US economy

Subterms

    More stories

    • 138 Shares199 Views

      in US Politics

      US economy going strong under Biden – Americans don’t believe it

      by

      Americans do not trust the government’s economic news – or the media’s reporting of it – according to a Harris poll conducted exclusively for the Guardian that presents the White House with a major hurdle as it pushes Biden’s economic record ahead of next year’s election.The US has roared back from the Covid recession by official measures. But two-thirds of Americans are unhappy about the economy despite consistent reports that inflation is easing and unemployment is close to a 50-year low. And the poll suggests many are unaware of or don’t believe the positive economic news the government has reported.The results illustrate a dramatic political split on economic views – with Republicans far more pessimistic than Democrats. But unhappiness about the economy is widespread.
      Two-thirds of respondents (68%) reported it’s difficult to be happy about positive economic news when they feel financially squeezed each month (Republicans: 69%, Democrats: 68%).
      Two-thirds of Americans (65%) believe that the economy is worse than the media makes it out to be rather than better (35%).
      In August the unemployment rate was 3.8%, close to a 50-year low. But the poll found that 51% wrongly believe that unemployment is nearing a 50-year high rather than those who believe it’s actually low (49%).
      The lack of confidence in the economy has many academics and politicians puzzled. Some have blamed the US’s polarized politics and this was illustrated in the poll. But Harris’s data also shows that fears are widespread – and reinforced by disbelief of or ignorance about official figures and a mistrust of the media’s reporting of them.Some 82% of Republicans and 66% of independents believe the economy is worse than the media’s portrayal. But nearly half of Democrats (49%) also said the media viewed the economy too favorably.Overall, the poll found widespread despondency about the state of the economy. More than half of Americans (53%) believe the economy is getting worse instead of better or staying the same. Republicans and independents are more likely to think it’s getting worse (72% and 58%, respectively, v Democrats: 32%), while more Democrats think it’s getting better (32% v Republicans: 8%, independents: 13%).The results paint a difficult picture for Joe Biden, who is making “Bidenomics” – his economic policy record – a central plank of his re-election platform.The views of those familiar with Bidenomics showed a perhaps unsurprising party split. Some 60% of Democrats believe his plans are improving the US economy overall compared with 12% of Republicans.There is a widespread belief that Bidenomics is good in theory but isn’t being implemented well – something both Democrats and Republicans agree with (62% v 58%).Biden supporters have just launched a $13m advertising campaign extolling the president’s economic achievements, which include a landmark $1.2tn infrastructure and climate bill, massive investment in domestic microchips production and green energy solutions. His legislative actions are predicted to create 1.5m jobs per year for the next decade.That message may be hard to sell given the widespread disbelief of and ignorance about the health of the US economy highlighted by the poll.As well as being wrong about the unemployment data, respondents were unaware of, or chose to mischaracterize, other major economic data points.skip past newsletter promotionafter newsletter promotionThe widest measure of economic growth – gross domestic product – increased at a 2.1% annualized rate last quarter and has been steadily improving since the Covid downturn. But more respondents (59%) believe that the US economy is shrinking this year than those who believe it is growing (41%). More Republicans (72%) and independents (63%) believe the economy is shrinking than do Democrats. But still, a sizeable 44% of Democrats believe the economy is shrinking.The S&P 500 stock market index is up 16% so far this year. But 59% of respondents wrongly said they believe the S&P is down for the year compared with those who said they believe it is up (41%). The majority of all those asked said the S&P was down whether Republican (66%), independent (60%) or Democrat (52%).US wages are, finally, growing faster than inflation. But 75% of those polled wrongfully believe that wages aren’t keeping up with inflation. That view is held by the majority of Republicans (84%), independents (75%) and Democrats (67%).There was some good news for Biden. The poll found that 75% of respondents support at least one of the four main branches of Bidenomics: improving infrastructure, attracting high-tech electronics manufacturing, building clean energy manufacturing facilities and attracting more high-paying union jobs.Still, 51% of Americans believe that government spending under the current administration is having a negative impact on the US economy (Republicans: 72%, independents: 54%, Democrats: 30%) rather than a positive impact (21%) or no impact (28%). And only just over a third of Democrats (35%) believe it’s having a positive impact (Republicans: 11%, independents: 16%).“All these perceptual-reality gaps underscore Biden’s difficulty in claiming credit for economic gains. Americans either view the economy through their politics or aren’t feeling it in real life, or both,” said John Gerzema, the CEO of Harris Poll.
      This survey was conducted online within the US by the Harris Poll from 1 to 3 September among a nationally representative sample of 2,055 US adults, where 1,063 were familiar with Bidenomics. More

