Inflation (Economics)

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      A Recession Would Hurt Democrats. Some Warn It’d Also Hurt Democracy.

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      By trying to tame inflation, some commentators say, the Federal Reserve could bring about a recession — just as an unrepentant Donald Trump appears to be eyeing another White House bid.Jerome Powell, the chairman of the Federal Reserve, made the understatement of the year on Wednesday when he noted offhandedly to reporters, “Clearly, people do not like inflation.”And how.According to Fox News’s latest national poll, 41 percent of registered voters said that “inflation and higher prices” represented the most important issue influencing their ballot decision in November. Just 12 percent of voters called guns their top priority, the second-place issue. Seventy-one percent disapproved of the job President Biden is doing on inflation.This is not exactly a vote of confidence in the federal government. In the past, this level of public dissatisfaction has typically led to major political upheaval.Inflation ran at a rate of 8.6 percent in May, the fastest annual pace in four decades. Voters do not seem to be buying the White House’s argument, backed up by the Fed and places like the World Bank, that global factors beyond Biden’s control like the pandemic, supply-chain crises and the war in Ukraine are driving the increase in prices.Nor do they seem to be giving the administration much credit for an unemployment rate that is down to 3.6 percent, just a tick above its prepandemic level.The Fed might be Biden’s best hope. After the Federal Open Market Committee announced on Wednesday that it would raise short-term interest rates by three-quarters of a percentage point, Powell said the Fed’s goal was to bring inflation closer to its 2 percent target while keeping the labor market “strong.”He hastened to add: “We’re not trying to induce a recession now. Let’s be clear about that.”‘A democracy-wrecking election’Yet some commentators, notably David Frum of The Atlantic, have begun to fret that in trying to tame inflation, the Fed will do exactly that — start a recession, just in time to doom Biden or whomever Democrats nominate in his stead in 2024.Understand Inflation and How It Impacts YouInflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Greedflation: Some experts contend that big corporations are supercharging inflation by jacking up prices. We take a closer look at the issue. Inflation Calculator: How you experience inflation can vary greatly depending on your spending habits. Answer these seven questions to estimate your personal inflation rate.For Investors: At last, interest rates for money market funds have started to rise. But inflation means that in real terms, you’re still losing money.Frum noted the historically tight link between economic growth and a president’s chances of re-election. Citing the possibility that an unrepentant Donald Trump will run again, he argued that a downturn this year or next could result in “a democracy-wrecking election the next year.”He concluded: “So the Federal Reserve has a more than usual obligation this week to measure its policy appropriately. A miscalculation in monetary policy in 2022 could reverberate through long ages of American history ahead.”Others have criticized Biden’s decision last fall to nominate Powell for a second term, leaving the president handcuffed in blaming the Fed chair for the parlous state of the economy. Powell was, after all, Trump’s pick for Fed chair — and Biden, the thinking goes, could have thrown him overboard and started afresh.That would have been a very Trump-like move. Powell resisted months of intense pressure from the 45th president to lower interest rates, including comments describing the low-key Fed chairman as an “enemy” of the United States. Central bankers prize their distance from politics, mindful that their credibility with financial institutions around the world is crucial to their effectiveness.So in renominating Powell, Biden made sure to emphasize his respect for his institutional prerogatives. “My plan is to address inflation,” the president said. “It starts with a simple proposition: Respect the Fed and respect the Fed’s independence.”Jerome Powell, the chairman of the Federal Reserve, with President Biden last month. Some Democrats had urged Biden to choose a Fed chair of his own.Doug Mills/The New York TimesThe Fed’s relationship with politicsLet’s set aside the fraught question of whether Trump’s re-election could bring about the end of American democracy. Does the Fed, in fact, have an “obligation” to consider how its actions might affect the U.S. political system?On a simple reading of the law, not really. The Federal Reserve Act gives the Fed the authority to regulate the nation’s money supply, to foster the “long-run potential” of the U.S. economy and to promote the goals of “maximum employment, stable prices and moderate long-term interest rates.”Frederic Mishkin, a former member of the Fed’s board of governors, no doubt spoke for many in the finance world when he wrote in an email, “I most strongly disagree with the view that the Federal Reserve should adjust its policy to favor or harm any politician.”He added, “The Fed should be as apolitical as possible, and its policy focus should be on stabilizing both inflation and output fluctuations, as is mandated by congressional legislation.”But it’s hard to divorce the Fed from its historical roots, founded as it was in an era of great political turmoil driven by frequent financial panics.The Fed was successfully established in 1913 because President Woodrow Wilson won the assent of William Jennings Bryan, the most influential populist leader of the time, by guaranteeing that government officials appointed by the president, not private sector bankers, would run the board.Inflation F.A.Q.Card 1 of 5What is inflation? 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      If You Must Point Fingers on Inflation, Here’s Where to Point Them

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      As the midterm elections draw nearer, a central conservative narrative is coming into sharp focus: President Joe Biden and the Democratic-controlled Congress have a made a mess of the American economy. Republicans see pure political gold in this year’s slow-motion stock market crash, which seems to be accelerating at the perfect time for a party seeking to regain control of Congress in the fall.The National Republican Congressional Committee in a tweet last month quipped that the Democratic House agenda includes a “tanking stock market.” Conservatives have been highlighting a video clip from 2020 when then-president Donald Trump warned about a Joe Biden presidency: “If he’s elected, the stock market will crash.” Right wing pundit Sean Hannity’s blog featured the clip under the headline: “TRUMP WAS RIGHT.”But the narrative pinning blame for the economy’s woes squarely on Democrats’ shoulders elides the true culprit: the Federal Reserve. The financial earthquakes of 2022 trace their origin to underground pressures the Fed has been steadily creating for a over a decade.It started back in 2010, when the Fed embarked on the unprecedented and experimental path of using its power to create money as a primary engine of American economic growth. To put it simply, the Fed created years of super-easy money, with short-term interest rates held near zero while it pumped trillions of dollars into the banking system. One way to understand the scale of these programs is to measure the size of the Fed’s balance sheet. The balance sheet was about $900 billion in mid-2008, before the financial market crash. It rose to $4.5 trillion in 2015 and is just short of $9 trillion today.All of this easy money had a distinct impact on our financial system — it incentivized investors to push their money into ever riskier bets. Wall Street-types coined a term for this effect: “search for yield.” What that means is the Fed pushed a lot of money into a system that was searching for assets to buy that might, in return, provide a decent profit, or yield. So money poured into relatively risky assets like technology stocks, corporate junk debt, commercial real estate bonds, and even cryptocurrencies and nonfungible tokens, known as NFTs. This drove the prices of those risky assets higher, drawing in yet more investment.The Fed has steadily inflated stock prices over the last decade by keeping interest rates extremely low and buying up bonds — through a program called quantitative easing — which has the effect of pushing new cash into asset markets and driving up prices. The Fed then supercharged those stock prices after the pandemic meltdown of 2020 by pumping trillions into the banking system. It was the Fed that primarily dropped the ball on addressing inflation in 2021, missing the opportunity to act quickly and effectively as the Fed chairman, Jerome Powell, reassured the public that inflation was likely to be merely transitory even as it gained