NATO.”Migrants at the border between Turkey and Greece in March 2020. There is growing popular resentment of the continuing cost of the refugees in Turkey, who include four million Syrians.The New York TimesMore likely, Mr. Filis said, Mr. Erdogan would again send migrants toward Europe, or launch another energy exploration in disputed areas off Cyprus or Crete, which produced near clashes in 2020, or intercept a Greek ship transporting military equipment to one of the Aegean Islands.Mr. Ulgen also does not expect armed conflict but would not be surprised. “It could happen; it’s not something we can rule out anymore,” he said. “But if it happens, it will be small-scale.”Niki Kitsantonis More
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Lessons From Liz Truss’s Handling of U.K. Inflation
The sharp policy U-turn by Liz Truss, Britain’s prime minister, reveals the perils of taking the wrong path in the fight against scalding inflation.Government leaders in the West are struggling with rising inflation, slowing growth, and anxious electorates worried about winter and high energy bills. But Liz Truss, Britain’s prime minister, is the only one who devised an economic plan that unnerved financial markets, drew the ire of global leaders and the public and undermined her political standing.On Friday, battered by savage criticism, she retreated. Ms. Truss fired her top finance official, Kwasi Kwarteng, for creating precisely the package of unfunded tax cuts, billion-dollar spending programs and deregulation that she had asked for.She reinstated a scheduled increase in corporate taxes to 25 percent from 19 percent, a rise she had previously opposed. That announcement came on top of backtracking last week on her proposal to eliminate the top 45 percent income tax on the highest earners. The prime minister, in office a little over five weeks, also promised that spending would grow less rapidly than proposed, although no specifics were offered.The drama is still playing out, and it’s unclear if the Truss government will survive.In the United States, President Biden, while waging his own political battles over gas prices and inflation, has not proposed anything like the kind of policies that Ms. Truss’s government attempted, nor have any other leaders in Europe.Still, for European governments whose economies are suffering greatly from shocks and energy price surges caused by Russia’s war in Ukraine, there are timely lessons from the debacle playing out in London.One of the strongest was delivered early on by the International Monetary Fund: Don’t undermine your own central bankers. The I.M.F., which usually reserves such scoldings for developing nations, on Thursday doubled down on its message. “Don’t prolong the pain,” Kristalina Georgieva, the managing director, admonished.How to blunt the impact of inflation on the most vulnerable without further stoking inflation is the dilemma that every government is confronting.The Bank of England in London has aggressively tried to slow the sharp rise in prices by slowing the British economy.Alberto Pezzali/Associated Press“That is the question of the hour,” said Eswar Prasad, an economist at Cornell University who was attending the annual meetings of the World Bank and I.M.F. in Washington this week.Tension between the fiscal spending policies proposed by a government and the monetary policies controlled by central banks is not unusual. At the moment, though, central bankers are engaged in delicate policy maneuvers in the fight against a level of inflation not seen in decades. With the rate in Britain nearing 10 percent, the Bank of England has moved aggressively to slow down climbing prices through a series of interest rate increases aimed at crimping consumer and business spending.Any expansion of government spending is going to interfere with that aim to some degree, but Ms. Truss’s plan was far too big and too ill defined, Mr. Prasad said.“Measures to help households hit hard by energy increases, by themselves, would not have created that much of a stir,” he said. Many other countries have proposed exactly that. And the European Union has proposed a windfall tax on energy profits to help finance those subsidies.Ms. Truss, instead of coming up with a way to pay for energy assistance, pushed to eliminate a corporate tax increase and cut income taxes for the wealthiest segment of the population. The result was a reduction in government revenue and a ballooning of Britain’s debt.“Overall, the package did not have much clarity in terms of how it would support the economy in the short run without raising inflation,” Mr. Prasad said.By contrast, Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, cited the way governments and central banks worked in tandem when the pandemic struck in 2020 to keep economies from collapsing, issuing vast amounts of public debt.“Central banks printed every single dollar, euro and pound that governments spent” to support households and businesses because of the Covid crisis, Mr. Vistesen said. But now the circumstances have changed, and inflation is setting economies aflame.The actions of the Federal Reserve in the United States illustrate the switch central banks have made: In the harrowing early weeks of the global outbreak of the coronavirus, the Fed embarked on an extraordinary program to stimulate the economy and stabilize markets. This year, the Fed has been swiftly raising interest rates in a bid to slow growth.Both the United States and eurozone countries have somewhat more wiggle room than Britain, because the dollar and the euro are much more widely used around the world as currencies held in reserve than the British pound.Kwasi Kwarteng, Britain’s former chancellor of the Exchequer, left 11 Downing Street after Ms. Truss fired him on Friday.Kirsty Wigglesworth/Associated PressEven so, European governments can help households and businesses get through an energy crisis, Mr. Vistesen said, but they can’t embark on an open-ended spending spree.They also need to take account of what is happening in other economies. The richest countries that make up the Group of 7 are essentially part of the same “monetary and fiscal convoy,” said Will Hutton, president of the Academy of Social Sciences. By championing a Thatcher-era blend of steep tax cuts and deregulation, he said, the Truss government strayed too far from the rest of the flotilla and the economic mainstream.The adherence to 1980s-era trickle-down verities also revealed the risks of sticking with outdated policies in the face of changing circumstances, said Diane Coyle, a public policy professor at the University of Cambridge.“The situation in 1979 was very different,” Ms. Coyle said. “There were sclerotic high taxes and an overregulated economy, but not anymore.” Today, taxes in Britain are lower, and the economy is less regulated than the average member of the Organization for Economic Cooperation and Development, a club of 38 major economies.“The character of the economy has changed,” she said. “Public investment in research and skills are more important.”In that sense, what was missing from Ms. Truss’s economic plan was as important as what was included. And what Britain is lacking, said Mariana Mazzucato, an economist at University College London, is a visionary public investment program like the trillion-dollar climate and digitalization plans adopted by the European Union or the climate and infrastructure program in the United States.A rate of Inflation nearing 10 percent in Britain has affected the price of groceries and how people spend their money.Alex Ingram for The New York Times“If you don’t have a growth plan, an industrial strategy innovation policy,” Ms. Mazzucato said, “then your economy won’t expand.”Both Ms. Mazzucato and Ms. Coyle emphasized that Britain had some specific economic handicaps that predated the Truss administration, including the 2016 vote to exit the European Union, a stubborn lack of productivity, anemic business investment, and lagging research and development.Still, Ms. Coyle offered some advice that referred pointedly to Ms. Truss. “I think the main lesson is: Don’t shoot yourself in the foot.” More