    • 163 Shares119 Views

      in US Politics

      US inflation in August rose to 3.7% amid sharp increase in energy prices

      by

      US inflation in August rose for the first time since June 2022, rising to 3.7% as a sharp increase in energy prices pushed prices up toward the end of the summer.Growth in prices still remains far below the decades-high inflation rates that were seen last summer, when the rate peaked at 9.1% in June. Still, an increase in inflation means the US economy is further from the Federal Reserve’s target rate of 2% and will probably make officials consider pushing interest rates up later this year.The price of energy commodities, including gas and oil, jumped up 10.5% over the last month, according to the latest Consumer Price Index data, which measures the prices of a basket of goods and services. Gas prices ticked up in August as Russia and Saudi Arabia continued aggressive cuts in supply, bringing the price of crude oil to 10-month high at $91 a barrel. Higher gas prices accounted for more than half of the increase in the overall inflation rate.Meanwhile core inflation, which measures the price of goods and services minus the volatile energy and food industries, actually decreased in August to 4.3%, down from 4.7% in July, reflecting the impact higher energy prices are having on the overall inflation rate.Even with the decrease in core inflation, which has been higher and going down at a slower rate than the 12-month inflation rate, inflation still remains far above the Federal Reserve’s target rate of 2%.Though price decreases have been seen in used cars and medical care services over the last few months, home prices have hit a near-record high in June, keeping core inflation stubbornly high. The median home price hit $413,80, the second-highest price ever, according to the National Association of Realtors. Home prices cooled slightly to $406,700 in July, but home prices still remain 7.3% higher than a year earlier.Even with inflation slightly up, the Fed is on track to keep interest rates the same at their next board meeting on 20 September. Economists say the Fed has had a pause planned for the meeting for a while as many officials say the economy has yet to feel the full effects of interest rates, which are at a 22-year high at 5.25% to 5.5%.But as the health of the economy continues to be hard to pin down – job growth has remained relatively stable even amid high interest rates, but inflation is still far from 2% – the Fed could still raise interest rates at future meetings. Future interest rate increases could introduce more volatility to the US economy, and potentially trigger a recession, though the Fed’s mission to bring down inflation has yet to bear dramatic consequences.The Fed chair, Jerome Powell, said last month that officials were aware of the precarity, saying they will “proceed carefully” as they decide what to do with interest rates. Powell has said the overall decline in inflation has been a “welcome development”, but it still remains high.“We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,” he said. More

    • 200 Shares159 Views

      in US Politics

      From abortion to January 6: where each Republican candidate in the debate stands on big issues