steam. And it’s the Fed that is playing a frantic game of financial catch-up, hiking rates quickly and precipitating a wrenching market correction.So, now the bill is coming due. Unexpectedly high inflation — running at the hottest levels in four decades — is forcing the Fed to do what it has avoided doing for years: tighten the money supply quickly and forcefully. Last month, the Fed raised short-term rates by half-a-percentage point, the single largest rate hike since 2000. The aggressiveness of the move signaled that the Fed could take similarly dramatic measures again this year.A sobering realization is now unfolding on Wall Street. The decade of super-easy money is likely over. Because of inflation’s impact, the Fed likely won’t be able to turn on the money spigots at will if asset prices collapse. This is the driving force behind falling stock prices, and why the end of the collapse is probably not yet in sight. The reality of a higher-interest-rate world is working its way through the corridors of Wall Street and will likely topple more fragile structures before it’s all over.After the stock and bond markets adjust downward, for example, investors must evaluate the true value of other fragile towers of risky assets, like corporate junk debt. The enormous market for corporate debt began to collapse in 2020, but the Fed stopped the carnage by directly bailing out junk debt for the first time. This didn’t just save the corporate debt market, but added fuel to it, helping since 2021 to inflate bond prices. Now those bonds will have to be re-priced in light of higher interest rates, and history indicates that their prices will not go up.And while the Fed is a prime driver of this year’s volatility, the central bank continues to evade public accountability for it.Just last month, for instance, the Senate confirmed Mr. Powell to serve another four-year term as Fed chairman. The vote — more than four to one in favor — reflects the amazingly high level of bipartisan support that Mr. Powell enjoys. The president, at a White House meeting in May, presented Mr. Powell as an ally in the fight against inflation rather than the culprit for much of this year’s financial market volatility. “My plan is to address inflation. It starts with a simple proposition: Respect the Fed and respect the Fed’s independence,” the president said.This leaves the field open for the Republican Party to pin the blame for Wall Street’s woes on the Democratic Party’s inaction. As Jim Jordan, the Republican congressman from Ohio, phrased it on Twitter recently, “Your 401k misses President Trump.” This almost certainly presages a Republican line of attack over the summer and fall. It won’t matter that this rhetoric is the opposite of Mr. Trump’s back in 2018 and 2019, when the Fed was tightening and causing markets to teeter. Back then, Mr. Trump attacked Mr. Powell on Twitter and pressured the Fed chairman to cut interest rates even though the economy was growing. (The Fed complied in the summer of 2019.) But things are different now. Mr. Biden is in office, and the Fed’s tightening paves a clear pathway for the Republican Party to claim majorities in the House and Senate.Republicans have also honed in on Mr. Biden’s $1.9 trillion American Rescue Plan, meant to mitigate the impact of the Covid-19 pandemic, as a cause for runaway inflation. Treasury Secretary Janet Yellen rejected that, noting in testimony before members of Congress: “We’re seeing high inflation in almost all of the developed countries around the world. And they have very different fiscal policies. So it can’t be the case that the bulk of the inflation that we’re experiencing reflects the impact” of the American Rescue Plan.Democrats would be wise to point to the source of the problem: a decade of easy money policies at the Fed, not from anything done at the White House or in Congress over the past year and a half.The real tragedy is that this fall’s election might reinforce the very dynamics that created the problem in the first place. During the 2010s, Congress fell into a state of dysfunction and paralysis at the very moment when its economic policymaking power was needed most. It should be viewed as no coincidence that the Fed announced that it would intensify its experiments in quantitative easing on Nov. 3, 2010, the day after members of the Tea Party movement were swept into power in the House. The Fed was seen as the only federal agency equipped to forcefully drive economic growth as Congress relegated itself to the sidelines.With prices for gas, food and other goods still on the rise and the stock market in a state of flux, there may still be considerable pain ahead for consumers. But Americans shouldn’t fall for simplistic rhetoric that blames this all on Mr. Biden. More than a decade of monetary policy brought us to this moment, not 17 months of Democratic control in Washington. Voters should be clear-eyed about the cause of this economic chaos, and vote for the party they think can best lead us out of it.Christopher Leonard (@CLeonardNews) is the author, most recently, of “The Lords of Easy Money: How the Federal Reserve Broke the American Economy” and executive director of the Watchdog Writers Group at the Missouri School of Journalism.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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      States Turn to Tax Cuts as Inflation Stays Hot

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      WASHINGTON — In Kansas, the Democratic governor has been pushing to slash the state’s grocery sales tax. Last month, New Mexico lawmakers provided $1,000 tax rebates to households hobbled by high gas prices. Legislatures in Iowa, Indiana and Idaho have all cut state income taxes this year.A combination of flush state budget coffers and rapid inflation has lawmakers across the country looking for ways to ease the pain of rising prices, with nearly three dozen states enacting or considering some form of tax relief, according to the Tax Foundation, a right-leaning think tank.The efforts are blurring typical party lines when it comes to tax policy. In many cases, Democrats are joining Republicans in supporting permanently lower taxes or temporary cuts, including for high earners.But while the policies are aimed at helping Americans weather the fastest pace of inflation in 40 years, economists warn that, paradoxically, cutting taxes could exacerbate the very problem lawmakers are trying to address. By putting more money in people’s pockets, policymakers risk further stimulating already rampant consumer demand, pushing prices higher nationally.Jason Furman, an economist at Harvard University who was an economic adviser under the Obama administration, said that the United States economy was producing at full capacity right now and that any additional spending power would only drive up demand and prices. But when it comes to cutting taxes, he acknowledged, the incentives for states do not always appear to be aligned with what is best for the national economy.“I think all these tax cuts in states are adding to inflation,” Mr. Furman said. “The problem is, from any governor’s perspective, a lot of the inflation it is adding is nationwide and a lot of the benefits of the tax cuts are to the states.”States are awash in cash after a faster-than-expected economic rebound in 2021 and a $350 billion infusion of stimulus funds that Congress allocated to states and cities last year. While the Biden administration has restricted states from using relief money to directly subsidize tax cuts, many governments have been able to find budgetary workarounds to do just that without violating the rules.Last week, Gov. Ron DeSantis of Florida signed a $1.2 billion tax cut that was made possible by budget surpluses. The state’s coffers were bolstered by $8.8 billion in federal pandemic relief money. Mr. DeSantis, a Republican, hailed the tax cuts as the largest in the state’s history.“Florida’s economy has consistently outpaced the nation, but we are still fighting against inflationary policies imposed on us by the Biden administration,” he said.Adding to the urgency is the political calendar: Many governors and state legislators face elections in November, and voters have made clear they are concerned about rising prices for gas, food and rent.