I readily agreed that positive news about jobs, G.D.P., and Biden’s efforts to stimulate manufacturing investment—of which there was plenty—wasn’t receiving as much attention as it deserved, particularly compared with the voluminous coverage of inflation. But I also pointed to governments from across the political spectrum in other countries, such as Britain, Germany, and France, that had experienced big rises in consumer prices. Inflation, it seemed, was poison for all incumbents, regardless of their location or political affiliation.
According to the network exit poll, conducted by Edison Research, seventy-five per cent of the voters in last week’s election said that inflation had caused them moderate or severe hardship during the past year, and of this group about two-thirds voted for Donald Trump.
According to the Financial Times, “Every governing party facing election in a developed country this year lost vote share, the first time this has ever happened in almost 120 years.”
Immigration, the culture war, Trump’s reprobate appeal, and other factors all fed into the mix. But anger at high prices clearly played an important role, which raises the question of what, if anything, the Biden Administration could have done to counteract the global anti-incumbency wave. This is a complex issue that can’t be fully addressed in a single column. But one place to start is at the White House itself, where staffers at the Council of Economic Advisers (C.E.A.) and the National Economic Council spent a lot of time analyzing the inflation spike and examining options to deal with it.
Why, despite falling inflation, was public sentiment about the economy and the President still so sour? “We quickly realized that wasn’t just about the inflation rate,” Ernie Tedeschi, a former chief economist at the C.E.A. who left the Administration earlier this year, told me. “People were still going to the store and seeing high egg prices and high milk prices.” Even when an inflationary period peters out, prices don’t magically return to where they were before it began.
Most U.S. economists, including those associated with the Biden White House, remain skeptical about the efficacy of price controls, which they believe can lead to serious distortions and shortages. “I try to be humble, but I don’t know how they would have helped,” Tedeschi said. “People complained about inflation. If we had done price controls, they would have complained about shortages. It would still have been pinned on the President.”
Even if there was no simple policy fix for the political problems facing the Biden Administration, could it have done a better job of addressing voters’ concerns rhetorically? William Galston, a fellow at the Brookings Institution who worked in the Clinton Administration, said last week that Biden should have pivoted much earlier from emphasizing job creation to focussing on the cost of living. “He was trapped in a very traditional ‘jobs, jobs, jobs’ mind-set,” Galston said. “It was a fundamental mistake.”
Though Biden’s record on G.D.P. growth and employment creation is genuinely praiseworthy—since January, 2021, the economy has added sixteen million jobs—there is perhaps something in this criticism. For a time, it did seem that the White House wasn’t sufficiently acknowledging the frustration and anger that the inflation spike had generated. Still, beginning last year, Biden spoke out a lot more about high prices, and he sought to place some of the responsibility on corporate graft. He announced measures to crack down on “junk fees,” and criticized “shrinkflation” and “price gouging”—getting very little credit for it in the media or anywhere else. The Administration also tried to advertise the pathbreaking steps it had taken, through the Inflation Reduction Act of 2022, to lower health-care costs: capping the price of insulin for retirees, empowering Medicare to negotiate the prices it pays for some drugs, and introducing limits on out-of-pocket costs.
After Harris replaced Biden at the top of the Democratic ticket, she vowed that reducing the cost of living would be her first priority. She also outlined a number of proposals designed to help low- and middle-income families, which included expanded child tax credits, a new subsidy for first-time home buyers, and allowing Medicare to help cover the cost of home care.
Ultimately, however, none of these things dislodged the public perception that over-all prices were still too high and that Biden and Harris, if not entirely responsible, were convenient vehicles for voters to take out their frustration on.