      by

      Republicans vying for the 2024 party nomination are set to take the stage in Milwaukee, Wisconsin, on Wednesday night for the first debate of the primary season.The candidates will certainly throw punches at each other and at Donald Trump, who has a significant lead in polls but is skipping the debate. But it’s also a chance for each candidate to present their policy agenda and voice their stance on key voter issues such as abortion and aid to Ukraine.Here’s where each candidate in Wednesday’s debate stands on issues such as abortion, immigration, the economy and continued aid to Ukraine.Ron DeSantisAbortion: DeSantis has supported bills restricting access to abortion – including a six-week ban in his own state of Florida – but has stopped short of saying he would support a federal ban.Economy: In a recently released economic plan, DeSantis said he would cut individual taxes and slash government spending. He also pushed for “American energy independence” and a rollback of electric vehicles.Immigration: As governor, DeSantis has enacted some of the country’s strictest laws against undocumented immigrants, including asking hospital patients to prove their legal status. He also made the controversial move to use public funds to send newly arrived migrants to Martha’s Vineyard in a political stunt. As president, he said he would eliminate the visa lottery and limit “unskilled immigration”.Foreign policy: He opposes additional US involvement in Ukraine and has pledged to reduce economic ties with “communist China” and said the US would no longer “kowtow to Wall Street”.January 6: DeSantis said it was “unfortunate” but “not an insurrection”.More: The current governor of Florida and a former congressman was widely expected to be Trump’s main primary challenger. But his favorability among Republicans has taken many hits, starting with a glitchy Twitter Spaces event hosted by Elon Musk. He has frequently touted his opposition to gender-affirming care for trans people and other public health measures such as mask mandates.Vivek RamaswamyAbortion: Ramaswamy told a crowd at the Iowa State Fair he is “unapologetically pro-life”. But his campaign earlier confirmed he would not back a national abortion ban.Economy: The biotech entrepreneur wants to “unshackle” the energy sector, saying the US should abandon its climate goals to drive down energy costs and boost its GDP. He is also in favor of some corporate and individual tax cuts.Immigration: Ramaswamy said he wants to deport “universally” and end birthright citizenship for children of undocumented immigrants, who would then be required to apply to become a citizen.Foreign policy: Ramaswamy has criticized US aid to Ukraine, saying it is strengthening Russia’s alliance with China.January 6: Ramaswamy condemned Trump the week after the January 6 attack but has walked back his criticism since then. Responding to a question for an Atlantic profile about what truly happened that day, Ramaswamy said: “I don’t know.” He has defended ex-president Trump across his four indictments.More: Time magazine labeled Ramaswamy a “breakout candidate”. The political outsider has steadily climbed the polls since launching his long-shot bid as an “anti-woke” patriot.Tim ScottAbortion: Scott, an evangelical Christian, is staunchly anti-abortion and said he would support a national 15-week ban.Economy: Scott supports tax cuts and stronger economic competition with China. As a senator, Scott championed legislation establishing “opportunity zones”, which are meant to increase economic development in low-income areas by incentivizing private investment, though critics say residents may not benefit from gentrification.Immigration: He is in favor of a wall along the US southern border to curb illegal migration and drug trafficking.Foreign policy: He broadly supports continued US aid to Ukraine and said Biden has not done enough. But some conservatives think he’s soft on China.January 6: Scott said he doesn’t believe the 2020 election was stolen and does not blame Trump for the violence at the Capitol.More: The South Carolina senator, who is the only Black Republican in the Senate, is an outspoken critic when it comes to teaching kids about race and gender in schools and has said: “America is not a racist country.”Nikki HaleyAbortion: The only woman on the debate stage, Haley is anti-abortion but has also called a federal abortion ban “unrealistic”.Economy: Haley wrote in an op-ed that she opposes raising the national debt limit and would “veto spending bills that don’t put America on track to reach pre-pandemic spending levels”.Foreign policy: The former US ambassador to the United Nations under Trump, Haley has labeled the Chinese Communist party an “enemy” and criticized Trump for trying to befriend the Chinese president, Xi Jinping.Immigration: Haley has vowed to tighten security at the US-Mexico border and add 25,000 patrol agents, as well as require companies to verify employees’ status online – which she signed into law in South Carolina as governor.January 6: Haley has called January 6 a “terrible day” and said Trump “went down a path that he shouldn’t have” in an interview with Politico.Chris ChristieAbortion: He has said he would not support a federal abortion ban.Economy: The former New Jersey governor has targeted “excessive government spending” as the reason for inflation and floated cuts to social security, including Medicare.Foreign policy: Christie, who has aligned himself with the hawkish, tough-on-China-and-Russia camp, visited the Ukrainian president, Volodymyr Zelenskiy, in a surprise trip earlier this month to affirm his support for continued US aid.Immigration: Christie said “immigrants are pouring over the border” in an attack against Trump’s campaign promise to build a border wall.January 6: Christie, who was in the running to be Trump’s VP after dropping out of the 2016 presidential race, is now Trump’s loudest critic. He broke with Trump over the January 6 Capitol attack, calling Trump a “coward” for not joining rioters.Mike PenceAbortion: The former vice-president, an evangelical Christian, is the loudest anti-abortion candidate and has condemned his opponents for refusing to back a six-week abortion ban.Economy: Pence has said his top priority is boosting the US economy and has called on the Fed to ditch its dual mandate – keeping employment high and inflation low – to focus solely on reducing inflation. He has also advocated for cutting social security benefits.Foreign policy: Pence has advocated for continued US aid to Ukraine and met with Volodymyr Zelenskiy during a surprise visit in June.Immigration: He has blasted the Biden administration’s immigration policy, describing a “stampede” from Central and South America, and has vowed to finish the border wall that began under Trump.January 6: Pence has campaigned heavily on his refusal to aid Trump in his effort to stop the certification of electoral results and has repeatedly condemned his ex-boss for his role in the Capitol attack.Doug BurgumAbortion: Burgum signed a law banning nearly all abortions in North Dakota but said he would not support a national ban.Economy: The governor of North Dakota, who is also a wealthy businessman, has touted North Dakota’s record as an energy-producing state and said he would prioritize growing the country’s tech and energy sectors.Foreign policy: Winning the “cold war with China” is a key pillar of Burgum’s message to voters.Immigration: Burgum said Biden hasn’t done enough to secure the US-southern border and supports stricter restrictions on migration.January 6: Burgum called for a stop to the violence at the Capitol on January 6 but said he thinks it’s time to “move on”.Asa HutchinsonAbortion: As governor of Arkansas, Hutchinson signed a near-total abortion ban and said he would support a national ban.Economy: He has floated extreme measures to balance the federal budget and reduce debt including cutting the federal non-military workforce by 10%.Immigration: Hutchinson supports harsh restrictions on immigration.Foreign policy: He said he would not cut economic ties with China but has advocated for more aggressive action to counter China’s threat against Taiwan. Politico describes Hutchinson’s foreign policy as a “compassionate internationalism” of the past.January 6: He said January 6 “disqualifies” Trump from running for president. More