“It’s very difficult for policymakers to see the inflationary pressures that taxpayers are burdened by right now while sitting on significant cash reserves without some desire to return that,” said Jared Walczak, vice president of state projects with the Center for State Tax Policy at the Tax Foundation. “The challenge for policymakers is that simply cutting checks to taxpayers can feed the inflationary environment rather than offsetting it.”The tax cuts are coming in a variety of forms and sizes. According to the Tax Foundation, which has been tracking proposals this year, some would be phased in, some would be permanent and others would be temporary “holidays.”Next month, New York will suspend some of its state gas taxes through the end of the year, a move that Gov. Kathy Hochul, a Democrat, said would save families and businesses an estimated $585 million.In Pennsylvania, Gov. Tom Wolf, a Democrat, has called for gradually lowering the state’s corporate tax rate to 5 percent from 10 percent — taking a decidedly different stance from many of his political peers in Congress, who have called for raising corporate taxes. Mr. Wolf said in April that the proposal was intended to make Pennsylvania more business friendly.States are acting on a fresh appetite for tax cuts as inflation is running at a 40-year high.OK McCausland for The New York TimesMr. Furman pointed to the budget surpluses as evidence that the $1.9 trillion pandemic relief package handed too much money to local governments. “The problem was there was just too much money for states and localities.”A new report from the Tax Policy Center, a left-leaning think tank, said total state revenues rose by about 17.6 percent last year. State rainy day funds — money that is set aside to cover unexpected costs — have reached “new record levels,” according to the National Association of State Budget Officers.Yet those rosy budget balances may not last if the economy slows, as expected. The Federal Reserve has begun raising interest rates in an attempt to cool economic growth, and there are growing concerns about the potential for another recession. Stocks fell for another session on Monday, with the S&P 500 down 3.2 percent, as investors fretted about a slowdown in global growth, high inflation and other economic woes.Cutting taxes too deeply now could put states on weaker financial footing.The Tax Policy Center said its state tax revenue forecasts for the rest of this year and next year were “alarmingly weak” as states enacted tax cuts and spending plans. Fitch, the credit rating agency, said recently that immediate and permanent tax cuts could be risky in light of evolving economic conditions.“Substantial tax policy changes can negatively affect revenues and lead to long-term structural budget challenges, especially when enacted all at once in an uncertain economic environment,” Fitch said.The state tax cuts are taking place as the Biden administration struggles to respond to rising prices. So far, the White House has resisted calls for a gas tax holiday, though Jen Psaki, the White House press secretary, said in April that President Biden was open to the idea. The administration has responded by primarily trying to ease supply chain logjams that have created shortages of goods and cracking down on price gouging, but taming inflation falls largely to the Fed.The White House declined to assess the merits of states’ cutting taxes but pointed to the administration’s measures to expand fuel supplies and proposals for strengthening supply chains and lowering health and child care costs as evidence that Mr. Biden was taking inflation seriously.“President Biden is taking aggressive action to lower costs for American families and address inflation,” Emilie Simons, a White House spokeswoman, said.The degree to which state tax relief fuels inflation depends in large part on how quickly the moves go into effect.Gov. Laura Kelly backed a bill last month that would phase out the 6.5 percent grocery sales tax in Kansas, lowering it next January and bringing it to zero by 2025. Republicans in the state pushed for the gradual reduction despite calls from Democrats to cut the tax to zero by July.Inflation F.A.Q.Card 1 of 6What is inflation? More

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      Inflation concerns are at the center of an Ohio Senate contest.

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      Inflation and high gas, food and energy prices were among the top issues animating voters in this week’s primary contests in Ohio, where an intense general election battle for a Senate seat is now unfolding between Representative Tim Ryan and J.D. Vance, the author and investor. The race is expected to largely center on winning over establishment Republicans and working-class voters.Mr. Ryan, a Democrat, and Mr. Vance, a Republican, have both pledged to bring back jobs, rebuild Ohio’s manufacturing industry and withstand competition from China. But Mr. Vance’s stump speeches and ads have also included heavy appeals to social conservatives, with hard-right attacks on immigrants and transgender people, as well as digs at President Biden, whose low approval ratings are expected to hurt Democrats.“I’m sick of the president, Joe Biden, who will buy oil and gas from every single person in the world except for a middle-class southeastern Ohioan who’s trying to earn a living to support his family,” Mr. Vance said, to cheers, at an April rally with former President Donald J. Trump outside Columbus.Polls show that Americans, and Republicans in particular, are more concerned about inflation than at any other time since the 1980s. In Ohio, that worry was echoed at candidate events and forums, where voters often pointed to gas prices that had risen above $4 a gallon, despite other economic markers that have improved. The unemployment rate in the state was a low 4.1 percent in March, and Help Wanted signs have become commonplace outside storefronts, restaurants and gas stations across the state.At an election night event for former State Treasurer Josh Mandel, who came in a close second to Mr. Vance in the Republican primary, Matthew Kearney, 32, a partner at a law firm, said he supported Mr. Mandel because of his stances opposing abortion and “critical race theory,” the catchall conservative term for public school curriculums that focus on the functions of race and racism in American society.He also pointed to his pocketbook.“Inflation at the grocery store, gas prices,” Mr. Kearney said. “I think people are motivated to vote based on how that is impacting them.” More

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      Democrats’ Mystery: How to Brighten a Presidency and a National Mood

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      LAKEWOOD, Ohio — At a Whole Foods in one moderate Cleveland suburb, shoppers recently worried about war, inflation, a “scary” political climate — and a Democratic Party some saw as slow to address the nation’s burning problems.At a house party for a left-wing congressional candidate across town, attendees fretted over the high cost of living and exorbitant student loan debt as they weighed their choices in Ohio’s primary elections on Tuesday.And at a campaign event for Representative Shontel Brown here in Lakewood, a liberal city near Cleveland, not everyone seemed impressed by President Biden.“He’s OK,” allowed Yolanda Pace-Owens, 46, who works in security. She said that she had voted for Mr. Biden and still admired him, but that she was alarmed by a pandemic-era rise in violent crime. “We just got to do better,” she said.Nearly six months before the midterm elections, Mr. Biden and the Democrats face staggering challenges and signs of dampened enthusiasm among nearly every constituency that powered their 2020 presidential and 2018 midterm victories, according to polls and more than two dozen interviews with voters, elected officials and party strategists across the country.Yet Democrats are still struggling with how to even discuss the nation’s greatest challenges — much less reach a consensus on how to right the ship.The party’s problems run deep, as Mr. Biden’s lead pollster has privately warned the White House for months. Independent voters backed Mr. Biden in 2020, but his approval rating with independents now hovers in the 30s. He has underperformed with voters of color in some surveys. Warning signs have emerged among suburban voters. And Mr. Biden’s approval rating has deteriorated with young people even though he won them overwhelmingly in 2020.Yolanda Pace-Owens said that she admired Mr. Biden but that “we just got to do better.” Dustin Franz for The New York TimesIn a midterm environment heavily shaped by the president’s approval rating, all of those numbers are gravely worrying for Democratic candidates, who are left with tough questions about how to engage unsettled voters and reinvigorate their base.How much time should they spend trying to show voters they grasp the pain of inflation, compared with efforts to remind them of low unemployment? Should they pursue ambitious policies that show Democrats are fighters, or is it enough to hope for more modest victories while emphasizing all that the party has passed already?A Guide to the 2022 Midterm ElectionsMidterms Begin: The 2022 election season is underway. See the full primary calendar and a detailed state-by-state breakdown.In the Senate: Democrats have a razor-thin margin that could be upended with a single loss. Here are the four incumbents most at risk.In the House: Republicans and Democrats are seeking to gain an edge through redistricting and gerrymandering, though this year’s map is poised to be surprisingly fairGovernors’ Races: Georgia’s contest will be at the center of the political universe, but there are several important races across the country.Key Issues: Inflation, the pandemic, abortion and voting rights are expected to be among this election cycle’s defining topics.And even when candidates try to tell that story, is anyone listening?