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      Global Markets Cheer on Better Than Expected Inflation Data

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      A better-than-expected Consumer Price Index report triggered a big surge in stocks and bonds, as investors bet that interest rates will begin to fall.Upbeat investors see Tuesday’s inflation data as a possible turning point in the Fed’s battle against soaring prices.Michael M. Santiago/Getty ImagesGood news for global markets Yesterday’s impressive rally in U.S. stocks and bonds has gone worldwide this morning, as investors see central banks making gains in their fight against inflation. Adding to the good news was a breakthrough in the House last night that could avert a government shutdown.S&P 500 futures signal further gains at the opening bell. The question now is whether this represents a false dawn on inflation, or the start of a durable decline in rising costs — and interest rates.Here’s what’s exciting investors: Yesterday’s cooler-than-expected Consumer Price Index data has shifted discussion in the markets from potential interest rate hikes to cuts, and what that might mean for stocks. President Biden, whose poll ratings have been hurt by inflation, also cheered the numbers.Other promising data points came out this morning. Inflation in Britain fell to its lowest level in two years. And consumer spending and industrial output in China rebounded last month, a hopeful sign for the world’s No. 2 economy.Market optimists have moved up their bets on rate cuts. Futures markets this morning pointed to the Fed starting to lower borrowing costs by May, sooner than previous estimates of closer to the end of 2024.Less aggressive is Mohit Kumar, the chief financial economist at Jefferies, who wrote today that big rate cuts would begin after the presidential election next year. Jefferies predicts the Fed’s prime lending rate going to 3 percent by the end of 2025 from its current level of 5.25 to 5.5 percent.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.We are confirming your access to this article, this will take just a moment. However, if you are using Reader mode please log in, subscribe, or exit Reader mode since we are unable to verify access in that state.Confirming article access.If you are a subscriber, please  More

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      Bad Feelings About the Economy Sour Arizona Voters on Biden

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      The White House has hailed new investments and new jobs, yet many voters in a battleground state are chafing at inflation and housing costs.If President Biden hopes to replicate his narrow victory in Arizona, he will need disillusioned voters like Alex Jumah. An immigrant from Iraq, Mr. Jumah leans conservative, but he said he voted for Mr. Biden because he could not stomach former President Trump’s anti-Muslim views.That was 2020. Since then, Mr. Jumah, 41, said, his economic fortunes cratered after he contracted Covid, missed two months of work as a trucking dispatcher, was evicted from his home and was forced to move in with his mother. He said he could no longer afford an apartment in Tucson, where rents have risen sharply since the pandemic. He is now planning to vote for Mr. Trump.“At first I was really happy with Biden,” he said. “We got rid of Trump, rid of the racism. And then I regretted it. We need a strong president to keep this country first.”His anger helps explain why Mr. Biden appears to be struggling in Arizona and other closely divided 2024 battleground states, according to a recent poll by The New York Times and Siena College.Surveys and interviews with Arizona voters find that they are sour on the economy, despite solid job growth in the state. The Biden administration also fails to get credit for a parade of new companies coming to Arizona that will produce lithium-ion batteries, electric vehicles and computer chips — investments that the White House hails as emblems of its push for a next generation of American manufacturing.Breanne Laird, 32, a doctoral student at Arizona State University and a Republican, said she sat out the 2020 elections in part because she never thought Arizona would turn blue. But after two years without any pay increases and after losing $170,000 trying to fix and flip a house she bought in suburban Phoenix, she said she was determined to vote next year, for Mr. Trump.She bought the investment property near the peak of the market last year, and said she watched its value slip as mortgage rates rose toward 8 percent. She said she had to max out credit cards, and her credit score fell.Arizona’s housing market fell farther than most parts of the country after the 2008 financial crisis, and it took longer to recover. Few economists are predicting a similar crash now, but even so, Ms. Laird said she felt frustrated, and was itching to return Mr. Trump to power.“I’m even further behind,” she said. “I see the value in voting, and plan to vote as much as possible.”Voters waited in line to cast their ballots at dawn in Guadalupe, Ariz., in 2020.Adriana Zehbrauskas for The New York TimesA majority of Arizona voters in the recent New York Times/Siena survey rated the country’s economy as poor. Just 3 percent of voters said it was excellent.Arizona experienced some of the worst inflation in the country, largely because housing costs shot upward as people thronged to the state during the pandemic. Average monthly rents in Phoenix rose to $1,919 in September from $1,373 in early 2020, a 40 percent increase according to Zillow. Average rents across the country rose about 30 percent over the same period.Home prices and rents have fallen from their peaks this year, but even so, economists say that the state is increasingly unaffordable for middle-class families, whose migration to Arizona has powered decades of growth in the state.Arizona’s economy sprinted out of the pandemic, but economists said the speed of new hiring and consumer spending in the state has now eased. The state unemployment rate of 4 percent is about equal to the national average, and the quarterly Arizona Economic Outlook, published by the University of Arizona, predicts that the state will keep growing next year, though at a slower pace.Arizona has added 280,000 jobs since Mr. Biden took office, according to the federal Labor Department, compared with 150,000 during Mr. Trump’s term. Phoenix just hosted the Super Bowl, usually a high-profile boost to the local mood and economy.Barely a week goes by without Arizona’s first-term Democratic governor, Katie Hobbs, visiting a groundbreaking or job-training event to talk up the state’s economy or the infrastructure money arriving from Washington.Arizona Gov. Katie Hobbs on stage during the 2023 Inauguration Ceremony at the Arizona State Capitol in Phoenix.Rebecca Noble for The New York TimesMr. Biden was even farther behind Mr. Trump in another poll being released this week by the Phoenix-based firm Noble Predictive Insights. That survey of about 1,000 Arizona voters said Mr. Trump had an eight-point lead, a significant swing toward Republicans from this past winter, when Mr. Biden had a two-point edge.Mike Noble, the polling firm’s chief executive, said that Mr. Trump had built his lead in Arizona by consolidating support from Republicans and — for the moment — winning back independents. Respondents cited immigration and inflation as their top concerns.“Economists say, ‘Look at these indicators’ — People don’t care about that,” Mr. Noble said. “They care about their day-to-day lives.”Bill Ruiz, the business representative of Local 1912 of the Southwest Mountain States Carpenters Union, said the Biden administration’s infrastructure bill and CHIPS Act were bringing billions of dollars into Arizona, and helping to power an increase in union jobs and wages. Carpenters in his union were working 7 percent more hours than they were a year ago, and the union’s membership has doubled to 3,400 over the past five years.