    • 163 Shares169 Views

      in US Politics

      Biden choice of economic adviser shows focus on education ahead of 2024 bid

      by

      Joe Biden is tapping C Kirabo Jackson, a labor economist whose research advocates robust public spending on schools, to fill out the president’s three-member Council of Economic Advisers (CEA), according to a White House official.The selection suggests public education will be a key area of focus for Biden’s brain-trust ahead of a 2024 re-election bid expected to turn on the strength of the economy. The position does not require Senate confirmation.Jackson, who will take a leave from Northwestern University, where the professor focused on economics, education and public policy, is best known for research on what draws good teachers to certain schools as well as other data showing that raising school spending increases students’ future wages.The US unemployment rate is at 3.5%, and the economy grew at a 2.4% rate last quarter. Meanwhile, consumer prices are rising at a 3.2% annual clip.While the Biden administration sees those numbers as a positive sign of a move to steadier momentum with slower growth and inflation, voters are largely dissatisfied with Biden’s handling of the economy, creating a challenge for his economic policymakers.Biden has argued that more US government investment in early childhood education programs like preschool for three- and four-year-olds would lift wages and decrease poverty, views that agree with some of Jackson’s own research.But the president’s efforts to dramatically increase such funding have consistently failed to win sufficient support in Congress.Jackson’s pick also comes as the Biden administration is thinking through how to boost lagging educational performance since the Covid-19 pandemic.Lengthy public school closures, staffing shortages and other issues during the pandemic are believed to have contributed to the sharp declines registered in US children’s reading and mathematics test scores since 2020.Cecilia Rouse, the Princeton University economist who used to be Biden’s CEA chair, said Jackson’s work would be critical given the country’s biggest long-term economic challenges, including an ageing workforce, declining fertility rates, a lack of childcare and learning loss.“Coming out of this pandemic, one of the big consequences that we will be addressing for some time is the learning loss,” she said. The choice of Jackson “may signal that the administration is looking for creative ways to address what can be a huge loss in human capital for this country for quite some time”. More

