Biden's Economic Woes

This has been a transitory year, from the pandemic to inflation, and now possibly to recession. The Fed just raised interest rates by 0.75% in hopes of stemming inflation. Will it work? Or will it kick start an economic dip? We will see. But negative economic indicators are all around us. 

Can policy makers and politicians meet public opinion where it stands today? This will be a difficult challenge as the context is shifting. Incumbency is under threat as we look into the near future.

Today, we are going to examine the effect of our current context on President Joe Biden. Our weekly five-points below:

1. A tipping point? President Biden has gone from bad to worse. As we have often written here, a sitting president with an approval rating of 40% or better has more than a 50/50 chance of winning the next election. This week, Biden is below that mark. 
2. It’s the economy, stupid?! Unquestionably, the economy is the number one issue for Americans right now. With record-breaking inflation month-after-month and prices continuing to rise, it’s no surprise that the economy reigns supreme. Will it be a king slayer? In the more immediate term, what effect will it have on Biden’s party in the midterms? We will see.
3. Biden’s Waterloo. Over the past year, Biden’s performance on the economy has continued to falter. It has gone down as the president’s overall job performance has diminished. Is there reason to worry? Yes, there is.
4. Rudderless issue landscape. The issue Biden was elected on—COVID—is no longer a top priority for the public. That puts the president in a tough place. Right now, the resounding problem on the public’s mind is the economy. But it is also Biden’s top vulnerability, with nothing on the positive side of the ledger. With COVID no longer a key pillar AND an area of strength for the president, no other issue has taken its place. This is a bad place to be. Weakened government; weakened electoral chances.
5. Structural determinism.. At a 40% approval rating, Biden’s re-election chances today would be slightly better than 50/50. Not a great place, but not terrible. Anything below this point, however, and he could have problems in 2024. But if Biden doesn’t run, the odds for a successor are less favorable. Look at the data below, based on an analysis of Ipsos global elections data. All red in 2024? Again, we will see, but the incumbent’s job approval rating is one indicator to watch closely.

Context matters. And this context does not favor the party-in-power. As many note, the midterms this year should favor Republicans. Looking at data today, it would indicate 2024 does as well. Of course, we are still very far off, and much can – and will – change in our world between now and then. But for today? The probabilities gods do not favor the president or the Democrats.