“We’re making bigger gains and bigger paychecks,” he said. “It blows me away people don’t see that.”Political strategists say Mr. Biden could still win in Arizona next year, if Democrats can reassemble the just-big-enough coalition of moderate Republicans and suburban women, Latinos and younger voters who rejected Mr. Trump by 10,000 votes in 2020. It was the first time in more than two decades that a Democrat had carried Arizona and its 11 electoral votes.The same pattern was seen in last year’s midterm elections, when Arizona voters elected Democrats running on abortion rights and democracy for governor, attorney general and secretary of state, defeating a slate of Trump-endorsed hard-right Republicans.Abortion is still a powerful motivator and a winning issue for Democrats, but many Arizona voters now say their dominant concerns are immigration, inflation and what they feel is a faltering economy.Grant Cooper, 53, who retired from a career in medical sales, is the kind of disaffected Republican voter that Democrats hope to peel away next year. He supports abortion rights and limited government, and while he voted for Mr. Trump in 2020, he said he would not do so again.He said his personal finances and retirement investments were in decent shape, and he did not blame the president for the spike in gas prices in 2022. Still, he said he plans to vote for a third-party candidate next year, saying that both Mr. Biden and Mr. Trump were out-of-touch relics of a two-party system that was failing to address long-term challenges.“They squibble and squabble about the dumbest things, rather than looking at things that could improve our economy,” he said. “The Republicans are fighting the Democrats. The Democrats are fighting the Republicans. And what gets done? Nothing.”David Martinez, 43, is emblematic of the demographic shift that has made Arizona such a battleground. He and his family moved back to Phoenix after 15 years in the San Francisco Bay Area, where he still works remotely in the tech industry. He voted for Mr. Biden in 2020, and said he was worried about the threat Mr. Trump poses to free elections, democracy and America’s future in NATO.His working-class friends and extended family don’t share the same concerns. These days, the political conversations with them usually begin and end with the price of gas (now falling) and eggs (still high).“It falls on deaf ears,” Mr. Martinez said of his arguments about democracy. “They feel down about Biden and inflation and his age. They’re open to giving Trump a second term or skipping the election entirely.”Camille Baker More

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      For Both Trudeau and Biden, Polls Suggest an Uphill Political Path

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      The economy, and particularly inflation, has soured voters on both leaders, polls indicate, though well in advance of upcoming votes.When Prime Minister Justin Trudeau and President Biden next meet, they will have something to commiserate over: their dismal standings in polls.President Biden and Prime Minister Justin Trudeau have seen their poll ratings slump.Kenny Holston/The New York TimesFor months now, Mr. Trudeau’s Liberal Party has been rapidly sinking in public opinion surveys, while more recent polls suggest that the Conservatives under Pierre Poilievre would win any election held now.Similarly, new polls by The New York Times and Siena College have found that Mr. Biden is trailing Donald J. Trump in five of the six most important battleground states.[Read: Trump Leads in 5 Critical States as Voters Blast Biden, Times/Siena Poll Finds][The detailed Times/Siena Poll data]Comparing the political situations in Canada and the United States is a fraught business because of a variety of differences between the countries and their political systems. And, of course, Americans don’t vote for another year, and Canada’s next federal election is likely to be two years off.But disaffected voters in both countries share a major concern: inflation, and the economy in general.“There’s ample evidence that inflation is destructive to an incumbent government’s performance and how people feel about it,” David Coletto, the chairman and chief executive of Abacus Data, told me.Mr. Coletto’s latest poll found that 39 percent of committed voters would vote for the Conservatives and 26 percent would vote Liberal, while the New Democrats were backed by 18 percent of those voters. (In Quebec, the Bloc Québécois was supported by 34 percent of committed voters.)That is a long way down for Mr. Trudeau from his early days as prime minister, when his leadership approval ratings hit an eye-watering 73 percent in one poll. The current Abacus poll found that 53 percent of respondents had a negative view of Mr. Trudeau, with just 29 percent holding a favorable view.Many factors, Mr. Coletto said, contribute to that dissatisfaction, but inflation, higher interest rates, housing costs and a general feeling of ennui about the economy are at the top.Voters polled in the Times/Siena survey, by a 59 percent to 37 percent margin — the largest gap relating to any issue in the survey — said they had more trust in Mr. Trump than Mr. Biden on the economy.Some of the criticism of Mr. Trudeau’s economic record, Mr. Coletto said, is based on perceptions that don’t match reality. In an earlier Abacus survey, Mr. Coletto found that most Canadians incorrectly believed that inflation was higher in Canada than in other countries. International Monetary Fund statistics for October show that Canada’s 3.6 percent rate is well below Germany’s 6.3 percent or France’s 5.6. Similarly, Mr. Biden gets little or no credit for the significant job creation under his watch.“But it doesn’t calm nerves to say, ‘Folks, things are good here relatively speaking,’ when relative to where they were five years ago, things are not better,” Mr. Coletto said. “And that’s how people evaluate their situation because people don’t live in those other countries where inflation still remains very high.”High housing prices, inflation and interest rates are all weighing down Mr. Trudeau’s poll numbers.Nathan Denette/The Canadian Press, via Associated PressThe other big factor for Mr. Trudeau, Mr. Coletto said, is simply that many voters are tiring of a leader like him, who has been around since 2015 and led his party through three successful elections. Mr. Biden may only be in his first term as president, but he has been a national political figure since first being elected to the Senate 50 years ago.Mr. Biden’s age, 80, is also an issue. In the Times/Siena survey, 71 percent of respondents said he was “too old” to be effective as president. Only 39 percent thought that of Mr. Trump, who is 77.“Inflation kills governments plus time kills governments,” Mr. Coletto said.While the standing of Mr. Trudeau’s Liberal government has never before dipped this low in the polls, there have been other periods when his popularity has ebbed, only to recover. And relatively few Liberals have publicly suggested it might be time for the prime minister to step aside despite his repeated vow to fight the next election. Similarly, calls for Mr. Biden to retire from prominent Democrats remain limited.“Is the prime minister going to stay, or go?” Mr. Coletto said. “I have no idea. But where his leadership is today is a very different place than it was five months ago.”Trans CanadaNew Zealand’s curling team is living in the Chartwell Colonel Belcher Retirement Residence while it trains in Canada.Todd Korol for The New York TimesThe latest, and youngest, residents of the Chartwell Colonel Belcher Retirement Residence in Calgary are the members of New Zealand’s curling team, who have come to Canada to hone their skills.The trial of David DePape, who the police say broke into Nancy Pelosi’s San Francisco home and bludgeoned her husband in 2022, when she was still speaker of the House, is underway. Mr. DePape, a Canadian, was living illegally in the United States at the time. His lawyer is not contesting prosecutors’ evidence.Following its bankruptcy filing, WeWork closed four Canadian locations. A Canadian real estate investor told The New York Times that the bankruptcy signified the end of projections that flexible office space would one day account for a significant portion of commercial office rentals.Marcel Dzama, the Winnipeg-born artist, spoke with Julia Halperin about his collection of 250 handmade masks.Kathleen Mansfield, a Toronto pharmacist, is among a group of people who told The Times Magazine about why they wanted space to be their final resting place.A first-class dinner menu from the Titanic dated April 11, 1912, which was found in a photo album from the 1960s that once belonged to a community historian in Dominion, Nova Scotia, is expected to sell for upward of $86,000 at auction.A native of Windsor, Ontario, Ian Austen was educated in Toronto, lives in Ottawa and has reported about Canada for The New York Times for the past 16 years. Follow him on Twitter at @ianrausten.How are we doing?We’re eager to have your thoughts about this newsletter and events in Canada in general. Please send them to nytcanada@nytimes.com.Like this email?Forward it to your friends, and let them know they can sign up here. More