    • 200 Shares189 Views

      in US Politics

      Biden’s China investment ban: who’s targeted and what does it mean for the 2024 US election?

      by

      Joe Biden has moved to restrict US investment in Chinese technology, signing an executive order which focuses on a few, sensitive hi-tech sectors including semiconductors, quantum computing and artificial intelligence (AI).It is the latest in a series of measures taken by the US to restrict China’s access to the most advanced technology and comes as the president has embarked on a multi-state tour of the south-west to tout his plans to revive American manufacturing after decades of decline.The restrictions are expected to take effect next year – and come at a sensitive time in the US-China relationship. The Biden administration has launched diplomatic overtures to Beijing in recent months, seeking to mend ties after a series of incidents, while still attempting to bolster its position against China on military, economic and technological fronts.What are the latest restrictions?As a result of previous Biden administration measures, the US already bans or restricts the export to China of many of the technologies covered in these new measures. The aim of Wednesday’s executive order is to prevent US funds from helping China build its own domestic capabilities, which could undermine the existing export controls.Under the executive order, the US Treasury has been directed to regulate certain US investments in semiconductors and microelectronics, quantum computing and artificial intelligence.China, Hong Kong and Macau are listed as the “countries of concern”, but a senior Biden official has told Reuters other countries could be added in the future.The rules are not retroactive and apply to to future investments, with officials saying the goal is to regulate investments in areas that could give China military and intelligence advantages.Britain and the European Union have signalled their intention to move along similar lines, and the Group of Seven advanced economies agreed in June that restrictions on outbound investments should be part of an overall toolkit.Biden’s plan has been criticised by Republicans, many of whom say it does not go far enough.Republican Senator Marco Rubio has called it “almost laughable”, adding that the plan is “riddled with loopholes … and fails to include industries China’s government deems critical”, he said.How has China reacted?A spokesperson for the Chinese embassy in Washington said the White House had ignored “China’s repeated expression of deep concerns” about the plan.The embassy warned that it would affect more than 70,000 US companies that do business in China, hurting both Chinese and American businesses.The country’s commerce ministry said it reserved the right to take countermeasures and encouraged the US to respect the laws of market economy and the principle of fair competition.What part do these measures play in Biden’s re-election bid?As the executive order was made public, Biden was speaking in New Mexico, touting his government’s success in boosting manufacturing jobs in the renewable energy sector.“Where’s it written that America can’t lead the world again in manufacturing? Because we’re going to do just that,” Biden said at the groundbreaking of a new factory manufacturing wind turbine towers in the city of Belon.“Instead of exporting American jobs, we’re creating American jobs and we’re exporting American products,” he added.However, polling shows that for many, the perception of the president’s economic policies – “Bidenomics” as his communications team likes to call them – are at odds with a range of positive indicators. US inflation has dropped to the lowest levels since 2021 and the administration has repeatedly touted months of consistent jobs growth; despite this though multiple polls show that only a minority of Americans support Biden’s handling of the economy.The cornerstone of Biden’s refreshed bid to voters are two major bills he shepherded through Congress and signed into law a year ago: the Chips and Science Act – which pumps huge funding into semiconductor manufacturing, research and development – and the Inflation Reduction Act (IRA), a law for megaprojects boosting green investment.The chips act aims to further freeze China’s semiconductor industry in place, while pouring billions of dollars in subsidies into the US chip industry.Both laws, along with the growing restrictions on Chinese industry, are positioned to win back portions of the working-class vote who felt left behind by globalisation and turned to Donald Trump at previous elections.What’s next?The ban is a step in a broad and ongoing push to undermine China’s efforts to achieve independence in a number of technological areas, in particular the development of advanced semiconductors.In recent months, the US government has signalled it still wants to close some loopholes Chinese businesses are using to get their hands on the most advanced semiconductors.In response to previous chip bans, Nvidia one of the world’s leading chip companies, has started offering a less advanced chip, the A800, to Chinese buyers. But new curbs being considered by Washington would restrict even those products.In possible anticipation of such a move China’s tech giants – including Baidu, TikTok-owner ByteDance, Tencent and Alibaba – have made orders worth $1bn to acquire about 100,000 A800 processors from the Nvidia to be delivered this year, the Financial Times has reported.The Chinese groups had also bought a further $4bn worth of graphics processing units to be delivered in 2024, according to the report.Reuters and Agence France-Presse contributed to this report More