“Voters hear us, but I don’t know that we have convinced voters as to how these things will affect them on a personal level,” Representative James E. Clyburn of South Carolina, the third-ranking House Democrat, said in a recent interview. “We’re not connecting with the voters on the level that they can connect with.”As Mr. Biden confronts the lingering pandemic, war in Ukraine and historical headwinds — the president’s party typically loses seats in midterm elections — he has acknowledged his party’s messaging challenges, worrying recently that amid crises, “we haven’t sold the American people what we’ve actually done.”The president, a consummate retail politician who some Democrats had hoped would be more visible, is now pursuing a more robust travel schedule to sell his party’s agenda and accomplishments, and he is highlighting some contrasts with Republicans.Consumers across the country are seeing a rise in the price of everyday items, like $8.29 for a gallon of milk at a Whole Foods grocery store in Rocky River, Ohio.Dustin Franz for The New York TimesHao Pham of Cleveland filling his S.U.V. with gas, the price of which has increased.Dustin Franz for The New York TimesAllies and some voters note that polling is partially driven by anger over extraordinary events, including the war’s impact on gas prices, that the White House could not fully control. But Mr. Biden’s advisers say that the president is working to demonstrate that Democrats understand voters’ struggles and are moving to fix them, as the party’s lawmakers make a fresh push for a range of legislative priorities, especially concerning prices. On Thursday, Mr. Biden also said that he was considering wiping out some student loan debt.A new Washington Post-ABC poll also showed some positive signs for Mr. Biden and the Democrats, though Republicans retained significant advantages on issues including inflation, the economy and crime.“While President Biden and Democrats work to lower costs and continue the historic economic recovery made possible by the American Rescue Plan, Republicans have done everything they can to try to stand in the way,” Jaime Harrison, the chairman of the Democratic National Committee, said in a statement.Yet months of national polls show that Americans have a vastly different perception of the party in power. Even in overwhelmingly liberal Los Angeles, private Democratic polling in April found Mr. Biden’s favorability rating at only 58 percent, according to a person with direct knowledge of the data.Democratic tensions over messaging have been on display in Ohio, where candidates in this week’s primaries reflect the full spectrum of competing views.Ms. Brown, who faces a contested primary in a safely Democratic seat and was endorsed by Mr. Biden, is running hard on the bipartisan infrastructure law.She echoed other House Democrats in promoting the message that “Democrats have been delivering.”But Biden advisers have privately indicated that pitch tests poorly as a party slogan. And at another Ohio event in late April, Nina Turner, a former state senator who is challenging Ms. Brown from the left in a rematch, suggested that Democrats had not delivered nearly enough.She urged, among other priorities, universal cancellation of student debt — or, at a minimum, canceling $10,000 in federal student debt per borrower (Ms. Brown also supports some student debt forgiveness measures). Mr. Biden, who endorsed the $10,000 goal in 2020, has postponed payments, and significant student debt has been erased during his tenure, but some have called on him to do much more. He may take further action, and there is still time to make more progress on the Democratic agenda.But for now, many on the left are disappointed that Democrats, despite controlling Washington, have run aground in the divided Senate on priorities like the climate and voting rights.“People can forgive you, even if you can’t get something done,” Ms. Turner said. “What they don’t like is when you’re not fighting. And we need to see more of a fighting spirit among the Democratic Party.”Nina Turner, a progressive House candidate in Ohio, held a gathering with supporters to talk about issues they prioritized.Dustin Franz for The New York TimesOn the other end of the party’s ideological spectrum is Representative Tim Ryan, a moderate Ohio Democrat running for Senate in a state that has veered rightward. He is casting himself as a fighter for the working class and highlighting measures like the infrastructure law, while seeking some cultural and political distance from many others in his party.In an interview, Mr. Ryan cheered a ruling to eliminate mask mandates on airlines and public transportation, which is now being challenged. “Masks suck,” he said. “I think we’re all tired of it.”Asked which national Democratic surrogates he would welcome, he cited Senator Sherrod Brown of Ohio, Senator Jon Tester of Montana and Senator Gary Peters of Michigan — but asked specifically about Mr. Biden or Vice President Kamala Harris, Mr. Ryan said: “This is my race. I’m going to be the face of this.” (Biden advisers noted that the president has recently appeared with Democrats in competitive races.)And as of Friday, Mr. Ryan was one of seven Democratic candidates who have run ads this year that mentioned inflation, according to the media tracking firm AdImpact. By contrast, dozens of Republican candidates and allied groups have done the same. In polls, Americans have cited inflation as a top issue.“Burying your head in the sand,” Mr. Ryan said, “is not the way to approach it.” Asked about the biggest challenges facing his party, he replied, “A response to the inflation piece is a big hurdle.”He also cited “a national brand that is not seen as connected to the working-class people, whether they’re white or Black or brown.”Representative Tim Ryan, center right, and Michael S. Regan, the administrator of the Environmental Protection Agency, met in April at a home in Youngstown, Ohio, where lead pipes are set to be replaced thanks to new federal funding.Dustin Franz for The New York TimesLou McMahon, a registered Democrat who said he did not vote in the last two presidential elections because he did not like his choices, sounded open to Mr. Ryan in an interview at Ms. Brown’s event. But asked to assess Democrats in Washington generally, he replied, “Promise, but not delivered,” citing both stalled legislative ambitions and Mr. Biden’s pledge to help heal partisan divisions.“The targets and the aspirations were maybe beyond the reach,” said Mr. McMahon, 58, an environmental lawyer. “The reuniting that was so much of the promise hasn’t played out in reality quite that way.”Celinda Lake, a veteran Democratic strategist and a pollster on Mr. Biden’s 2020 campaign, said that “there’s nobody in America more deeply disappointed in how divided America is than Joe Biden.”“He does communicate it, but I think it helps a lot when he’s on the road,” she said.Republicans face their own midterm difficulties. Many candidates have adopted former President Donald J. Trump’s relentless focus on the false notion of a stolen 2020 election, a stance that swing voters may dismiss as extreme. In some primaries, the party runs the risk of nominating seriously flawed general-election candidates.Democratic officials hope their prospects will brighten as primary contests are settled and candidates draw sharper direct contrasts with their opponents — and they are already trying to define that choice.On one side, they say, are bomb-throwing Republicans who are caught up in cultural battles, fealty to Trumpism and a controversial tax and social safety net proposal. On the other, Democrats argue, is a party that passed major infrastructure and pandemic relief measures, and spearheaded the confirmation of the first Black woman to the Supreme Court. Mr. Biden has also moved to combat gun violence, confronting Republican efforts to portray Democrats as weak on crime.Many Democratic candidates are also raising vast sums of money, a sign of voter engagement.“Our members have a great record of results, and the other side is offering nothing except anger and fear,” said Representative Sean Patrick Maloney of New York, the chair of the House Democratic campaign arm. “My message is: We’re getting good things done. We’re part of the solution. Give us a little more time.”Time indeed remains, and Democrats could reverse their fortunes in an unpredictable environment — but it is also possible that in the fall, the outlook will be largely unchanged.“The problem with midterm elections is, they’re not really a choice,” said David Axelrod, who served as a senior adviser to former President Barack Obama. “They tend to be a referendum on the party that controls the White House.” More

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      If Biden’s Plan Is Like a ‘New Deal,’ Why Don’t Voters Care?