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      Biden and a Feel-Bad Economy

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      Since Tuesday’s big Democratic electoral victories, I’ve been seeing some speculation to the effect that the 2024 election may be marked by a reverse coattail effect: that President Biden, whose poll numbers have supposedly been weighed down by a bad economy, may be lifted up by local candidates who have been racking up wins over social issues.Well, I’ve been delving into some economic and political history — which is, after all, most of what we have to go on in such matters — and I’m having some problems with this narrative.First, Biden is not, in fact, presiding over a bad economy. On the contrary, the economic news has been remarkably good, and history helps explain why.Nonetheless, many Americans tell pollsters that the economy is bad. Why? I don’t think we really know; what we can say is that historical experience throws some cold water on one popular view about the sources of American discontent.Finally, could Biden have pursued alternative policies that would have left him in a better political position? The lessons of history suggest no. If economic perceptions are a big problem for Democrats next year (which remains far from certain), this may be more a matter of bad luck than of bad policy.Start with the state of the economy. The simple reality of the past year or so is that America has accomplished what many, perhaps most, economists considered impossible: a large fall in inflation without a recession or even a big rise in unemployment. If you don’t trust me, listen to Goldman Sachs, which on Wednesday issued a report titled “The Hard Part Is Over,” noting that we’re managing to combine rapid disinflation with solid growth, and that it expects this happy combination — the opposite of stagflation — to continue.What went right? Back in 2021, Biden administration economists published an essay on historical inflation episodes, arguing that the closest parallel to current events was the inflation surge after World War II, which subsided after the economy resolved wartime disruptions and readjusted to peacetime production. That analysis looked much too optimistic for a while, as inflation went much higher for much longer than the Council of Economic Advisers expected.At this point, however, with a soft landing looking ever more plausible, it seems as if the council, while it underestimated the size and duration of the shock, got the basic story right.Yet voters aren’t happy. The most widespread story I’ve been hearing is that people don’t care about the fact that prices have been leveling off; they’re angry that prices haven’t gone back down to their prepandemic levels.This makes some psychological sense. As of September, consumer prices were about 19 percent higher than they were on the eve of the pandemic. Average wages were also up, by about the same amount, and wages for nonsupervisory workers (the great bulk of the work force) were up considerably more. But human nature being what it is, it’s natural for people to feel that they earned their higher incomes, only to have inflation snatch away their gains. And lecturing voters about why that’s the wrong way to think about it is not, shall we say, a promising political strategy.But here’s where my historical doubts come in.This isn’t the first time we’ve seen a temporary surge in prices that leveled off but never went back down. The same thing happened after World War II and again during the Korean War, the latter surge being roughly the same size as what we’ve seen since 2020. Unfortunately, we don’t have consumer sentiment data for the 1940s, although some political scientists believe that the economy actually helped Harry Truman win his upset election victory in 1948. But we do have such data for the early 1950s, and it suggests that people were relatively upbeat on the economy despite higher prices. Why should this time be different?Also, it seems worth noting that many voters have demonstrably false views about the current economy — believing, in particular, that unemployment, which is near a 50-year low, is actually near a 50-year high.Whatever is really going on, was there something Biden or the Federal Reserve could have done that would have mollified voters?Here’s how I think about it: The supply chain disruptions caused by the pandemic made it inevitable that prices of some goods would rise sharply. The only way to have avoided overall inflation would have been to force major price cuts for other goods and services.And everything we know from history suggests that trying to impose deflation — falling prices — on large parts of the economy would have had disastrous effects on employment and output, something like the quiet depression Britain inflicted on itself after World War I when it tried to go back to the prewar gold standard.So what’s actually going to happen in the next election? I have no idea, and neither do you. What I can say is that if you believe that Biden made huge, obvious economic policy mistakes and could easily have put himself in a much better position, you probably haven’t thought this thing through.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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      En Argentina, Javier Milei asciende y el peso se hunde

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      Javier Milei se ha convertido en el favorito en las elecciones argentinas de este mes al prometer dolarizar la economía. En respuesta, el peso argentino se desploma.Javier Milei sigue siendo solamente un candidato a la presidencia de Argentina. Pero ya está provocando él solo un choque financiero en una de las mayores economías de América Latina.El valor de la moneda argentina está cayendo en picada por las críticas de Milei, un libertario de extrema derecha que se ha convertido en el principal candidato presidencial al prometer sustituir el peso argentino por el dólar estadounidense.El lunes, Milei prosiguió sus ataques contra el peso al desaconsejar a los argentinos que realicen inversiones en esta moneda. “El peso es la moneda que emite el político argentino y por ende no puede valer ni excremento”, dijo en un conocido programa de radio. “Esa basura no sirve ni para abono”.Solo el lunes, la tasa de cambio no oficial del peso, que refleja la valoración de la moneda por parte del mercado e impulsa los precios en Argentina, cayó el 7 por ciento, y luego otro 10 por ciento el martes por la tarde.A esa tasa de cambio no oficial, el martes por la tarde, con un dólar se compraban 1035 pesos, la primera vez que el peso rebasó la barrera de los 1000 pesos frente al dólar. Antes de que Milei ganara las elecciones primarias el 14 de agosto, con un dólar se compraban 660 pesos. En abril de 2020, al comienzo de la pandemia, la cifra era de 80 pesos.La escalada de la crisis llevó al Banco Central de la República Argentina, que Milei ha prometido cerrar, a emitir una declaración extraordinaria el lunes por la tarde: “Argentina mantiene un sistema financiero líquido y solvente” y añadió que respalda los depósitos bancarios argentinos.El martes, las principales asociaciones bancarias del país instaron a los candidatos a “mostrar responsabilidad en sus campañas y declaraciones públicas”.Milei, un economista