    • 125 Shares149 Views

      in US Politics

      Why aren’t Americans happier about the economy? | Robert Reich

      by

      It’s a Goldilocks economy – not too hot to spur inflation, not too cool to invite recession.On Friday, the labor department announced that the US economy added 209,000 jobs in June.It was the 30th consecutive month of job gains. The unemployment rate dipped to 3.6%Last Thursday we learned that the US economy grew at an annualized 2% rate in the first quarter of this year. That’s well above economists’ expectations of around 1.4%.But if you haven’t received this news, you’re not alone. Good economic news doesn’t make it through the negative sludge of Fox News or Newsmax. It barely gets through the mainstream media.You want some additional good news? In the four years of Donald Trump’s administration, total investment on manufacturing facilities grew by 5%. During the first two years of Biden’s administration, manufacturing investment more than doubled.This has created about 800,000 manufacturing jobs.These remarkable results are the outcome of Biden policies – the Inflation Reduction Act and its green technology provisions, the infrastructure bill and the Chips Act.What about inflation? Yes, Biden’s stimulative spending did boost prices. But the big news that’s not getting through to most Americans is that inflation has been dropping. It has declined significantly from its mid-2022 highs above 9%.Consumer prices are now rising by about 4.9% annually – still a problem but not nearly the problem it was.Much of the remaining inflation is due to outsized corporate profit margins. The IMF recently found that almost half the increase in Europe’s inflation over the past two years is due to rising corporate profits.I wish Biden would make an issue of those profit margins. They’re enriching those at the top while imposing a big penalty on everyone else.And wages? For a while, real (adjusted for inflation) wages were falling, but now that inflation is subsiding, real wages are picking up again.So why do so many Americans continue to think the economy is awful?According to the Gallup economic confidence index, Americans haven’t felt this bad about the economy since the financial crisis of 2008 and 2009. The University of Michigan’s Consumer Sentiment Index is similarly downbeat.In an NBC News survey conducted a few weeks ago, at least 74% of Americans said the country is on the wrong track.Given all this, it’s not surprising that Joe Biden’s approval numbers have been stuck at around 43%.History shows that incumbent presidents tend not to be re-elected when about 70% of Americans think the country is on the wrong track. (They tend to win when fewer than half of Americans think that.)So, the obvious question is, why are Americans feeling so bad about an economy that’s actually damned good?One reason, I think, is a general sense of dread – centering on Trump, DeSantis and Republican lawmakers in general – that seems to affect everything else. (I don’t know about you, but I sometimes have difficulty getting to sleep, worried about the rise of authoritarian fascism in America.)Add in the effects of the climate crisis, and you get more gloom. (This week, the earth’s average temperature reached the highest on record.) A recent study found that headlines have grown starkly more negative.Then, too, many of us are still suffering from pandemic-related PTSD.But I think the deeper reason Americans don’t feel very good about the economy is that is that the vast number of working non-college grads – some two-thirds of the adult US population – are still bogged down in dead-end jobs lacking any economic security, while struggling with many costs (such as housing, childcare and education) that continue to soar.In other words, the economy is getting better overall – but overall has become a less useful gauge of wellbeing as the rich get richer, the poor grow poorer, and the working middle is under worsening siege.
      Robert Reich, a former US secretary of labor, is professor of public policy at the University of California, Berkeley, and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com More