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      RICHMOND, Va. — As Chris Frelke surveyed the Thomas B. Smith Community Center, he conceded that the beige-and-green cinder block structure was not much to look at. But Mr. Frelke, the parks director in Virginia’s capital, spoke with excitement describing the image in his mind’s eye: One day, there would be a pristine new complex capable of providing services from child care to community college classes.That dream complex is not some remote fantasy. The city of Richmond intends to build it in the next few years using $20 million from the American Rescue Plan, President Biden’s trillion-dollar coronavirus-relief law. Richmond will receive a total of $155 million, a cash infusion that its Democratic mayor, Levar Stoney, called “a once-in-a-lifetime sort of investment.”“This is akin to our New Deal,” Mr. Stoney said.Unlike the New Deal, however, this $1.9 trillion federal investment in American communities has barely registered with voters. Rather than a trophy for Mr. Biden and his party, the program has become a case study in how easily voters can overlook even a lavishly funded government initiative delivering benefits close to home.Mr. Biden’s popularity has declined in polls over the past year, and voters are giving him less credit for the country’s economic recovery than his advisers had anticipated. In Virginia, Democrats got shellacked in the 2021 off-year elections amid the country’s halting emergence from the depths of the pandemic.Ambivalence among voters stems partly from the fact that many of the projects being funded are, for now, invisible.At Richmond’s Southside Community Center, slated to balloon in capacity with the help of rescue plan funding, Linda Scott, a 75-year-old pickleball enthusiast, said she had heard nothing of the coming upgrades.“I know that we’re getting lots of money,” said Ms. Scott, a self-described independent who voted for Mr. Biden. “But what we’re doing with it, I’m not sure.”Thirteen months after Mr. Biden signed the emergency package, that money is starting to fuel a wave of investment on city infrastructure, public services and pilot programs unlike any in decades.“You tell them about the American Rescue Plan,” Mr. Biden has said to House members, “and they say, ‘What the hell are you talking about?’”Doug Mills/The New York TimesCity and county leaders are spending confidently, boasting of the generational improvements they are making with the help of Mr. Biden’s legislation.The city of Richmond plans to use $78 million to create four activity centers, overhauling two existing facilities and building two. Rescue plan money will also fund more than $30 million on affordable housing initiatives and smaller amounts on public safety and health.Mr. Stoney allowed that it was not clear how much voters had processed that barrage of spending when the projects were far from completion. In cities like his, the money must make its way through city councils and contract-bidding processes; in some states, the path to deploying funds has been even longer as governors wrangle with conservative legislatures.“I wish we could snap our fingers and say: Oh, there’s a new community center right here today!” Mr. Stoney said.A Guide to the 2022 Midterm ElectionsMidterms Begin: The Texas primaries officially opened the 2022 election season. See the full primary calendar.In the Senate: Democrats have a razor-thin margin that could be upended with a single loss. Here are the four incumbents most at risk.In the House: Republicans and Democrats are seeking to gain an edge through redistricting and gerrymandering, though this year’s map is poised to be surprisingly fairGovernors’ Races: Georgia’s contest will be at the center of the political universe, but there are several important races across the country.Key Issues: Inflation, the pandemic, abortion and voting rights are expected to be among this election cycle’s defining topics.Other initiatives will kick in faster but affect fewer people: In Richmond, the mayor’s office has endorsed a grant of about $350,000 to Daily Planet Health Services, clinics for low-income residents, to expand capacity to care for people without homes.Richmond plans to use more than $30 million from federal rescue plan funds on affordable housing initiatives.Parker Michels-Boyce for The New York TimesDr. Patricia Cook, the organization’s chief medical officer, said the money could be applied quickly: “We’d be able to fill the rooms that day.”Getting voters excited about the American Rescue Plan is a tall order when so many are preoccupied with the price of gasoline and the cost and availability of other basic goods — concerns the emergency-spending bill was not designed to address.A Gallup poll in March found that more Americans said they worried a great deal about inflation than any other issue. Crime and homelessness, both targets of rescue spending, were not far behind.The American Rescue Plan, which also funded direct relief payments to voters and health programs like vaccine distribution, has been criticized by Republicans and some economists for pumping too much money into the economy and probably contributing to inflation.Mr. Stoney said he had encouraged the White House to work with mayors and treat them as the “tip of the spear” in promoting its aid. Many Americans were still in a gloomy mood because of the pandemic, the mayor said, and Democrats had not done a very good job of communicating about the plan.“Not just the president, but it’s difficult even for us sometimes to break through some of the noise that’s out there,” he said.Mayor Levar Stoney of Richmond says that if Democrats don’t find a way to effectively convey their role in the rescue plan to voters, then Republicans would take credit for spending the money.Parker Michels-Boyce for The New York TimesOnce in a LifetimeThe political predicament confronting Mr. Biden and his party was embedded in the structure of the American Rescue Plan. Within the $1.9 trillion law, a $350 billion fund for state and local governments was designed to meet a dire set of circumstances along the lines of the Great Recession: a potentially catastrophic short-term budget shortfall followed by a slow economic recovery.Mr. Biden declared it would help states and municipalities rehire all “those laid-off police officers, firefighters, teachers and nurses.”The $350 billion in rescue funds would be handed out by 2022 in increments, with recipients given until 2026 to spend it. That timeline was meant to gird states and cities against another economic slowdown, said Gene Sperling, the presidential adviser overseeing the rescue plan.Yet rather than limping through a recovery, the country enjoyed the fastest economic growth in nearly four decades and saw the unemployment rate plummet. Government revenues surged across much of the country, and governors of once-beleaguered states, like California and Minnesota, announced proposals to give residents tax cuts or one-time rebates.Some state and local government payrolls are smaller than they were before the pandemic; many municipalities face a backlog in services from courts to coroners’ offices, and they are not immune to inflation and fuel shocks.The rescue spending still represents something of an insurance policy against a new recession. But for state and local leaders, the money is clearly something more than that.As government revenues began returning, the Treasury Department issued guidance encouraging cities and counties to treat rescue funding as a flexible resource that could be deployed for purposes faintly related to Covid-19.Some initiatives will kick in faster but affect fewer people: In Richmond, the mayor’s office has endorsed a grant of about $350,000 to Daily Planet Health Services, a network of clinics for low-income residents.Parker Michels-Boyce for The New York TimesIf municipalities could make the case that a social problem worsened because of the pandemic, then they could probably use rescue plan funding.Under the federal legislation, Mayor Wade Kapszukiewicz knows that Toledo, Ohio, is due $180 million over two years, a colossal sum for a city of about 270,000 people.His administration outlined a combination of short- and long-term improvements, including demolishing blighted buildings, creating affordable housing projects and targeted spending on public safety and child care.Mr. Kapszukiewicz is a rare Democrat who may have been helped politically by the funding. The mayor won re-election by a wide margin in November; in his victory speech, he cited the American Rescue Plan as a reason for his city to be optimistic.