excéntrico que quiere poner de cabeza el gobierno y el sistema financiero del país, es el favorito en las elecciones presidenciales argentinas del 22 de octubre, aunque las encuestas dan a entender que la contienda podría llegar a una segunda vuelta en noviembre.Su ascenso ha dominado la conversación a nivel nacional y ha acelerado la caída del peso.La mañana después de que Milei sorprendiera al país al quedar primero en las primarias presidenciales de agosto, las presiones del mercado obligaron al gobierno a devaluar el peso un 20 por ciento.Simpatizantes de Milei durante un mitin de campaña el mes pasado en San Martín, ArgentinaLuis Robayo/Agence France-Presse — Getty ImagesLos comentarios de Milei están generando “una disparada en la inflación o un eventual problema bancario, que es lo que él está alentando”, dijo Marina Dal Poggetto, economista argentina y exanalista del Banco Central de su país. “Lo que estás viendo es un inicio de una corrida que puede frenar o no. Hay que ver lo que pasa el 22 de octubre. Todavía Milei no ganó”.Milei ha aceptado comparaciones con Donald Trump y Jair Bolsonaro, expresidente de extrema derecha de Brasil, y ha sido noticia por negar el papel del ser humano en el cambio climático, criticar duramente al papa y por sus promesas de prohibir el aborto y legalizar la venta de órganos humanos.Pero la pieza central de su campaña han sido sus lecciones, a veces con tono catedrático, sobre política económica, diseñadas para persuadir a los votantes de que él es el único que puede arreglar la galopante inflación de Argentina.El país se encuentra inmerso en una de sus peores crisis financieras en décadas, con una inflación anual que supera ya el 120 por ciento y precios que cambian a la semana, o incluso más rápido, en muchas tiendas y restaurantes.Con los precios tan altos, los argentinos deben viajar con fajos grandes de billetes, que cada día valen menos. El gobierno argentino emitió este año un billete de 2000 pesos, pero ya vale menos de 2 dólares.Para comprar artículos costosos, como propiedades o automóviles, los argentinos pagan con billetes de 100 dólares estadounidenses. Para conseguir esos billetes, a menudo tienen que comprarlos a cambistas ilegales que ofrecen dólares en el centro de Buenos Aires como si fueran narcotraficantes, porque el gobierno federal, escaso de dólares, ha impuesto límites estrictos a la cantidad de la divisa que la gente puede comprar a la semana.Sergio Massa, ministro de Economía argentino y principal oponente de Milei, lo acusó el lunes de intentar deliberadamente desestabilizar la moneda argentina para causar estragos antes de la votación. “Por un voto más, está timbeando el ahorro de la gente”, dijo Massa, un político de centro-izquierda del partido que ha dirigido el país durante 16 de los últimos 20 años.El martes, Patricia Bullrich, candidata presidencial de centroderecha, culpó tanto a Milei como al gobierno actual en una entrevista durante una visita de campaña. Afirmó que el gobierno estaba tratando de bajar los impuestos sin recortar el gasto, mientras que Milei estaba empeorando la situación.El martes, Milei respondió a las críticas de que sus comentarios estaban agravando la crisis económica con un video que publicó en línea con una recopilación de sus intervenciones en las que compara el peso con excremento a lo largo de años de apariciones televisivas. “Es vergonzonzo el espectáculo que están dando los políticos tratando de obtener rédito político del descalabro económico inventando responsabilidades”, dijo. “Si quieren encontrar a los responsables mírense en el espejo, sinvergüenzas”.En un acto con empresarios celebrado la semana pasada, Milei afirmó que cuanto menor fuera el valor del peso, más fácil sería dolarizar Argentina.Si es elegido presidente, es probable que Milei enfrente grandes dificultades para llevar a cabo sus propuestas. Milei ha dicho que probablemente necesitará una inyección de 40.000 millones de dólares para cambiar la moneda oficial de Argentina, aunque no está claro que pueda conseguir tanto dinero. Argentina ya tiene dificultades para pagar su deuda de 44.000 millones de dólares con el Fondo Monetario Internacional.Sergio Massa, ministro de Economía de Argentina y principal oponente de Milei, lo ha acusado de intentar desestabilizar deliberadamente la moneda argentinaAgustin Marcarian/ReutersMilei también ha dicho que el Congreso argentino tendría que aprobar muchas de sus propuestas, que incluyen profundos recortes del gasto público, la eliminación de muchos impuestos y la privatización de todas las empresas estatales del país.Es probable que su incipiente partido político, La Libertad Avanza, controle una pequeña parte de los escaños del Congreso, lo que lo obligaría a forjar alianzas con otros partidos a los que ha calificado de criminales.Argentina lleva décadas lidiando con una inflación alta, y tuvo un episodio de hiperinflación en la década de 1980, cuando los clientes se apresuraban a comprar artículos antes de que los dependientes que llevaban etiquetadoras de precios pudieran hacer otra ronda de aumentos. Pero la escalada de precios, impulsada por una moneda débil, ha vuelto en los dos últimos años.Algunos de los problemas de Argentina se deben a factores económicos mundiales, como la pandemia y la guerra en Ucrania, pero en gran parte, según los economistas, se deben a que el gobierno ha gastado más de la cuenta para pagar universidades, salud, energía y transporte público gratuitos o muy subvencionados. Para financiar todo eso, Argentina ha impreso a menudo más pesos.El resultado ha sido una creciente falta de confianza en la moneda, que ha obligado al gobierno a crear más de una decena de tasas de cambio distintas para el peso, porque su propia tasa de cambio oficial ya no refleja la valoración del mercado.Las nuevas tasas incluyen una para los turistas, otra para los exportadores de soja y otra para los argentinos que viajaban a Catar para ver a su selección nacional de fútbol ganar el Mundial de 2022. El llamado Dólar Blue es la tasa paralela más importante —fijada por un pequeño grupo de empresas financieras y que aparece en vivo en los noticieros de televisión— y es la forma en que la mayoría de los argentinos transfiere sus pesos a dólares en el mercado clandestino.El martes, buscando apaciguar algunos temores del mercado, el gobierno consolidó varias de esas tasas en una nueva que al menos un contador denominó Dólar Elecciones.Natalie Alcoba More

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      In Argentina, a Far-Right Candidate Rises and the Peso Plunges

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      Javier Milei has become the favorite in Argentina’s election this month by pledging to dollarize the economy. In response, the Argentine peso is crashing.Javier Milei is still just a candidate to be president of Argentina. But he is already single-handedly delivering one of Latin America’s biggest economies a financial shock.The value of Argentina’s currency is plummeting under criticism by Mr. Milei, a hard-right libertarian who has become the leading presidential candidate by promising to replace the Argentine peso with the U.S. dollar.On Monday, Mr. Milei continued his attacks on the peso by discouraging Argentines from holding any investments in the currency. “The peso is the currency issued by the Argentine politician and therefore is worth less than excrement,” he said on a popular radio show. “That trash is not even good as manure.”The peso’s unofficial rate, which reflects the market’s valuation of the currency and drives prices in Argentina, fell nearly 7 percent on Monday alone, reducing its value by about 15 percent over a week.At that unofficial rate, $1 bought 945 pesos as of Tuesday morning. Before Mr. Milei won a primary election on Aug. 14, $1 bought 660 pesos. In April 2020, at the start of the pandemic, the figure was 80 pesos.The escalating crisis prompted Argentina’s Central Bank, which Mr. Milei has promised to shutter, to issue an extraordinary statement on Monday afternoon that “Argentina maintains a liquid and solvent financial system” and that it backs Argentine bank deposits.Mr. Milei, an eccentric economist who wants to upend the country’s