    • 113 Shares169 Views

      in US Politics

      President centers ‘Bidenomics’ as 2024 re-election campaign gathers pace

      by

      As Joe Biden launches his 2024 re-election campaign, the White House is hoping to revamp the messaging on the president’s economic performance with a series of speeches, memos and the term “Bidenomics”.On Wednesday, Biden delivered what was billed as a major speech focused on the economy as he told an audience in Chicago that the Republican policy of “trickle-down economics” had “failed America”. In its place, Biden vowed to create policies that would prioritize growing the middle class, touted post-pandemic economic recovery and announced “Bidenomics is working” – one of 15 times he used the word over the course of his speech.Earlier in the week, a White House memo from two of Biden’s top advisers was sent to reporters and laid out a range of talking points. It touted the president’s various accomplishments on post-Covid economic recovery and job creation, while reiterating the theme that “Bidenomics is working.”“In the weeks and months ahead, the president, members of his cabinet, and senior administration officials will continue fanning out across the country to take the case for Bidenomics and the President’s Investing in America agenda directly to the American people,” the memo announced.The administration’s campaign appears to take aim at one of the president’s key vulnerabilities for the election, with polling showing voters have a dim assessment of how he has handled the economy. A Pew Research Center survey from this month found that inflation is the top concern among Republicans and Republican-leaning voters, while support for Democratic economic policies lags 12 points behind support for GOP policies. An AP/NORC poll from last month showed that only 33% of Americans supported Biden’s handling of the economy.The perceptions of Biden’s handling of the economy are at odds with a range of positive economic indicators that the White House is eager to highlight. Inflation has gone down to the lowest levels since 2021, while the administration has repeatedly touted months of consistent job growth and low unemployment. The US economy has generally outperformed economic experts’ forecasts, and for now has staved off a recession that seemed inevitable.But these gains have not appeared to resonate with voters, who have repeatedly given Biden poor marks on the economy as workers have struggled with rising prices that often outpaced growth in wages. Republicans have meanwhile been eager to capitalize on issues of inflation, labeling the spike “Bidenflation” and making it a frequent point of attack.Biden’s team attempted to defend the president’s economic achievements in the past, including dedicating a significant portion of his State of the Union address in February to highlight his record on job growth and unemployment. The White House even passed out small “palm cards” to Democratic lawmakers with a list of talking points about the economy. But as the presidential election begins to take shape it appears these efforts are intensifying, attempting to go on the offensive with a positive message about the administration’s economic agenda.Some Democratic politicians have embraced the talking points, earning them favorable positions as surrogates for the president. The California governor, Gavin Newsom, reportedly won praise from administration officials this month after an appearance on the Fox News host Sean Hannity’s show, in which Newsom forcefully challenged assertions that Biden’s economic plans were struggling and touted the president’s job creation.The “Bidenomics” memo sent to reporters earlier this week was the work of two longtime Biden advisers, Anita Dunn and Mike Donilon. Dunn is Biden’s most senior communications adviser and played a key role in turning around his 2020 presidential election bid. Donilon has worked with Biden for decades, and as his chief strategist during the 2020 election was key in shaping the campaign’s messaging.Biden initially joked about the “Bidenomics” term at a rally on 17 June hosted by union members in Philadelphia, where he said it was “time to end the trickle-down economics theory” that was commonly associated with former President Ronald Reagan’s plan of ‘Reaganomics’.“We decided to replace this theory with what the press has now called ‘Bidenomics’,” the president said. “I don’t know what the hell that is. But it’s working.” More

