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      Rising Energy Prices and High Inflation: The Economic Issues Facing Liz Truss

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      For the past eight weeks through the Conservative Party’s leadership contest, the severity of Britain’s economic troubles only worsened. The new prime minister, Liz Truss, will be greeted with a long list of demands for rapid and aggressive support to alleviate the pain caused by the rising cost of living.Looming over the new government is the specter of stagflation — an unpleasant mix of stagnant economic growth and high inflation. Consumer prices are rising at their fastest pace in four decades as the rate of inflation exceeds 10 percent and is expected to keep climbing. Meanwhile, the economy contracted in the second quarter, and the Bank of England is forecasting a long recession to begin later this year as wages lag and household budgets are squeezed by rising food and energy costs. Household incomes, adjusted for inflation and taxes, are predicted to fall sharply this year and next, in the worst decline in records dating back to the 1960s, the central bank said.Britain caps household energy bills, but that limit will increase by 80 percent beginning next month. And there are calls for urgent action to help low-income households as it becomes increasingly accepted that a relief package laid out in May is inadequate. Liz Truss said on Sunday that should introduce a package to help people with energy bills within a week of taking office. Small businesses — especially energy-intensive ones, such as pubs and restaurants — are warning of widespread closures over the winter as companies won’t be able to afford their energy bills. The pub industry said there needs to be “swift and substantial” government intervention to avoid large-scale job losses.There is also a growing number of labor strikes, as workers across industries demand pay raises in line with the cost of living. Among those walking out or threatening to are port workers, nurses, teachers, train drivers and mail service personnel.Beyond these immediate problems, Britain also has many long-running economic challenges to overcome. How will the new government try to make a success of Brexit, which so far has made trading with Britain’s closest neighbors more cumbersome and costly? Can the government close the inequality gap between London and the rest of the country? Amid an energy crisis, will the government get on track to meet its legally binding targets to reach net zero carbon emissions?The gloomy economic prospects for Britain are clear in financial markets. The pound dropped 4.5 percent against the U.S. dollar in August, its worst month in nearly six years, and is now trading at $1.15. It’s at its lowest level since March 2020, and approaching the lowest since 1985. The price of British government bonds has dropped as investors turn away from British assets and expect the central bank to need to raise interest rates sharply to rein in inflation. More

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      Think the Economy Is Hard to Predict? Try the Midterms.