“None of us in public life have ever had an opportunity like this,” Mr. Kapszukiewicz said.Cities and counties cannot enact programs that would go bankrupt once the money expires. That has encouraged governments to use it on one-time investments that could be completed by the 2026 deadline — and underwrite policy experiments on a limited scale.Construction on a home that will be offered for sale through the Maggie Walker Community Land Trust in Richmond.Parker Michels-Boyce for The New York TimesMayor Michelle Wu of Boston, a progressive Democrat, has pledged to spend hundreds of millions on affordable housing initiatives. Ms. Wu, who campaigned on eliminating fares for mass transit, is using about $8 million of rescue plan money — from more than half a billion allotted to her city — to make three bus lines free for two years.She hopes demonstrating the value of free transit will create momentum to enact the policy without federal money.“Our goal is to resist the temptation to divvy up these funds into 10,000 photo ops,” Ms. Wu said, “and instead truly focus on transformational change.”Ms. Wu said she had been up front with her constituents that the federal money made her transit policy possible, but she said many were not focused on its origins.“I think if you talk to people out and about, living their lives in our neighborhoods, they don’t care where the funding comes from,” she said.The potential of these programs is unproven, and in many cases years away — a challenge for Democrats who would like to run on a record of concrete accomplishments this fall.“You tell them about the American Rescue Plan,” Mr. Biden said to House members, “and they say, ‘What the hell are you talking about?’”Linda Scott said she had heard nothing of the coming upgrades to Richmond’s Southside Community Center. “I know that we’re getting lots of money, but what we’re doing with it, I’m not sure,” she said.Parker Michels-Boyce for The New York TimesChris Frelke, Richmond’s parks director, said the city would spend $78 million creating four community centers.Parker Michels-Boyce for The New York Times‘It Just Does Not Connect’A short drive from Richmond’s Thomas B. Smith Community Center is where the city of Richmond ends and Chesterfield County begins. A historically Republican suburb that is wealthier and whiter than Virginia’s capital city, Chesterfield County has already received more than $34 million through the American Rescue Plan. A second installment of that size is due later.The Republican-led county board has announced a major upgrade of parks and other construction projects, including a school and police station.The county’s finances remained sturdy throughout the pandemic and are now so robust that the board of supervisors approved a reduction in the real estate tax. The rescue plan funding allowed the county to accelerate some projects, local officials said, but they would likely have undertaken many of them without federal help.Christopher Winslow, the Republican chair of the county board, said the projects would have a “long-lasting and significant effect on citizens.” But in a fiscally robust county like his, Mr. Winslow said, the funding was less a rescue than a “bonanza.”By the time the first tranche of rescue money arrived, Mr. Winslow said, there was “a sense that the real pain was largely behind us.” That view is shared by many Republicans in Congress, who criticized the original price tag of the legislation and proposed clawing back some of the money.During a recent meeting of the United States Conference of Mayors, several White House officials, including Mitch Landrieu, the former New Orleans mayor, urged city leaders to do more to promote the rescue money — or risk seeing Congress redirect some of the funding elsewhere.After shedding its conservative roots to back Mr. Biden for president in 2020, Chesterfield County shifted back to the right to support a Republican, Glenn Youngkin, for governor.Lashrecse Aird, a former Democratic state legislator who represented a slice of Chesterfield County, said the rescue plan was of “no value whatsoever” to Democrats in Virginia’s 2021 elections. Ms. Aird, who lost her seat in the House of Delegates in November, said voters were scarcely aware of the federal aid.“It just does not connect. That is just the honest to goodness truth,” Ms. Aird said. “Even when you’re talking about schools, so much of this stuff is so far down the line before it’s anything you can see.”Richmond’s Southside Community Center is slated to balloon in size and capacity.Parker Michels-Boyce for The New York Times More

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      5 Big Questions for the Political Year Ahead

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      Inflation and the pandemic are hurting President Biden’s popularity, but the midterms are still months away.Hi. Welcome to On Politics, your guide to political news. We’re your hosts, Leah and Blake.We know it feels early, but it really isn’t, politically speaking. It’s 2022, and the midterm elections have started, whether we’re emotionally prepared or not. With control of Congress and key states at stake, we’re watching about a dozen competitive Senate races, 30 or so governor’s races and a few dozen competitive House races, along with a host of primaries and lower-tier contests.Here are five questions that could shape the outcome.1. Does inflation cool off?The reasons behind the surge in inflation are complex. But for months, Republicans have banged home a simple attack: It’s President Biden’s fault. And that’s been devastatingly effective.The Consumer Price Index had risen 6.8 percent last year through November — the fastest in four decades. Most troubling for the White House: Gasoline and groceries have led the way. Research shows that public approval ratings of presidents track closely with gas prices.Taming inflation by November won’t be easy, economists say.“There’s little that can be done to affect the overall inflation rate over the next six to nine months,” Larry Summers, a former Treasury secretary, told us.Summers is urging the Biden administration to show a “united front” against inflation through rhetoric and key Federal Reserve Board appointments, and to resist populist calls to attack corporations for raising prices. “I think they flirt with the idea that it’s greedy meatpackers causing inflation,” he said, “which is modestly counterproductive.”Inflation isn’t the only reason Biden is one of the most unpopular presidents in 70 years, with an average approval rating of just under 43 percent. He is also struggling on crime, government spending, immigration and taxes in recent polls.Although Biden isn’t on the ballot in 2022, he’s the leader of the Democratic Party. In midterm elections, presidents with job approval ratings below 50 percent have seen their parties lose an average of 37 House seats.The only president who rebounded significantly in his second year? Donald J. Trump.2. Does the Covid-19 pandemic finally recede?Biden got elected in part by promising to “beat the virus.” More than 62 percent of Americans are now fully vaccinated, according to C.D.C data. There are no more follies in the White House briefing room. New medicines are coming.But two years on, the coronavirus is still with us. More than 1,000 Americans on average are dying of Covid-19 each day. Public health officials keep issuing confusing messages. The new Omicron variant is exposing flaws in the U.S. testing regimen. Life is not back to normal.The murky results make us wonder whether Biden can reap a political windfall if and when conditions improve.Redistricting at a GlanceEvery 10 years, each state in the U.S is required to redraw the boundaries of their congressional and state legislative districts in a process known as redistricting.Redistricting, Explained: Answers to your most pressing questions about redistricting and gerrymandering.Breaking Down Texas’s Map: How redistricting efforts in Texas are working to make Republican districts even more red.G.O.P.’s Heavy Edge: Republicans are poised to capture enough seats to take the House in 2022, thanks to gerrymandering alone.Legal Options Dwindle: Persuading judges to undo skewed political maps was never easy. A shifting judicial landscape is making it harder.