    • 188 Shares159 Views

      in US Politics

      The US debt-ceiling ‘deal’ was a giant exercise in bipartisan class warfare | Clara Mattei

      by

      The headlines around the debt-ceiling legislation focused on the ability of the US to meet its financial obligations on time and in full through 2024. This was no small accomplishment, especially as it arrived within a forever-fractured political environment and only 18 months from a presidential election.But the actual terms of the debt-ceiling legislation reveal a political consensus that is at once troubling and longstanding. While topline US spending will increase this year and next, its increase is reserved almost exclusively for defense and for veterans’ medical care. Other programs, including social welfare and enforcement of the tax code by the IRS, will have their budgets cut. Americans seeking food-stamp benefits will also face increased work requirements – a curiously unrelated throw-in policy that reflects a longstanding wish of Republicans and some Democrats.Here, the bipartisan consensus is clear: federal overspending is fine when it supports military ventures; it is a problem when it supports social welfare. In navigating the debt-ceiling legislation and the price inflation that has persisted over the last year, US policymakers have consistently drawn on the failed economic doctrine of austerity – popularized in the 20th century and still prominent today – to intervene in a dysfunctional economy. In using these economic instruments, which are known to fail, they reveal their political ends.At its core, austerity is a suite of economic policies that aims to reduce aggregate demand among the largest population in any society – the working class. Rising interest rates and reduced social benefits, especially in an inflationary economy, require working classes to do more with less. This means working more hours for less money. And who benefits from that environment? A society’s upper crust – the capital class.The recent debt-ceiling agreement, like the Federal Reserve’s continued increases in interest rates, has been presented under the false pretense that curbing expenditures is a necessary intervention for an economy living beyond its means. This narrative is plainly false. In a capitalist economy like ours, it’s never the size of the debt that matters. What matters is how that debt can be wielded to convince Americans to accept economic decisions as somehow unavoidable – painful concessions that are the result of rational deliberations from economic experts.The same excusing of economic pain is used to justify military spending at the cost of social spending. Many have argued, convincingly, that the military-industrial complex is to blame for this double standard, with defense spending doubling as a means of economic upward redistribution toward those with influence and power. But even for those who would be critical of that narrative, the question remains: where is the federal debate around unlimited defense spending? Where are the economic hawks lamenting the undisciplined excess of military adventure?This lack of economic self-reflection illustrates the power of another false principle guiding the American economy, including its tendency toward austerity: it’s not whether the state spends but rather where the state spends. Under austerity capitalism, it is acceptable to use public resources to enrich the very few who profit from real wealth (in the form of dividends and interests), while widespread structural dispossession explicitly serves to “discipline” working people. In other words: economic policy is used as the most important economic lever to perpetuate class warfare.This principle is readily and concretely evident in the recent debt-ceiling legislation. Of the $15tn in excess US debt, more than half ($8tn) is due to war expenditure.Against any imperative of cutting expenditures, the latest debt agreement conspicuously exonerates military spending from any cuts. Meanwhile, US spending on the war in Ukraine is predicted to go up in the coming years, reaching $895bn in 2025. These are unprecedented numbers, a shocking 40% of global military expenditure.And while state spending boosts the profits of big shareholders in the military-industrial complex, and props up stakeholders in the Mountain Valley pipeline despite protests from climate activists in Appalachia, the same policy defunds the Internal Revenue Service, the agency charged with investigating tax evasion. As even the lightest examination makes clear, the US impulse to spend on its military serves the same interests as its refusal to enforce its tax code.Defenders of the Biden administration’s debt-ceiling bill argue, plausibly, that the legislation could have been worse for working people if the priorities of the most conservative Republicans were met. But the specifics of this worst-case scenario offer little cover for what we got instead: a concretization of austerity policies and a whole new set of levers for one-sided class warfare.
      Clara E Mattei is an assistant professor of economics at the New School for Social Research in New York City and the author of The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism More