In a poll released by Quinnipiac last week, 60% of Americans indicated they were unhappy with Joe Biden’s handling of the economy. You, dear reader, are not surprised by this news, as you have read about the shortages and inflation in America since nearly the day Joe Biden set foot in the White House.
- Obamacare Is Now Bidenflation
- SHORTAGE: Biden Shortages Hit Kids’ Medicines
- Bidenflation Is Back at the Pump
- MAJOR WARNING ON FOOD SHORTAGES: Businesses Prepare for Violence
- DOWNLOAD: FOOD SHORTAGE: Crazed Hoarding Is not Preparing
- Bidenflation Has Eaten Up Americans’ Pandemic Savings
- WATCH: Biden Finally Admits Fault in Baby Formula Shortage
- Americans Forced to Sacrifice Essentials by Bidenflation
- Add Fertilizer to the Growing List of Shortages Threatening America
- BIDENOMICS: Shortages of Gas at Highest Prices Since 2014
In The Wall Street Journal, Gerard Baker places the blame for Americans’ disapproval of Biden squarely on inflation. He writes:
Perhaps, but I’d suggest there’s an even more obvious way of looking at the same thing. To adapt a famous presidential campaign slogan, it’s the inflation, stupid.
The time frame of the Michigan tracking model is a giveaway. Between 1983 and 2020, and especially after 1991, inflation was tame, so the weight it was given was suitably small. But in the past two years it has surged—back to the top of public consciousness. The outsize impact on Americans’ confidence in the economy is no great mystery.
Rapidly rising prices have had two deleterious effects on economic sentiment. First, they have cut spending power. Between the second quarter of 2020 and the second quarter of 2023, real median weekly wages fell by 7%. A slight rise this year hasn’t come close to making up for the fall since 2020.
But inflation also has potentially even more damaging effects. Americans under 50 have no real recollection of the terrifying, destabilizing quality of sustained sharply rising prices. When you read headlines about a United Auto Workers strike in pursuit of a 36% pay demand over four years, it’s a flashback to that era. An out-of-control pay-and-price spiral is a demoralizing assault on our already fragile sense of economic security.
Despite claims from the Democrats, inflation is nowhere near defeated. It may be down from its peak of a year ago, but the core consumer price index, excluding food and energy, was well above 4% in August.
For Democratic partisans, the message is: The beatings will continue until morale improves. For the rest of us, as long as inflation remains way above its levels of the past 30 years, low public confidence is no puzzle but a wholly rational, necessary response.
Action Line: For investors, the answer to times like these is the same as it always is: save til it hurts and rely on the power of compounding. When you want to talk about inflation and your portfolio, I’m here. Until then, click here to subscribe to my free monthly Survive & Thrive letter.