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      The overturning of political norms is testing the limits of an established and generally dependable forecasting model that relies solely on economics.Based on the economy alone, Democrats face a big problem in the midterm elections.Inflation has been extremely high and economic growth has been weak or even negative. That is a toxic political combination — bad enough for the Democrats to lose the House of Representatives by a substantial margin.That, at least, is the forecast of an econometric model run by Ray Fair, a Yale economist. He has used purely economic variables to track and predict elections in real time since 1978, with fairly good results, which he shares with his students and which are available on his website for anyone who wants to examine the work.The party in power always starts off with a handicap in midterm elections, and a bad economy makes matters worse, Professor Fair said in an interview. “At the moment, the Democrats definitely have an uphill climb.”Yet Professor Fair acknowledges that his model can’t capture everything that is going on in the country.While his analysis shows that the Democrats have fallen into an increasingly deep hole as the year has gone on, prediction markets and public opinion polls are more upbeat for the Democrats right now, and show a surge that began in late June.Eric Zitzewitz, a Dartmouth professor who has studied prediction markets extensively, says the improved odds for the Democrats may be linked to an important development beyond the economy: the Supreme Court’s decision to overturn Roe v. Wade.The power of the economyNo one would question whether economic conditions have a major influence on politics.But Professor Fair’s work goes further than that. In his book “Predicting Presidential Elections and Other Things,” and in a series of papers and online demonstrations, he has shown that the economy is so powerful that it explains the broad outcome of most national elections since 1916. His relentlessly economic approach does not include any consideration whatsoever of the staples of conventional political analysis: the transcendent issues of the day, the personalities of the candidates or the tactics employed by their campaigns.This year, as high inflation has persisted and economic growth has slowed, he finds that the electoral prospects for the Democrats have worsened. Based on data through July, he estimates that Democrats will get only 46.70 percent of the raw national vote for congressional candidates in November.How this projection translates into results for individual congressional seats is beyond the scope of Professor Fair’s grand experiment.“That’s not what this model is built to do,” he said. “I leave that to the political scientists. But I think the model is showing that, because of the economy, the odds aren’t good for the Democrats holding the House of Representatives.”More Coverage of the 2022 Midterm ElectionsLiz Cheney’s Lopsided Loss: The Republican congresswoman’s defeat in Wyoming exposed the degree to which former President Donald J. Trump still controls the party’s present — and its near future.2024 Hint: Hours after her loss, Ms. Cheney acknowledged that she was “thinking” about a White House bid. But her mission to thwart Donald J. Trump presents challenges.The ‘Impeachment 10’: With Ms. Cheney’s defeat, only two of the 10 House Republicans who voted to impeach Mr. Trump remain.Alaska Races: Senator Lisa Murkowski and Sarah Palin appeared to be on divergent paths following contests that offered a glimpse at the state’s independent streak.Something missingYet, as Professor Fair readily acknowledges, his model’s single-minded exclusion of noneconomic factors inevitably misses some important things.In the 2016 presidential election, for example, it projected that Hillary Clinton would lose the popular vote to Donald J. Trump. She won the popular vote but lost the presidency in the Electoral College.“It’s possible,” he said, “that some of that was Trump’s personality, and that the model couldn’t pick that up.”Something similar may have happened in 2020. The model estimated that Joseph R. Biden Jr. would receive only 47.9 percent of the popular vote but he actually got 52.27 percent. In both cases, Professor Fair said, “Trump did not do as well as he was predicted to do by the model.”The model’s singular focus may be unable to adequately account for what Professor Fair calls “the Trump effect.” That shorthand encompasses the array of norm-shattering behaviors and issues associated with President Trump and his adherents, including the Jan. 6 insurrection; Mr. Trump’s denial of President Biden’s election win in 2020; and the decision of the Supreme Court, with three Trump appointees, to overturn Roe v. Wade, which had been the law of the land for 50 years.What prediction markets sayIn theory, the prices in perfectly efficient markets synthesize the knowledge of each participant, making them better at assessing complicated issues than any individual can. But perfect conditions don’t exist for any market on earth and certainly not for prediction markets. Still, Professor Zitzewitz says these markets are highly informative.He pointed out that as recently as June 23, PredictIt, a leading prediction market, gave the Republican Party a 76 percent chance of taking the House of Representatives and the Senate from the Democrats in November.But the next day, June 24, the Supreme Court overturned Roe v. Wade. By June 30, the probability of a Republican sweep, calculated from bets placed on the PredictIt site, dropped to 60 percent. They were down to 39 percent on Thursday, with a higher probability, 47 percent, given to a different outcome: Democratic control of the Senate and a Republican victory in the House.Public opinion polls appear to have moved in a similar direction. The average of the polls tracked by Real Clear Markets has shifted from total Republican dominance to a virtual dead heat in the generic congressional ballot. On the other hand, Mr. Biden’s job rating in those polls is still awful, with nearly 16 percent more people disapproving of his performance than approving of it.Did the Supreme Court ruling shift the odds for the midterms? Did the Jan. 6 hearings swing public opinion? Has a string of legislative victories added luster to the Biden aura and moved some voters toward Democrats?It’s impossible to prove cause and effect for any of these things.Economic anomaliesIt is conceivable that the unique economic situation is muddling the projections in Professor Fair’s model.Gross domestic product and the inflation rate are the only economic factors the model uses, and may not be adequate for analyzing the state of the economy now, with the pandemic and Russia’s war in Ukraine causing disruptions around the globe. Both the G.D.P. and inflation numbers for the United States are bleak and the Federal Reserve is raising interest rates, giving rise to speculation that the country is heading into a recession or is already in one.But other metrics, like gross domestic income and the unemployment rate, have been more positive. If the economy turns out to be in better shape than the core G.D.P. and inflation data indicate, the vote projections for the incumbent Democrats would improve, and they would worsen for the Republicans.Then again, Professor Fair said, “The economy and the political situation are always unique.”Reality is recalcitrant. Human behavior never fits entirely into any model or market yet invented.It’s worth knowing as much as you can about the underlying factors, but they come down to people. I find that reassuring.In the end, elections depend on the voters coming out and the public as a whole respecting the results. Astonishingly, in 2022, that basic civics lesson needs reinforcement. The legitimacy of the 2020 election is still under attack.So, remember, whatever the models, the markets, the polls, the pundits or the candidates say, the future is in your hands. When Election Day comes around, it’s more important than ever to get out and vote, and to make sure your vote counts. More

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      Finally, Some Good News on Inflation