“We just have to continue to keep our heads down, focus on solving the problems, focus on what we can do to deal with Covid, continuing to try to get vaccination rates up, continuing to try to work through this challenge,” said Representative Dan Kildee, a Michigan Democrat running for re-election.And though many Republicans have resisted vaccines, masks and other measures to combat the pandemic, there are no signs that voters intend to punish them for it.“If you’re Biden, I don’t think you want to go into the midterms having the discussion we’re having with Covid,” said Lee M. Miringoff, director of the Marist College Institute for Public Opinion. “That discussion has gotten very stale with people.”3. How does redistricting shake out?About 30 states have finalized new congressional maps based on 2020 census data. For some incumbents, new maps mean facing primaries against other sitting members of Congress. For others, new maps might offer a convenient excuse to retire rather than taking on a colleague in a primary or testing their political strength in newly competitive seats.So far, it’s safe to say the House battleground has shrunk. A handful of districts that were competitive in 2018 and 2020 won’t be in 2022. In Texas, for example, Democrats and Republicans will be fighting for control of just a few districts, down from about 10 in 2020.But even after every state passes its final lines, courts can intervene. Kelly Burton, president of the National Democratic Redistricting Committee, called the maps passed in North Carolina and Ohio the “worst-case scenario for Democrats,” but expects those to change as a result of lawsuits.“I think there will be a sufficient number of competitive seats for Democrats to hold the House in 2022 even in a tough cycle,” Burton said. “I feel cautiously optimistic.”Even if things could have gone worse for Democrats in the redistricting process, they’re still at a disadvantage in the race for the House. Democrats oversee redistricting in about half as many House districts as Republicans, and history is working against the president’s party, which has lost House seats in all but two midterm elections since the 1940s.4. Can Democrats pass their agenda in Congress?Senator Joe Manchin III seemed to answer that question with a knife-twisting “no” in a Fox News interview before the holidays, announcing he could not support the Democrats’ $1.75 trillion social policy bill, the Build Back Better Act.But there’s too much at stake for Democrats to just give up. So Senate leaders are quietly trying to revive Build Back Better, along with federal voting rights legislation that would need to somehow overcome a Republican filibuster. Even Oprah is getting involved.Some Democrats argue for breaking Build Back Better into chunks: “For example, if we can move on prescription drug pricing, if we can move forward on child care, things that literally end up being part of that kitchen table conversation,” Kildee, the Michigan Democrat, told us.It could be months before those efforts succeed, if ever, and, in the meantime, Democrats in vulnerable seats are venting their frustration over the impasse. The longer the bickering in Washington drags on, the longer they’ll be stuck in limbo.Understand How U.S. Redistricting WorksCard 1 of 8What is redistricting? More

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      La inflación pone en aprietos a los líderes populistas de derecha

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      Los líderes de Turquía, Hungría y Brasil enfrentan problemas generados por el aumento global de precios antes de los comicios nacionales.Para todos aquellos que serían un desafío para Jair Bolsonaro en la próxima elección presidencial, incluida la prensa, el Supremo Tribunal Federal y los liberales, el aguerrido líder de derecha tiene una respuesta: “Solo Dios me saca de aquí”.Pero Bolsonaro podría perder el poder debido a una dificultad inesperada y para la cual su manual político no tiene una respuesta fácil: la inflación.En Brasil, un país con antecedentes relativamente recientes de episodios inflacionarios desastrosos, los precios suben a los niveles más altos de las últimas dos décadas. La moneda ha ido perdiendo su valor constantemente, al depreciarse alrededor del 10 por ciento contra el dólar solo en los últimos seis meses. Y su economía, la mayor de América Latina, volvió a entrar en recesión en el tercer trimestre del año.Eso ha inquietado a personas como Lucia Regina da Silva, una asistente de enfermería retirada de 65 años de edad que solía apoyar a Bolsonaro. Ha visto cómo en el último año los precios al alza han erosionado el poder de compra de su humilde pensión mensual.“Yo creía que este gobierno mejoraría nuestra vida”, dijo Da Silva en una mañana reciente, mientras empujaba un carrito de supermercado casi vacío —algunas verduras y artículos de uso personal era todo lo que le alcanzaba— por los pasillos de Campeão, una cadena de supermercados económicos de Río de Janeiro. “Pero esto fue un error”.Bolsonaro forma parte de una generación de populistas de derecha que, en la última década y media han ascendido al poder en democracias como Turquía, Brasil y Hungría y cuyos mandatos han coincidido, al menos en principio, con periodos de sólido desempeño económico en sus países. Han permanecido en el poder azuzando las pasiones nacionalistas y causando profundas divisiones en el electorado con temas culturales candentes. En el camino se han apropiado de los medios y amedrentan a sus oponentes.Ahora estos líderes autoritarios —entre ellos Bolsonaro, el primer ministro de Hungría Viktor Orban y el presidente de Turquía Recep Tayyip Erdogan— batallan con el alza de los precios y enfrentan elecciones nacionales en los próximos dos años. La inflación, un peligro nuevo e inesperado, amenaza con organizar y animar a la oposición política en los países de estos tres líderes de un modo que pocos habrían predicho hace unos meses.En Hungría, donde los precios al consumidor aumentan a la mayor velocidad desde 2007, los sondeos sugieren que Orban enfrentará su elección más dura el próximo año, cuando el costo de vida y los bajos salarios serán las principales preocupaciones para los votantes.En Hungría, las encuestas sugieren que el primer ministro Viktor Orban se enfrentará a las elecciones más difíciles de su historia el próximo año, pues el costo de la vida y los bajos salarios se convierten en las principales preocupaciones.Foto de consorcio por John ThysLos votantes en la cercana República Checa —que ha enfrentado una inflación creciente y elevados costos de energía—acaban de sacar del poder por un estrecho margen a Andrej Babis, el primer ministro multimillonario populista y de derecha del país.La situación de Bolsonaro, cuyo gobierno ha sido muy afectado por la gestión de la crisis de covid, se ha tambaleado y las encuestas lo muestran muy por detrás de quien probablemente sea su contendiente en 2022, el expresidente Luiz Inácio Lula da Silva.En preparación, Bolsonaro ha empezado a poner los cimientos para disputar los resultados de la votación del año entrante, que los sondeos sugieren que perdería si se realizara hoy. “Quiero decirles a aquellos que quieren lograr que en Brasil no me elijan, que solo Dios me quitará”, le dijo a una multitud entusiasta en Sao Paulo en septiembre.Pero Da Silva ya ha incorporado la crisis económica a su incipiente campaña. “El gobierno de Bolsonaro es responsable de la inflación”, dijo en una entrevista. “La