Jonathan Chait: “That the economy is in such fantastic shape makes it all the more bizarre that Biden faces this dilemma. It is true that inflation spiked during the first two years of his presidency, and voters apparently have not forgiven him. Innumerable analyses have delved into the apparently fatal effect on the voters’ psyche that inflation has caused.”
“But inflation has fallen back to pre-Covid levels. Interest rates remain elevated, at least for the time being. Meanwhile, nearly everything else about the economy remains fantastic. Wages are growing much faster than price levels (which was not true earlier in Biden’s term). They are growing faster for low-income workers than for affluent ones. The unemployment rate is at historic lows.”
“It may be the case that voters will decide they care more about the Covid inflation surge than anything else that’s happening in the economy. But there’s no universal law of politics that says inflation is the only economic fact that matters to people, and people who are angry about inflation will continue to feel angry even after it stops.”