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      This is not the end of inflation. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.On Wednesday, the Bureau of Labor Statistics reported something we haven’t seen since the depths of the pandemic recession: a month without inflation. That is, the average price of the goods and services consumers buy was no higher (actually slightly lower) in July than it was in June.Before I get to what the latest inflation numbers mean, two notes on reactions to the report.First, there is absolutely no reason to question the numbers. There were many advance indications that this report, and probably the next few reports, would show a sharp drop in inflation. In fact, I wrote about that last week. It’s not just falling gasoline prices; business surveys point to declining inflation and supply chain problems are easing. Zero was a somewhat lower number than most observers expected, but not wildly so.Second, the enraged reaction of Republicans to the report came as something of a surprise, at least to me — not that it happened, but the form their outrage took. I expected them to accuse the Biden administration of cooking the books. Instead, most of the flailing seemed to involve a failure to understand the difference between monthly and annual numbers.When President Biden declared, accurately, that we had zero inflation in July, many on the right accused him of lying, because prices in July 2022 were 8.5 percent higher than they were in July 2021. Do they really not understand the difference? To be fair, sloppy business reporting may have contributed to their confusion — I saw many headlines to the effect that “inflation was 8.5 percent in July.” But the more fundamental issue, surely, is that it’s difficult to get people to understand something when their sloganeering depends on their not understanding it.OK, but what about the substantive implications of the Big Zero?Unfortunately, one month of zero inflation doesn’t mean that the inflation problem is solved. Economists have long known that you get a much better read on underlying inflation if you strip out highly volatile prices — normally food and energy, but there are a variety of measures of core inflation, and all of them are still unacceptably high. That’s a clear indication that the economy is running too hot. The Federal Reserve has been raising interest rates to cool things down, and nothing in Wednesday’s report should or will induce the Fed to change course.The Fed might, however, take some comfort from a different report, released Monday: the New York Fed’s monthly Survey of Consumer Expectations, which showed “substantial declines in short-, medium- and longer-term inflation expectations.”Ever since prices took off last year, Fed officials have been concerned that inflation might become entrenched. What they mean is that businesses and consumers might come to believe that large price increases are the new normal, making inflation self-perpetuating, and that getting inflation back down would require putting the economy into a severe, extended slump. That’s what most economists think happened in the 1970s, and it’s not an experience anyone wants to repeat.The good news is that there doesn’t seem to be any entrenching going on. Public expectations of future inflation are falling, not rising; financial markets also seem to anticipate much lower inflation than we’ve seen over the past year.Despite this good news, the Fed will surely keep raising rates until it sees clear evidence that underlying inflation is coming down. But it has some breathing room to be less aggressive than it might otherwise have been, waiting to see how the economic situation develops.Overall, falling inflation probably won’t have much effect on economic policy. It might, however, have big political implications.The truth, although Republicans go feral when you point it out, is that Joe Biden has presided over a huge jobs boom. Yet he has gotten no credit for that boom, possibly in part because many Americans don’t know about it, but largely because voters are focused on inflation — especially the fact that prices have risen faster than wages, reducing families’ purchasing power.Now at least that part of the story has gone into reverse. Wages are still rising fast, which is actually one reason to believe that underlying inflation remains high. But for now, at least, inflation has slowed, so workers will be seeing significant real wage gains. Indeed, average real wages rose half a percentage point in July alone.Hence G.O.P. outrage over accurate reporting on July’s inflation numbers. Republicans had been counting on high inflation, and high gas prices in particular, to deliver big gains for their party in the midterm elections. Suddenly, however, the economic facts have a liberal bias: Gas prices are plunging, inflation is down, and real wages are up.Will these facts make a difference in November? I have no idea. But the current hysteria on the right shows that Republicans are worried that they might.The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: letters@nytimes.com.Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram. More

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      Biden’s Remarkable Summer