inflación está fuera de control”.La situación es más seria en Turquía, donde las políticas económicas poco ortodoxas del presidente Erdogan han desatado una crisis monetaria total. El valor de la lira se colapsó aproximadamente 45 por ciento este año. Y los precios aumentan a una tasa oficial de más de 20 por ciento anual, una cantidad que los cálculos extraoficiales ubican en un porcentaje mayor.Los países con líderes derechistas no son los únicos que se tambalean por la inflación. En Estados Unidos los precios aumentan a la mayor velocidad registrada desde 1982. Y los populistas de izquierda, como los que gobiernan en Argentina, también compiten contra feroces corrientes inflacionarias, que los tienen a la defensiva.El repunte representa una ruptura repentina con la tendencia de crecimiento lento e inflación moderada que dominó la economía mundial durante aproximadamente una docena de años antes del impacto de la pandemia. Ese telón de fondo de bajo crecimiento permitió a los poderosos bancos centrales de Estados Unidos, la Unión Europea y el Reino Unido mantener bajas las tasas de interés. Y esas decisiones tuvieron grandes implicaciones para los países más pobres de todo el mundo.Eso se debe a que las políticas de bajo interés formuladas por los bancos centrales, entre ellos la Reserva Federal, reducen los retornos que los inversionistas en los países ricos pueden conseguir al comprar bonos del gobierno en sus países de origen, lo que los impulsa a emprender inversiones más arriesgadas en mercados emergentes que prometen mayores retornos.Los economistas dicen que el flujo de dinero hacia los países en desarrollo podría haber sido un elemento poco apreciado del éxito del que han gozado los líderes populistas de derecha en años recientes, pues les brindó un viento económico favorable que coincidió con sus mandatos.Turquía, que en 2009 sufrió una aguda recesión, pudo recuperarse de una manera relativamente rápida gracias a un auge de préstamos de inversionistas extranjeros que le dieron un gran impulso al crecimiento. La elección de Bolsonaro en 2018 coincidió con un renovado impulso para disminuir las tasas de interés de la Reserva Federal, lo que llevó a los inversionistas estadounidenses a comprar más deuda de mercados emergentes y ayudar a levantar el real.“Desde la recesión financiera global, el ambiente macroeconómico global fue una bendición para los autoritarios”, dijo Daron Acemoglu, profesor de economía en el Instituto Massachusetts de Tecnología que ha estudiado el deterioro de las democracias. “Básicamente, con tasas de interés muy bajas, hizo que muchos países que ya tenían o democracias débiles o semi autoritarismos, o francos autoritarismos, siguieran siendo atractivos para el capital extranjero”.Pero cuando la economía global empezó a recuperarse de la pandemia este año, una combinación de perturbaciones en la cadena de suministro, la impresión de moneda de los bancos centrales y el gasto público dirigido a aprovechar la recuperación dieron lugar a un alto incremento en los precios de todo el mundo. Esto hizo que los líderes de muchos países en desarrollo ajustaran sus políticas y que los inversionistas globales repensaran sus inversiones en esos mercados.Claudia Calich, líder de deuda en mercados emergentes en M&G Investments en Londres, ha invertido en bonos gubernamentales turcos, con denominación en liras, durante años. Pero, según Calich, el aumento en la presión pública que Erdogan ejerció este año en el banco central para recortar las tasas de interés ocasionó que el fondo se deshiciera de toda su inversión.En Turquía, liderada por el presidente Recep Tayyip Erdogan, el valor de la lira ha perdido alrededor del 45 por ciento este año y los precios aumentan a una tasa oficial de más del 20 por ciento anual.Burhan Ozbilici/Associated Press“Tan pronto como empezamos a ver este año que los cambios iban en la dirección equivocada, es decir hacia una mayor reducción de tasas, entonces nos empezó a preocupar la moneda”, dijo Calich. “Esta ha sido, hasta ahora, la respuesta equivocada en materia de políticas. Y sí, hemos estado muy contentos de salirnos de esa posición”.Hay pocas opciones políticamente aceptables para los países de mercados emergentes que se enfrentan a un repunte inflacionario y al debilitamiento de las monedas. Pero por varias razones, el aumento inflacionario es un terreno político especialmente complicado para populistas como los señores Orban, Erdogan y Bolsonaro, quienes se enfrentan a elecciones en 2022 o 2023.Su enfoque personalista de la política —y el hecho de que todos llevan años en el poder— dificulta que intenten evadir la culpa por las condiciones económicas. Al mismo tiempo, su tipo de populismo, que enfatiza las rivalidades nacionalistas y en el pasado ha dado resultados, puede parecer fuera de la realidad para los ciudadanos cuyo nivel de vida se desploma rápidamente.El remedio tradicional para la inflación requeriría una combinación de tasas de interés más elevadas por parte del banco central y menor gasto público. Pero ambas medidas podrían afectar el crecimiento económico y el empleo, al menos el corto plazo, lo que podría empeorar las perspectivas de reelección.En Turquía, Erdogan —que ha adoptado un estilo de liderazgo cada vez más autoritario desde que sobrevivió a un intento de golpe en 2016— ha descartado una respuesta convencional. En semanas recientes, el Banco Central de la República de Turquía, que Erdogan básicamente controla personalmente, ha recortado las tasas de interés repetidamente.La mayoría de los observadores consideran que Erdogan ha empeorado una situación de por sí difícil, pues la perspectiva de más recortes a las tasas de interés y el declive monetario ha hecho que los inversionistas extranjeros retiren su dinero de Turquía.Al mismo tiempo, los vientos políticos también parecen soplar en contra de Erdogan. La situación económica que cada vez está peor ha motivado algunas protestas callejeras dispersas. Los políticos de oposición piden unas elecciones anticipadas para lidiar con la crisis mientras insisten en criticar a Erdogan por lo que dicen que ha sido una gestión económica desastrosa.Orban y Bolsonaro, quienes alguna vez se perfilaron como conservadores al formular los presupuestos, han abandonado sus posiciones anteriores. En cambio, están impulsando un aumento a corto plazo del gasto gubernamental para proporcionar una entrada de efectivo a los votantes antes de las elecciones del próximo año. Sin embargo, no está claro que este enfoque ayude, ya que es probable que empeore las presiones inflacionarias.Una tarde reciente, sentado en una banca de un mercado local de productores en Budapest, Marton Varjai, de 68 años, se reía del cheque por aproximadamente 250 dólares que Orban le había enviado hace poco como parte de un pago que el gobierno autorizó para todos los pensionados, que representan un 20 por ciento de la población.Varjai cobra una pensión mensual de aproximadamente 358 dólares, de los cuales destina el 85 por ciento al pago de medicinas y servicios. “El resto es lo que tengo para vivir”, dijo y añadió que le preocupaba que le alcanzara para llegar a fin de mes.Estos sentimientos se están convirtiendo en un foco cada vez más importante para los votantes húngaros. Un estudio reciente de Policy Solutions, un grupo progresista de expertos en Budapest, encontró que los húngaros están más preocupados por el costo de la vida y los bajos salarios.“Si estos temas dominan las campañas, no será bueno para Fidesz”, dijo Andras Biro-Nagy, director de Policy Solutions, en referencia al partido oficialista de Orban.Matt Phillips cubre mercados financieros. Antes de integrarse a The New York Times en 2018, fue editor jefe de Vice Money e integrante fundador del personal en Quartz, el sitio de negocios y economía. Pasó siete años en The Wall Street, donde cubría mercados bursátiles y de bonos. @MatthewPhillipsCarlotta Gall es la jefa del buró de Istanbul y cubre Turquía. Previamente ha reportado sobre los efectos de la Primavera Árabe desde Túnez, de los Balcanes durante la guerra en Kosovo y Serbia y ha cubierto Afganistán y Pakistán. @carlottagall • Facebook More