government and financial system, is the front-runner in Argentina’s presidential election on Oct. 22, though the race, polls suggest, could still go to a November runoff.His ascent has dominated the national conversation and accelerated the peso’s decline.The morning after Mr. Milei surprised the nation by finishing first in presidential primaries in August, market pressures forced the government to devalue the peso by 20 percent.Supporters of Mr. Milei during a campaign rally last month in San Martín, Argentina.Luis Robayo/Agence France-Presse — Getty ImagesMr. Milei’s comments are causing “a spike in inflation or an eventual banking problem, which is what he is encouraging,” said Marina Dal Poggetto, an Argentine economist and former analyst at Argentina’s Central Bank. “What you are seeing is the beginning of a run that may or may not stop. We have to see what happens on October 22. Milei still hasn’t won.”Mr. Milei has embraced comparisons to Donald J. Trump and Jair Bolsonaro, Brazil’s former far-right president, and has made headlines for his denials of the role of humans in climate change, his harsh criticisms of the pope and his aims to ban abortion and legalize sales of human organs.But the centerpiece of his campaign has been his sometimes professorial lectures on economic policy designed to persuade voters that he alone can fix Argentina’s soaring inflation.The country is in the midst of one of its worst financial crises in decades, with annual inflation now topping 120 percent and prices at many stores and restaurants changing weekly, if not faster.Sergio Massa, Argentina’s finance minister and Mr. Milei’s principal opponent, accused Mr. Milei on Monday of deliberately trying to destabilize Argentina’s currency to wreak havoc ahead of the vote. “In order to gain one more vote, he is gouging people’s savings,” said Mr. Massa, a center-left politician from the party that has led the country for 16 of the past 20 years.At an event with business leaders last week, Mr. Milei said that the lower the value of the peso, the easier it would be to dollarize Argentina.If elected president, Mr. Milei is likely to face major challenges in accomplishing his proposals. Mr. Milei has said that he will likely need a $40 billion infusion of dollars to switch Argentina’s official currency, though it is unclear he would get that much money. Argentina is already struggling to pay its $44 billion debt to the International Monetary Fund.Sergio Massa, Argentina’s finance minister and Mr. Milei’s principal opponent, has accused Mr. Milei of deliberately trying to destabilize Argentina’s currency.Agustin Marcarian/ReutersMr. Milei has also said that Argentina’s Congress would have to approve many of his proposals, which include deep cuts to government spending, the elimination of many taxes and privatizing all of the nation’s state companies.His nascent Liberty Advances political party would likely control a small share of the seats in Congress, forcing him to forge alliances with other parties that he has labeled criminal.Argentina has struggled with high inflation for decades, including a bout of hyperinflation in the 1980s when customers were rushing to buy items before clerks wielding price guns could make another round of increases. But spiking prices, driven by the weak currency, have roared back over the past two years.Some of Argentina’s problems have been driven by global economic factors, like the pandemic and the Ukraine war, but much of it, economists say, is because the government has overspent to pay for free or deeply subsidized universities, health care, energy and public transportation. To finance all that, Argentina has often printed more pesos.The result has been an increasing lack of confidence in the currency, which has forced the government to create more than a dozen separate exchange rates for the peso, because its own official rate no longer reflects the market’s valuation.The new rates include one for tourists, one for soybean exporters and one for Argentines who were traveling to Qatar to watch their national football team win the 2022 World Cup. The so-called Blue Dollar is the most important parallel rate — set by a small group of financial companies and listed live on television news programs — and is how most Argentines transfer their pesos to dollars on the underground market.On Tuesday, seeking to assuage some market fears, the government consolidated several of those rates into a new rate that at least one accountant called the Election Dollar.Natalie Alcoba More

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      In Argentina, the U.S. Dollar Could Soon Become King

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      Americans complain that inflation has eroded the value of their money, but the U.S. dollar looks lovely to the people of Argentina, where consumer prices rose 124 percent in August from a year earlier. The threat of hyperinflation has become a central issue in the presidential election on Oct. 22, which The Times has described as “a new test of the strength of the far right around the world.” The leading candidate in the race, which could go to a November runoff, is a radical libertarian who promises to bring rising prices under control by getting rid of the peso and fully dollarizing the Argentine economy.Buena idea, o mala?I’ll get to the pros and cons of dollarization in a minute, but first a few words on why Argentines would even consider such a drastic step. Argentina is blessed with abundant natural resources. Early in the 20th century, it was richer than Germany or France. “Until the 1930s, the French used the phrase ‘riche comme un Argentin’ to describe the foolishly rich,” the economists Edward L. Glaeser, Rafael Di Tella and Lucas Llach wrote in the Latin American Economic Review in 2018.But Argentina’s economy has been stunted by disastrous economic policies and chronic political instability. There were periods of military rule, hyperinflation, defaults on external debt, protectionism and under-industrialization. Argentina has been a democracy since 1983 but successive governments, whether left- or right-leaning, haven’t managed to match neighbors such as Chile, Uruguay and Brazil in bringing down inflation and stabilizing finances.That record of failure is written on the currency. Since 1970, Argentina has burned through several currencies: the peso ley, the peso argentino, the austral and now the peso convertible. Today there is no single exchange rate with the dollar that all residents can use. As colorfully explained recently in The Buenos Aires Herald, there is the official, or “wholesale,” exchange rate, for international trade; the savers’ exchange rate, which is supposedly for savers but is not widely accessible; and the “blue” dollar, which is essentially the black-market rate. Foreign tourists can buy pesos at yet another rate, the M.E.P., short for Mercado Electrónico de Pagos. There are even temporary exchange rates, such as the Vaca Muerta rate, which is named after where it was announced last month (not because it’s for buying or selling dead cows).Javier Milei, who leads the polls in the presidential race, wants to chuck the whole rickety system, abolish the central bank and adopt the U.S. dollar, as three smaller Latin American countries — Ecuador, El Salvador and Panama — have already done.Milei, it’s important to say, has extreme and I would argue insupportable stands on a number of issues. He wants to drastically cut taxes and spending, as The Times wrote, “including by charging people to use the public health care system; closing or privatizing all state-owned enterprises; and eliminating the health, education and environment ministries.” He is an economist and a member of the legislature who has large dogs named Milton Friedman, Robert Lucas and Murray Rothbard.But let’s separate the message from the messenger and look at the dollarization proposal on its merits. The biggest plus is that it would most likely get rid of Argentina’s high inflation overnight. The money available for spending inside Argentina would be only the dollars that the country already has in reserves or manages to acquire by, say, running trade surpluses with the United States or borrowing. The general price level can’t rise if there is no increase in the supply of dollars, unless the velocity of circulation increases. As Milton Friedman (the economist, not the dog) once said, “inflation is always and everywhere a monetary phenomenon.”Dollarizing the economy is like locking oneself in handcuffs and then throwing away the key. It’s an act of desperation when nothing else works.And like most acts of desperation, dollarization has big drawbacks. By switching to dollars, Argentina would effectively adopt the monetary policy of the United States, thus losing the ability to raise or lower interest rates to suit local conditions. It would lose the profit known as seigniorage that comes from printing money. And dollarization wouldn’t solve the structural problems that have caused high inflation, such as government overspending, as Guillermo Ortiz, a former governor of Mexico’s central bank, told reporters in September.This week I interviewed Iván Werning, an economist at the Massachusetts Institute of Technology who grew up in Argentina and earned his bachelor’s and master’s degrees there before getting a doctorate at the University of Chicago. With two graduate students who are fellow Argentines, he has written two recent papers about dollarization, which he calls a “dangerous delusion,” and has wrestled with opponents on X, formerly Twitter.Werning isn’t persuaded that dollarization really would tie the government’s hands. In an email to me, he pointed out that Argentina tried once before to link to the dollar, through currency board “convertibility,” but abandoned the program in 2002. “Argentina could reissue the peso in short order, in a manner similar to how its provinces have issued government pesos in the past to pay for bills,” he wrote. Ecuador, he said, has found “creative accounting ways” to loosen the constraint of its dollarization, such as having the central bank finance the treasury.The Argentine government doesn’t have enough dollars to replace all of its pesos at current exchange rates, even at the unofficial “blue” rate, Werning told me by phone. There are rich people with lots of dollars squirreled away abroad, but that doesn’t help the ordinary Argentine, he said. So in his view, if the conversion were done today, there could be an extreme shortage of money in the economy, which would most likely cause a deep recession because prices and wages would not adjust smoothly to the dollar scarcity. Postponing the conversion could make matters worse, by triggering an anticipatory burst of inflation, he added.The problem could be solved if Argentina were able to raise more dollars, but in that case it probably wouldn’t need to dollarize in the first place, he said.Understandably frustrated by years of dysfunction, the Argentine people are looking for a quick fix for inflation, Werning told me. But the quick fix would have bad consequences in the long term, he said. He prefers more conventional solutions such as bringing government budgets closer into balance. On that score, he is slightly hopeful.“Today there’s a lot more consensus” about the need to reduce spending, Werning said. The message is coming not just from Milei, the extreme libertarian, but also from Patricia Bullrich, a center-right candidate who served in the cabinet of Mauricio Macri. Even Sergio Massa, a candidate who is the economy minister in the current, center-left government of Albert Fernandez, has talked about cutting spending, although “his actions do not match his words,” Werning said. Whether any of the candidates would be as resolute in office, when anti-austerity protests begin, is another question. But Werning said, “If ever there was a chance” for righting Argentina’s finances, “it might be now.”The Readers WriteDonald Trump and his lawyers persist in re-arguing points and generally annoying the judge because they hope to elicit an intemperate response that could be read as bias. I am a trial lawyer, and I have seen this happen. Because this is a bench trial, a mistrial would take a real circus breaking out. But they may be able to argue on appeal that Trump was denied a fair trial.James M. MillerSarasota, Fla.Your opinion on the “fix” for our budget problem is spot on, but lawmakers’ concern about job security exceeds their willingness to do the best job for the country. And so we languish with incidental actions that appear helpful but don’t make the real change we need.Kathy CrosbyGrand Rapids, Mich.Quote of the Day“America is ungovernable; those who have served the revolution have plowed the sea.”— Simón Bolívar, South American revolutionary leader, in 1830, as quoted by Sheldon Liss and Peggy Liss in “Man, State, and Society in Latin American History” (1972) More

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      The Question of Joe Biden

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      Nearly two decades ago, I tried to write a group biography about the senators whose offices happened to be on the second floor of the Russell Office Building on Capitol Hill. The group included John McCain, Joe Biden, Lindsey Graham and Chuck Hagel. I got to know and study each of those senators during that long-ago-abandoned project.The more I covered Biden, the more I came to feel affection and respect for him. Then, as now, he could be a tough boss, occasionally angry and hard on his staff. But throughout his life, Biden has usually been on the side of the underdog. I’ve rarely met a politician so rooted in the unpretentious middle-class ethos of the neighborhood he grew up in. He has a seemingly instinctive ability to bond with those who are hurting.Our politics have gotten rougher over the ensuing years but that hasn’t dampened Biden’s basic humanity. When he was vice president, I remember a searing meeting with him shortly after his son Beau died, his grief raw and on the surface. And like many, I’ve felt the beam of his empathy and care myself. A year and a half ago, the day after my oldest friend fell victim to suicide, Biden heard about it and called me to offer comfort. He just let me talk about my friend and through his words and tone of voice joined me in the suffering. I experienced the solace of being seen.He has his faults — the tendency to talk too much, the chip on his shoulder about those who think they are smarter than he is, the gaffes, that episode of plagiarism and the moments of confusion — but I’ve always thought: Give me a leader who identifies with those who feel looked down upon. Give me a leader whose moral compass generally sends him in the right direction.But I’ve also come to fear and loathe Donald Trump. I cannot fathom what damage that increasingly deranged man might do to this country if given a second term. And the fact is that as the polls and the mood of the electorate stand today, Trump has a decent chance of beating Biden in November of next year and regaining power in 2025.Voters know both men very well at this point, so when I hear Democrats comforting themselves that people will flock to Biden if the alternative on the ballot is Trump, I worry they are kidding themselves. Biden’s approval ratings are stubbornly low. In a recent ABC poll, only 30 percent of voters approve of his handling of the economy and only 23 percent approve of his handling of immigration at the southern border. Roughly three-quarters of American voters say that Biden, at 80, is too old to seek a second term. There have been a string of polls showing that large majorities in his own party don’t want him to run again. In one survey from 2022, an astounding 94 percent of Democrats under 30 said they wanted a different nominee.I thought Biden’s favorability ratings would climb as economic growth has remained relatively strong and as inflation has come down. But it just hasn’t happened.So I’m emotionally torn these days, the way so many are — feeling strong affection and appreciation for Joe Biden, and yet feeling gripped simultaneously by a pounding fear that a Biden-led party will lose next year, and lead to a Trumpian Götterdämmerung. Like many Americans, I’ve found myself having The Conversation over and over again, with friends, sources and people who work in Democratic