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      Media narratives are driven by trajectory.Things get better or worse. People rise and fall. Maybe there is an upstart sensation who threatens the establishment. Maybe there is a spectacular fall from grace. Maybe there is a comeback. Regardless of the story, the direction of movement is what matters.Joe Biden got caught in one of those narratives: that things were going badly and people were losing confidence. Then, of course, the polls backed up that narrative, which provided a patina of proof.But the truth is that news narratives and polls are symbiotic. The narratives help shape what people believe, which is then captured by the polls, and those polling results are then fed back into news narratives as separate, objective and independent fact.“Joe Biden can’t catch a break” was a neat narrative. Every new disappointing data point fit snugly within it. But reality doesn’t play by media rules. It is often much more nuanced.As the legendary football coach Lou Holtz once put it: “You’re never as good as everyone tells you when you win, and you’re never as bad as they say when you lose.”Biden has had some bad months, to be sure, but there is no way to get around the fact the last month or so has been stellar for the administration.On the economic front, as of Wednesday, gas prices had fallen for 50 consecutive days, down 86 cents from the record average high of $5.02 on June 14, according to CNN. The jobs market has also shown incredible resilience. Friday’s jobs report alone far outpaced expectations.There are challenges. According to the Bureau of Labor Statistics, inflation increased “9.1 percent for the 12 months ending June, the largest 12-month increase since the period ending November 1981.” This doesn’t invalidate that Biden has had a good month; it only underscores the complexities of any news story.On the legislative front, in June, Biden signed the most significant federal gun safety legislation in nearly 30 years. Two weeks ago, his big spending bill, Build Back Better, which everyone thought was dead, was resurrected in the trimmed down form of the Inflation Reduction Act. Now, all Senate Democrats have gotten behind the bill and it has passed in that body. These developments don’t erase legislative disappointments like the failure of the voter protection bill or the police reform bill, but they are victories nonetheless.There are foreign policy wins, like the killing of the Al Qaeda leader Ayman al-Zawahri in Afghanistan, and the overwhelming vote in the Senate in favor of expanding NATO to include Finland and Sweden, a direct reaction to Russia’s invasion of Ukraine. And the Russians have suggested that they are open to discussing a prison swap to free Brittney Griner and Paul Whelan, both of whom are still being held in Russian custody. Here, again, there are challenges. For instance, tensions are heating up with China, particularly after a visit to Taiwan by the House speaker, Nancy Pelosi.Then, there is the uber issue of the Supreme Court striking down the right to an abortion. This was a gutting disappointment to liberals, and many have accused the White House of not reacting strongly enough.But it appears that the issue has roused some otherwise disinterested or dispassionate voters and may help Democrats to hold off a massive wave of Republican wins in the midterms. We need look no further than Kansas, a state that voted strongly for Trump in 2020, but that last week voted even more strongly to keep the right to an abortion in the state Constitution.Biden’s string of victories may not yet be enough to shift the narrative about him from spiraling to rebounding, but a fair read of recent events demands some adjustment.The White House must also shift its messaging, from defensive to offensive. I’ve never truly bought the argument that Biden’s polling was bad because he simply wasn’t doing enough to tout his accomplishments. There were some periods where the disappointments actually seemed to carry more weight than his achievements.But that’s not the case now, and the administration must seize this moment, and not be shy about shouting about its wins.This is one area where Donald Trump succeeded: boasting. When he was campaigning in 2016, he claimed that if he was elected, people might even “get tired of winning.” As he put it, people would say: “Please, please, it’s too much winning. We can’t take it anymore. Mr. President, it’s too much.” To which he said he would respond: “No it isn’t. We have to keep winning. We have to win more.”He would go through his term bragging about how anything that happened on his watch was the biggest and best.We now know that the Trump presidency was a disaster that nearly destroyed the country, but, if a failure like Trump can crow about all he did, even when the evidence wasn’t there, then surely Biden can find a way to do a little crowing of his own, particularly during one of the most successful stretches of his presidency.Biden, you did it. Boast about it.The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: letters@nytimes.com.Follow The New York Times Opinion section on Facebook and Twitter (@NYTopinion), and Instagram. More

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      As Latin America Shifts Left, Leaders Face a Bleak Reality.

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      All six of the region’s largest economies could soon be run by presidents elected on leftist platforms. Their challenge? Inflation, war in Europe and growing poverty at home.BOGOTÁ, Colombia — In Chile, a tattooed former student activist won the presidency with a pledge to oversee the most profound transformation of Chilean society in decades, widening the social safety net and shifting the tax burden to the wealthy.In Peru, the son of poor farmers was propelled to victory on a vow to prioritize struggling families, feed the hungry and correct longstanding disparities in access to health care and education.In Colombia, a former rebel and longtime legislator was elected the country’s first leftist president, promising to champion the rights of Indigenous, Black and poor Colombians, while building an economy that works for everyone.“A new story for Colombia, for Latin America, for the world,” he said in his victory speech, to thunderous applause.After years of tilting rightward, Latin America is hurtling to the left, a watershed moment that began in 2018 with the election of Andrés Manuel López Obrador in Mexico and could culminate with a victory later this year by a leftist candidate in Brazil, leaving the region’s six largest economies run by leaders elected on leftist platforms.A combination of forces have thrust this new group into power, including an anti-incumbent fervor driven by anger over chronic poverty and inequality, which have only been exacerbated by the pandemic and have deepened frustration among voters who have taken out their indignation on establishment candidates.During the height of a coronavirus wave in Peru last year, people waited to refill oxygen tanks for loved ones on the outskirts of Lima. Marco Garro for The New York TimesBut just as new leaders settle into office, their campaign pledges have collided with a bleak reality, including a European war that has sent the cost of everyday goods, from fuel to food, soaring, making life more painful for already suffering constituents and evaporating much of the good will presidents once enjoyed.Chile’s Gabriel Boric, Peru’s Pedro Castillo and Colombia’s Gustavo Petro are among the leaders who rode to victory promising to help the poor and disenfranchised, but who find themselves facing enormous challenges in trying to meet the high expectations of voters.Unlike today, the last significant leftist shift in Latin America, in the first decade of the millennium, was propelled by a commodities boom that allowed leaders to expand social programs and move an extraordinary number of people into the middle class, raising expectations for millions of families.Now that middle class is sliding backward, and instead of a boom, governments face pandemic-battered budgets, galloping inflation fed by the war in Ukraine, rising migration and increasingly dire economic and social consequences of climate change.In Argentina, where the leftist Alberto Fernández took the reins from a right-wing president in late 2019, protesters have taken to the streets amid rising prices. Even larger protests erupted recently in Ecuador, threatening the government of one of the region’s few newly elected right-wing presidents, Guillermo Lasso.“I don’t want to be apocalyptic about it,” said Cynthia Arnson, a distinguished fellow at the Woodrow Wilson International Center for Scholars. “But there are times when you look at this that it feels like the perfect storm, the number of things hitting the region at once.”Protesters in Santiago, Chile, in 2019, demanding economic changes to address systemic inequality. The country’s new president, elected last year, has become deeply unpopular among Chileans angry over rising prices.Tomas Munita for The New York TimesThe rise of social media, with the potential to supercharge discontent and drive major protest movements, including in Chile and Colombia, has shown people the power of the streets.Beginning in August, when Mr. Petro takes over from his conservative predecessor, five of the six largest economies in the region will be run by leaders who campaigned from the left.The sixth, Brazil, the largest country in Latin America, could swing that way in a national election in October. Polls show that former president Luiz Inácio Lula da Silva, a fiery leftist, has a wide lead on the right-wing incumbent, President Jair Bolsonaro.New leaders in Colombia and Chile are far more socially progressive than leftists in the past, calling for a shift away from fossil fuels and advocating for abortion rights at a time when the United States Supreme Court is moving the country in the opposite direction.But taken together, this group is extremely mixed, differing on everything from economic policy to their commitment to democratic principles.Mr. Petro and Mr. Boric have vowed to vastly expand social programs for the poor, for example, while Mr. López Obrador, who is focused on austerity, is reducing spending.What does link these leaders, however, are promises for sweeping change that in many instances are running headlong into difficult and growing challenges.Gustavo Petro and his running mate, Francia Márquez, celebrated their victory in June in Colombia’s national election. They will lead a country where 40 percent of the people lives on less than half of the monthly minimum wage.Federico Rios for The New York TimesIn Chile late last year, Mr. Boric beat José Antonio Kast, a right-wing establishment politician associated with Chile’s former dictator, Augusto Pinochet, by pledging to jettison the neoliberal economic policies of the past.But just months into his term, with an inexperienced cabinet, divided Congress, rising consumer prices and unrest in the country’s south, Mr. Boric’s approval ratings have plummeted.Ninety percent of poll respondents told the polling firm Cadem this month that they believed the country’s economy was stuck or going backward.Like many neighbors in the region, Chile’s yearly inflation rate is the highest it has been in more than a generation, at 11.5 percent, spurring a cost-of-living crisis.In southern Chile, a land struggle between the Mapuche, the country’s largest Indigenous group, and the state has entered its deadliest phase in 20 years, leading Mr. Boric to reverse course on one of his campaign pledges and redeploy troops in the area.Catalina Becerra, 37, a human resources manager from Antofagasta, in northern Chile, said that “like many people of my generation” she voted for Mr. Boric because Mr. Kast “didn’t represent me in the slightest.”Students taking part in an anti-government protest in June in Santiago.Javier Torres/Agence France-Presse, via Getty Images“But I wasn’t convinced by what he could do for the country,’’ Ms. Becerra added. “He has not achieved what he said he would.”In September, Chileans will vote on a remarkably progressive constitution that enshrines gender equality, environmental protections and Indigenous rights and that is meant to replace a Pinochet-era document.The president has bound his success to the referendum, putting himself in a precarious position should the draft be rejected, which polls show is for now the more likely outcome.In neighboring Peru, Mr. Castillo rose last year from virtual anonymity to beat Keiko Fujimori, a right-wing career politician whose father, former President Alberto Fujimori, governed with an iron fist and introduced neoliberal policies similar to those rejected by Chilean voters.While some Peruvians supported Mr. Castillo solely as a rejection of Ms. Fujimori, he also represented real hopes for many, especially poor and rural voters.As a candidate, Mr. Castillo promised to empower farmers with more subsidies, access to credit and technical assistance.But today, he is barely managing to survive politically. He has governed erratically, pulled between his far-left party and the far-right opposition, reflecting the fractious politics that helped him win the presidency.Supporters of Peru’s leftist presidential candidate Pedro Castillo during a protest against his rival’s effort to annul votes in 2021. Mr. Castillo won the election but is barely managing to survive politically. Marco Garro for The New York TimesMr. Castillo — whose approval rating has sunk to 19 percent, according to the Institute of Peruvian Studies — is now subject to five criminal probes, has already faced two impeachment attempts and cycled through seven interior ministers.The agrarian reform he pledged has yet to translate into any concrete policies. Instead, price spikes for food, fuel and fertilizer are hitting his base the hardest.Farmers are struggling through one of the worst crises in decades, facing the biggest planting season of the year without widespread access to synthetic fertilizer. They normally get most of it from Russia, but it is difficult to obtain because of global supply disruptions related to the war.Eduardo Zegarra, an investigator at GRADE, a research institute, called the situation “unprecedented.”“I think this is going to unfold very dramatically, and usher in a lot of instability,” he said.In a poor, hillside neighborhood in Lima, the capital, many parents are skipping meals so their children have more to eat.“We voted for Castillo because we had the hope that his government would be different,” said Ruth Canchari, 29, a stay-at-home mother of three children. “But he’s not taking action.”In Colombia, Mr. Petro will take office facing many of the same headwinds.President Gabriel Boric of Chile flashed a victory sign after his swearing-in ceremony at Congress in Valparaiso in March.Esteban Felix/Associated PressPoverty has risen — 40 percent of households now live on less than $100 a month, less than half of the monthly minimum wage — while inflation has hit nearly 10 percent.Still, despite widespread financial anxiety, Mr. Petro’s actions as he prepares to assume office seem to have earned him some support.He has made repeated calls for national consensus, met with his biggest political foe, the right-wing former president Álvaro Uribe, and appointed a widely respected, relatively conservative and Yale-educated finance minister.The moves may allow Mr. Petro to govern more successfully than, say, Mr. Boric, said Daniel García-Peña, a political scientist, and have calmed down some fears about how he will try to revive the economy.But given how quickly the honeymoon period ended for others, Mr. Petro will have precious little time to start delivering relief.“Petro must come through for his voters,” said Hernan Morantes, 30, a Petro supporter and environmental activist. “Social movements must be ready, so that when the government does not come through, or does not want to come through, we’re ready.”Julie Turkewitz More

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      Can Democrats Avoid a Midterm Wipeout?

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      This article is part of the Debatable newsletter. You can sign up here to receive it on Wednesdays.It is one of the most enduring trends in American politics that the president’s party tends to fare poorly during midterm elections. And in 2022, that trend was supposed to reassert itself with a vengeance: As inflation climbs at its fastest pace in four decades, Joe Biden’s approval rating has plunged to the lowest of any elected president at this point in his presidency since the end of World War II, according to FiveThirtyEight.But despite those grim conditions, the midterms could be surprisingly competitive: In a July poll conducted by The New York Times and Siena College, 41 percent of registered voters said they preferred Democrats to control Congress, compared with 40 percent who preferred Republicans.Here’s what people are saying about the state of the races, whether Democrats stand a chance of keeping one or both of their majorities in Congress, and what could change the forecast between now and November.Why the races look closer than expectedIf the Times/Siena polling made one thing clear, it’s that voters are not pleased with the way the country is being run. Even as the unemployment rate hovers around a 50-year low, Americans are deeply anxious about the economy: Just 10 percent of registered voters rated it as “good” or “excellent.” More broadly, political malaise seems the order of the day: A majority of respondents said the nation was too divided to solve its challenges, and just 13 percent said the country was heading in the right direction.But there are a few factors insulating Democrats from all this negative sentiment.As The Times’s chief political analyst, Nate Cohn, explains, recent news is actually helping Democrats in some ways: This summer, the Supreme Court has handed the right significant victories on abortion, climate policy, religious rights and gun laws, galvanizing voters who lean Democratic on those issues and shifting the national political discourse away from the Republican Party’s preferred turf of immigration, crime and school curriculums. Recent mass shootings have also played a role in this shift.In the past several years, the Republican Party has made inroads with less affluent, less educated voters while shedding support among higher-income, higher-educated voters. As a result, the electoral playing field has become less tilted toward Republicans, according to Nicholas Stephanopoulos, a law professor at Harvard who focuses on redistricting and demographic trends. While “the conventional wisdom has it that Democrats are disadvantaged in redistricting because of their inefficient over-concentration in cities,” he told Thomas B. Edsall, a contributing writer for Times Opinion, “the Trump era seems to have changed the country’s political geography in ways that are beneficial to Democrats.”Republicans are also reconfiguring their relationship with Donald Trump, whose grip on the party isn’t as strong as it once was, particularly as the fallout from the House Jan. 6 investigation compounds. According to the Times/Siena College poll, nearly half of Republican primary voters would prefer someone other than Trump for president in 2024. As Jake Lahut reports for Insider, that fault line has created potential pitfalls for Trump-backed Senate candidates, like Mehmet Oz in Pennsylvania and Herschel Walker in Georgia, who have won their primaries but have struggled to break away in general election matchups against their Democratic opponents.The odds: According to Nate Silver of FiveThirtyEight, Republicans have roughly the same chance of reclaiming a Senate majority as Democrats do of retaining theirs. In the House, though, Republicans are still heavily favored. Why? House candidates are both more numerous and more anonymous than Senate candidates, Silver explains, so voters’ feelings about the national political environment tend to be determinative.As The Times’s David Leonhardt wrote this month, “If Democrats keep the Senate without the House, they still would not be able to pass legislation without Republican support.” But, he added: “Senate control nonetheless matters. It would allow President Biden to appoint judges, Cabinet secretaries and other top officials without any Republican support, because only the Senate needs to confirm nominees.”The abortion factorBecause the Supreme Court returned the power to regulate abortions to the states last month, abortion will be a live issue this midterm season in a way it hasn’t been for many decades. Five states will have ballot measures asking voters whether to amend their constitutions to either enshrine or proscribe the right to abortion. And in other states, the issue has raised the stakes in competitive races for the legislature and the governor’s mansion.There are two ways abortion’s centrality could help Democrats in November, Ed Kilgore argues in New York magazine. “The first and most obvious is that it could keep in the Democratic ranks a significant number of suburban swing voters who voted for the Donkey Party in 2018 and 2020 but who might swing back to the G.O.P. without Trump totally dominating the landscape and with economic issues in the forefront,” he writes. “The second possible effect is to boost the turnout rates of certain pro-Democratic groups of voters who often skip non-presidential elections.”Mainstream Democrats have historically treated abortion as a divisive issue best left on the periphery of their campaign strategy. (Biden himself did not utter the word “abortion” until more than a year into his presidency.) But this election season, some Democrats are actively campaigning on the issue, wagering that the Supreme Court’s abrogation of the constitutional right to abortion could prompt a backlash from voters. In Georgia, for example, Stacey Abrams, the state’s Democratic nominee for governor, has started making direct appeals to swing voters and portraying her opponent, the incumbent governor, Brian Kemp, as the mind behind one of the nation’s most extreme abortion laws, which bans abortion after the sixth week of pregnancy.Similarly, Senator Maggie Hassan, a Democrat who is up for re-election in “notoriously swingy” New Hampshire, has leaned into the issue. “I will fight and never back down,” she said in a June television ad raising the possibility of a national abortion ban. “Protecting our personal freedoms isn’t just what’s right for New Hampshire. It’s what makes us New Hampshire.”Whether this strategy will end up redounding to the Democrats’ benefit remains an open question. Since the court overruled Roe v. Wade, most polls have shown approximately a three-point shift in the Democrats’ direction on the generic ballot, which asks whether voters would prefer Democrats or Republicans to control Congress, compared with surveys by the same pollsters before the decision came down.But some are skeptical that the shift will endure through November or prove significant enough to turn the electoral tide. “Does it have an effect? Absolutely,” Chuck Rocha, a Democratic strategist, told The Times. “Does it fundamentally change the landscape? No. Not in an off-year election, when your president’s approval rating is below 40 percent and gas is $5 a gallon.”What to watchInflation: According to the Times/Siena College poll, 78 percent of voters say inflation will be “extremely important” when they head to the polls. “It’s a very negative thing politically for the Democrats,” said Jason Furman, an economist at Harvard University and a former economic adviser for the Obama administration. “My guess is that the negative views about inflation are so deeply baked in that nothing can change in the next few months to change them.”Unless, of course, they get worse: Republicans are seizing on fears of rising prices in campaign ads, which economists warn could push prices even higher by entrenching inflationary expectations.A surprise announcement from Trump: “Should former President Trump decide, against the advice of nearly every Republican strategist alive, to announce his candidacy before the midterm elections in November, he might energize Democratic voters enough to minimize their losses at the margins,” Charlie Cook of the Cook Political Report writes. “I am not sure it would save one or both majorities, but it certainly has the potential to have a greater impact than abortion, guns, and Jan. 6 combined.”Another polling failure: As this newsletter has explored, the polling profession has been in something of a state of crisis since the 2016 election. Pollsters are having a harder and harder time reaching working-class voters, who have been trending Republican, and so polls have routinely overestimated Democratic support. As Cohn writes, “It’s hard not to wonder whether the good news for Democrats might simply be a harbinger of yet another high-profile misfire.”Do you have a point of view we missed? Email us at debatable@nytimes.com. Please note your name, age and location in your response, which may be included in the next newsletter.READ MORE“This election could answer the biggest midterm question: Abortion or the economy?” [Politico]“Where the Midterms Could Most Affect Abortion Access” [FiveThirtyEight]“Could the Midterms Be Tighter Than Expected?” [The New York Times]“Democrats’ Risky Bet: Aid G.O.P. Extremists in Spring, Hoping to Beat Them in Fall” [The New York Times]“Sorry, Democrats. Don’t get your hopes up for the midterms.” [The Washington Post] More

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      Why Republicans Are Having Gas Pains

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      Until just the other day, Republicans and conservative media loved, just loved talking about the price of gasoline. Indeed, “Remember how cheap gas used to be under Trump?” became a sort of all-purpose answer to everything. Is there now overwhelming evidence that the former president conspired in a violent attempt to overthrow the 2020 election? “Real America doesn’t care about the January 6th Committee. Gas is over $5 a gallon!” declared Representative Jim Jordan.But now gas prices are falling. They’re down more than 50 cents a gallon at the pump; wholesale prices, whose changes normally show up later in retail prices, are down even more, suggesting that prices will keep falling for at least the next few weeks. And there’s a palpable sense of panic on Fox News, which has been reduced to whining about how the White House is taking a “victory lap.”Actually, from what I can see, Biden administration officials are being remarkably restrained in pointing out the good news (which is probably a result of a slowing global economy). The larger point, however, is that Republican politicians’ focus on gas prices is profoundly stupid. And if it’s coming back to bite them, that’s just poetic justice.Why is focusing on gas prices stupid? Let me count the ways.First, while presidential policy can have big effects on many things, the cost of filling your gas tank isn’t one of them. For the most part, gasoline prices reflect the price of crude oil — and crude prices are set on world markets, which is one reason inflation has soared around the world, not just in the United States. Government spending in the Biden administration’s early months may have contributed to overall U.S. inflation — we can argue about how much — but has hardly anything to do with gas prices.Second, while gas was indeed cheap in 2020, it was cheap for a very bad reason: Global demand for oil was depressed because the world economy was reeling from the effects of the Covid-19 pandemic.Third, even before the pandemic struck, gas prices were unsustainably low.Little-known fact: Prices at the pump plunged during President Barack Obama’s second term, falling from about $3.70 a gallon in mid-2014 — around $4.50 in 2022 dollars — to $2.23 on the eve of the 2016 election. News reports at the time marveled at Obama’s diffidence about claiming credit.What happened? Mostly a boom in fracking, which increased U.S. oil production so much that it drove prices down around the world. As it turned out, however, that production boom didn’t make financial sense. Energy companies borrowed huge sums to invest in new drilling but never generated enough revenue to justify the cost. The fracking industry lost hundreds of billions even before the pandemic struck.So high gas prices weren’t President Biden’s fault, and given the disappearance of the forces that used to keep gas cheap, it’s hard to think of any policy — short of creating a global depression — that would bring prices down to $2 a gallon, or even $3 a gallon. Not that Republicans are offering any real policy proposals anyway.But the G.O.P. nonetheless went for the cheap shot of trying to make the midterm elections largely about prices at the pump. And this focus on gas is now giving the party a bellyache, as gas prices come down.It is, after all, hard to spend month after month insisting that Biden deserves all the blame for rising gas prices, then deny him any credit when they come down. The usual suspects are, of course, trying, but it’s not likely to go well.Some right-wing commentators are trying to pivot to a longer view, pointing out that gas prices are still much higher than they were in 2020. This happens to be true. But so much of their messaging has depended on voter amnesia — on their supporters not remembering what was really going on in 2020 — that I have my doubts about how effective this line will be.More broadly, many Wall Street analysts expect to see a sharp drop in inflation over the next few months, reflecting multiple factors, from falling used car prices to declining shipping costs, not just gas prices. Market expectations of near-term inflation have come way down.If the analysts and the markets are right, we’re probably headed for a period in which inflation headlines are better than the true state of affairs; it’s not clear whether underlying inflation has come down much, if at all. But that’s not an argument Republicans, who have done all they can to dumb down the inflation debate, are well placed to make.This has obvious implications for the midterm elections. Republicans have been counting on inflation to give them a huge victory, despite having offered no explanation of what they’d do about it. But if you look at the generic ballot — which probably doesn’t yet reflect falling gas prices — rather than Biden’s approval rating, the midterms look surprisingly competitive.Maybe real Americans do care about violent attacks on democracy, overturning Roe v. Wade and so on after all.If we continue to get good news on inflation, November may look very different from what everyone has been expecting.The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: letters@nytimes.com.Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram. More

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      Democrats Face Deepening Peril as Republicans Seize on Inflation Fears

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      Economists warn that a blitz of midterm election campaign ads could push consumer prices even higher.WASHINGTON — Triple-digit gasoline bills. Bulging hamburger prices. A Fourth of July holiday that broke the bank.Prices are rising at the fastest rate in four decades, a painful development that has given Republicans a powerful talking point just months ahead of the midterm elections. With control of Congress very much in play, Republicans are investing heavily in a blitz of campaign advertisements that portray a dark sense of economic disarray as they seek to make inflation a political albatross for President Biden and Democrats.According to Kantar’s Campaign Media Analysis Group, candidates running in House, Senate and governor races around the country have spent nearly $22 million airing about 130,000 local and national television ads that mention inflation from early April through the beginning of July. Inflation was the 10th most common issue mentioned by Democrats and 11th most common for Republicans, according to the data, underscoring how critical the issue is to both parties this election cycle.The data released Wednesday showing that prices in June climbed 9.1 percent over the past year gave Republicans fresh ammunition against Mr. Biden and his party, ammunition that includes faulting Democrats for passing a $1.9 trillion stimulus package last year and efforts to push through additional spending in a sweeping climate and economic package known as “Build Back Better.”The intensifying focus on inflation is already weighing on Mr. Biden’s poll numbers. A New York Times/Siena College poll this week showed his approval at a meager 33 percent, with 20 percent of voters viewing jobs and the economy as the most important problem facing the country. Inflation and the cost of living followed closely behind. The poll also showed that the race for control of Congress is surprisingly tight.While gas prices have fallen from their $5 a gallon peak and there are signs that inflation might be slowing, consumers are unlikely to feel better off anytime soon. Gas prices are still much higher than they were a year ago, with the average national price for a gallon at $4.60 versus $3.15 in 2021, according to AAA.Voters view jobs and the economy as among the most important issues facing the country.Hiroko Masuike/The New York Times“It’s a very negative thing politically for the Democrats,” said Jason Furman, an economist at Harvard University and former Obama administration economic adviser. “My guess is that the negative views about inflation are so deeply baked in that nothing can change in the next few months to change them.”The White House, while acknowledging the pain that inflation is causing, has tried to deflect responsibility, saying that it is a global problem and attributing it to shortages of food and oil stemming from Russian President Vladimir V. Putin’s invasion of Ukraine.On Wednesday, Mr. Biden called the latest Consumer Price Index “out-of-date” given the recent fall in gas prices and said the data “is a reminder that all major economies are battling this Covid-related challenge, made worse by Putin’s unconscionable aggression.”8 Signs That the Economy Is Losing SteamCard 1 of 9Worrying outlook. More