politics: whether Biden is the best candidate to defeat Trump, his chances of winning, if there’s some better course.Some Democrats tell me in these talks that they hope their party leaders will somehow persuade Biden to retire and open the door for a fresher candidate. Others argue that Biden needs some stiff primary competition. Most of the filing deadlines for the early primaries are approaching — Nevada and New Hampshire this month, Michigan and California and more in December. There’s still time for other Democrats to jump in the race.But many party leaders act as if this is madness, speaking with a fervor that is loyal but also patronizing: Biden is vehement about running again, and there’s zero chance he’ll be talked out of it, so Democrats had better just deal with that fact. Plus a serious primary challenge would merely weaken the inevitable Biden candidacy, the way Ted Kennedy weakened Jimmy Carter in 1980 and Pat Buchanan hurt George H.W. Bush in 1992. We just have to pull this guy over the line.I don’t find this passive fatalism compelling. The party’s elected officials are basically urging rank-and-file Democrats not to be anxious about a situation that is genuinely anxiety-inducing. Last month Gov. Phil Murphy of New Jersey told The Times, “This is only a matter of time until the broad party, and broadly speaking, Americans, converge with the opinions of folks like myself.” Really? Surely if there’s a lesson we should have learned from the last decade, it’s that we should all be listening harder to what the electorate is trying to say.I’ve tried to set aside my affection for the man and look anew at the question of Biden and 2024: Should we really do this?***The thing that so many of us are stuck on is Biden’s age, of course. On this subject I have some personal observations. I’ve been interviewing the man for a quarter century, including during his presidency. The Republicans who portray him as a doddering old man based on highly selective YouTube clips are wrong. In my interviews with him, he’s like a pitcher who used to throw 94 miles an hour who now throws 87. He is clearly still an effective pitcher.People who work with him allow that he does tire more easily, but they say that he is very much the dynamic force driving this administration. In fact, I’ve noticed some improvements in his communication style as he’s aged. He used to try to cram every fact in the known universe into every answer; now he’s more disciplined. When he’s describing some national problem, he is more crisp and focused than he used to be, clearer on what is the essential point here — more confidence-inspiring, not less.What about four or five years from now, at the end of a second term? Will he still be competent enough to lead? Biden is fit, does not smoke or drink alcohol, exercises frequently and has no serious health conditions, according to the White House. A study in The Journal on Active Aging of Biden’s and Trump’s health records from before the 2020 elections found that both men could qualify as “super-agers” — the demographic that maintains physical and mental functioning beyond age 80.But Biden’s age is obviously and understandably going to be a greater concern than it was in 2020. It seems especially to worry some White House staff members or whoever is trying to cocoon him so he doesn’t make a ruinous tumble. But if the president I see in interviews and at speeches is out campaigning next year against an overweight man roughly his own age, then my guess is that public anxieties on this front will diminish.To me, age isn’t Biden’s key weakness. Inflation is. I agree with what Michael Tomasky wrote in The New Republic: Biden’s domestic legislative accomplishments are as impressive as any other president’s in my adult life. Exactly as he should have, he has directed huge amounts of resources to the people and the places that have been left behind by the global economy. By one Treasury Department estimate, more than 80 percent of the investments sparked by the Inflation Reduction Act are going to counties with below-average college graduation rates and nearly 90 percent are being made in counties with below-average wages. That was the medicine a riven country needed.But it is also true that Biden’s team overlearned the lessons of the Obama years. If Barack Obama didn’t stimulate the economy enough during the Great Recession, Biden stimulated it too much, contributing to inflation and the sticker shock people are feeling.Anger about inflation is ripping across the world, and has no doubt helped lower the approval ratings of leaders left, right and center. Biden’s 40 percent approval rating may look bad, but in Canada, Justin Trudeau’s approval rating is 36; in Germany Olaf Scholz is at 29; in Britain Rishi Sunak is at 28; in France Emmanuel Macron is at 23; and in Japan Fumio Kishida is also at 23. This is a global phenomenon. As the journalist Josh Barro argued recently, “Inflation is the reason Biden could not deliver on his core promise to return the country to normal and the main reason his poll numbers are bad.”Because of inflation, Americans now trust Trump to handle the economy more than Biden. As ABC News reported, voters are looking back and retroactively elevating their opinion of Trump’s presidency. When he left office only 38 percent of Americans approved of his performance as president. Today, 48 percent do, his high-water mark.Inflation also contributes to a corrosive national mood that you might call American Jaundice. Nearly three out of every four Americans believe the country is on the wrong track. Bitterness, cynicism and distrust pervade the body politic. People perceive reality through negative lenses, seeing everything as much worse than it is. At 3.8 percent, America’s unemployment rate is objectively low, but 57 percent of voters say that the unemployment rate is “not so good” or “poor.”The nation’s bitter state of mind is a self-perpetuating negativity machine. Younger people feel dismissed; the older generations are hogging power. Faith in major institutions is nearing record lows. The country is hungry for some kind of change but is unclear about what that might look like. As the incumbent, Biden will be tasked with trying to tell a good news story of American revival, which is just a tough story to sell in this environment. And Biden is not out there selling it convincingly.The bracing reality is that Trump’s cynicism and fury match the national mood more than Biden’s faithful optimism. It’s one of the reasons Trump is now leading Biden by 1.2 percentage points in the RealClearPolitics polling average. It’s one of the reasons Trump is in a stronger polling position now than at any point in 2016 or 2020. It’s one of the reasons even some Republicans are mystified by the way Democrats are standing pat behind their incumbent.“They seem hell bent on nominating the one Democrat who would lose to Donald Trump,” Karl Rove told me recently. “They’ve got a lot of talent on their side, let’s not kid ourselves,” he continued, pointing to younger Democrats like Gretchen Whitmer, Mitch Landrieu, Gavin Newsom and Cory Booker.***But once you start to think carefully about whether Democrats could nominate one of those non-Biden alternatives, all sorts of other concerns rise into view. First, there is the Kamala Harris problem. If the door were open, the vice president would probably run even though her poll numbers are lower than Biden’s. Her shambolic 2020 presidential campaign does not inspire confidence, and her record includes being a leading player on the administration’s divisive immigration policies. People can make an all-star wish list of other Democratic nominees, but in the real world there is simply no easy way to push Harris aside.Then there’s the fact that there is no other viable candidate in the Democratic Party with a national base of support. The rising Democratic stars Rove referred to are all talented, but none have compellingly stood on the national stage. In the polling right now, possible candidates not named Biden or Harris are in the low single digits.Plus, there are good reasons no major Democrat has so far stepped up to mount a challenge. Anyone who did throw a hat in the ring would face such vitriolic contempt from the party establishment, it would probably be career-ending. Such a candidate might also face withering criticism from rank-and-file Democrats. As a former Obama administration official, Dan Pfeiffer, has pointed out, Biden has higher favorability ratings among Democrats than Trump does among Republicans. Democrats may be anxious about the old guy running, but that doesn’t mean they’d automatically warm to someone trying to take him down.Finally, and most important, when you really start to imagine what it would look like if the Democrats didn’t nominate Biden, one whopping issue becomes clear.A lot of the dump-Biden conversations are based on a false premise: that the Democratic Party brand and agenda are somehow strong and popular enough that any number of younger candidates could win the White House in 2024, and that if Biden were just to retire, all sorts of obstacles and troubles would go with him.But Biden is not the sole or even primary problem here. To the extent that these things are separable, it’s the Democratic Party as a whole that’s ailing. The generic congressional ballot is a broad measure of the strength of the congressional party. Democrats are now behind. According to a Morning Consult poll, Americans rate the Democratic Party as a whole as the more ideologically extreme party by a nine-point margin.When pollsters ask which party is best positioned to address your concerns, here too, Democrats are trailing. In a recent Gallup poll 53 percent of Americans say Republicans will do a better job of keeping America prosperous over the short term while only 39 percent thought that of the Democrats. Fifty-seven percent of Americans said that the Republicans would do a better job keeping America safe, while only 35 percent favor the Democrats. These are historically high Republican advantages.Here are the hard, unpleasant facts: The Republicans have a likely nominee who is facing 91 charges. The Republicans in Congress are so controlled by a group of performative narcissists the whole House has been reduced to chaos. And yet they are still leading the Democrats in these sorts of polling measures.This is about something deeper than Joe Biden’s age. More and more people are telling pollsters that the Republicans, not the Democrats, care about people like me.When I think back to the glory days of the Democratic Party, the days of the New Deal and the Great Society, even to the days when Joe Biden was a young senator being mentored by the likes of Hubert Humphrey, the Democratic Party was at its core a working- and middle-class party. Over the last half century, the Democrats have become increasingly the party of the well-educated metropolitan class.It is not news that the Democrats have been losing white working-class voters ever since the emergence of the Reagan Democrats. But today, the party is bleeding working-class voters of all varieties. As John B. Judis and Ruy Teixeira point out in their forthcoming book, “Where Have All the Democrats Gone?” Democrats have been losing ground among Hispanics for the last few years. In 2012, Barack Obama carried nonwhite voters without a college degree by a 67-point margin. In 2020, Biden carried this group with a 48-point margin. Today, the Democratic ticket leads among this group by a paltry 16 points.But Democrats are losing something arguably more important than a reliable base of supporters. The party is in danger of letting go of an ethos, a heritage, a tradition. The working-class heart and soul the Democrats cultivated through the Roosevelt, Truman and Kennedy years rooted Democratic progressivism in a set of values that emphasized hard work, neighborhood, faith, family and flag. Being connected to Americans’ everyday experiences kept the party pinioned to the mainstream.As the party became dominated by the more educated activist and media sectors, it lost touch with some of what can be called its psychological and emotional power sources. It grew prone to taking flights of fancy in policy and rhetoric, be it Medicare for All or “defund the police,” going to places where middle-of-the-road voters would not follow. It became more vulnerable to the insular outlooks of its most privileged and educated members.This is what happened in 2020. There were moments in that campaign when it looked as if Bernie Sanders was going to run away with the race, sending the party into uncharted ideological waters. Most of the other candidates sprinted leftward. In a June 2019 debate, nine of 10 Democratic presidential candidates raised their hands when asked if they supported decriminalizing border crossings. Elizabeth Warren and Kirsten Gillibrand were even further left than their colleagues. The year prior, both of them called for dismantling Immigration and Customs Enforcement. College-educated voters are less worried about illegal immigration than high school-educated voters and that influence showed.Joe Biden was nominated in 2020 because he was the cure to this malady. He was the guy most plainly with roots in the working and middle class. He was the guy who didn’t engage in the culture war and identity politics theatrics. He was the most moderate major candidate in the race. Democrats from James Clyburn on down swung to Biden because he offered the most plausible connection back to the Democrats’ working-class soul — and it worked. Biden gave the party what it needed to come back to life.And that is the fact I keep returning to. Biden is not what ails the party. As things stand, he is the Democrats’ best shot at curing what ails the party.There is no other potential nominee who is so credibly steeped in knowing what life is like for working- and middle-class people, just as there was no other potential nominee in 2020. After watching him for a quarter century, I think he is genuinely most comfortable when he is hanging around the kinds of people he grew up with. He doesn’t send out any off-putting faculty lounge vibes. On cultural matters he is most defined by what he doesn’t do — needlessly offend people with overly academic verbiage and virtue signaling. That is why I worry when he talks too stridently about people on the right, when he name-calls and denounces wide swaths of people as MAGA.These cultural and spiritual roots give him not just a style but a governing agenda. He has used the presidency to direct resources to those who live in the parts of the country where wages are lower, where education levels are lower, where opportunities are skimpier. Biden’s ethos harks back to the ethos of the New Deal Democratic Party, but it also harks forward to something — to a form of center-left politics that is culturally moderate and economically aggressive. Aggressive in investing resources in the left-behind places, aggressive in using industrial policy to revive manufacturing, green tech and other industries, aggressive in using federal largess to bolster the care economy. His administration has put racial justice at the top of the agenda. It has moved the party beyond the technocratic centrism of the Clinton-Obama years.It is a first glimpse, but only a first glimpse, of a future Democratic Party that could once again compete for working- and middle-class support and would once again rest on its historical values.Something almost spiritual is at play here, not just about whether the Democrats can win in 2024, but who the Democrats are.As I’ve thought about Biden’s chances in 2024, I find myself deeply conscious of all the disadvantages that he and the Democrats have as they try to retain power, and preparing for what that could bring. But I also find myself arriving foursquare at the conclusion that rejecting the president now would be, in the first place, a mistake. He offers the most plausible route toward winning the working- and middle-class groups the Democrats need, the most plausible route toward building a broad-based majority party.But it would be worse than a mistake. It would be a renunciation of the living stream of people, ideas and values that flow at the living depths of the party, a stream that propelled its past glories and still points toward future ones.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