The U.S. economy is Biden’s biggest liability — and Trump’s greatest strength

For months, the Biden administration and its allies in the U.S. media have been tasked with an unenviable challenge: Convincing Americans that the economy is in good shape.

Thus far, at least, Americans aren’t buying it. In October, a New York Times poll showed that a full 81 percent of American voters grade the U.S. economy as either “fair” or “poor”, while just 19 per cent said it was “good” or “excellent”. A month later, the Financial Times found that a majority of registered voters think they’re worse off financially under Biden than they were before. Just 14 per cent said they were better off.

In the face of this persistent gloom, the tone among liberal journalists and pundits has shifted from pleading to exasperation. “Why Americans Can’t Accept the Good Economic News,” read a November headline from The Atlantic. “The U.S. economy is humming. So why are Americans so grumpy about it?” wondered NPR. “Americans are *wildly* wrong about the economy,” complained anti-Trump writer Tom Nichols. “If it’s actually just mass delusion — a fever that doesn’t seem to break — we’re in deep and inevitable political trouble next year.”

Apologists for Bidenomics do have a set of positive economic indicators in their pocket. The unemployment rate currently sits below 4 per cent. Inflation has fallen sharply. The U.S. economy grew at a blistering annualized rate of 5.2 per cent in the third quarter of 2023. In the face of these top-line numbers, progressives have arrived at the conclusion that there is no rational explanation for Americans’ economic pessimism; the malaise is simply a result of the fact that “the vibes are bad.”

But a closer look at the data suggests that voters’ gut instincts about the economy might have more merit than political elites give them credit for. In spite of strong job growth and declining inflation, inflation-adjusted wages have shrunk by 3.7 per cent since 2020, according to the Bureau of Labor Statistics’ Employment Cost Index. Today’s real wages now stand at 2015 levels — in other words, Bidenomics has effectively erased all of the wage gains of the Trump era.

What’s more, as Stephen Miran notes in City Journal, “for many Americans, the most salient life milestones are now out of reach”. The Biden administration’s spending binge has sent mortgage and car-loan interest rates through the roof, meaning that working- and middle-class Americans “can’t afford the traditional lifecycle accomplishments of owning a house and a car,” Miran writes. “Consumers may be pleased that gas prices are down, but that’s little comfort if they must put off buying a home, having children, and other decisions commonly associated with pursuing the American dream.”

As a political question, however, the debates over the empirical nature of the economy are largely irrelevant. BLS statistics and job-growth numbers do not win elections; popular perception does. The way that voters feel drives the way they vote. And with less than a year to go until the 2024 presidential election, voters don’t feel particularly positive about the economy — or about much of anything else in the country, for that matter. That represents a potentially existential problem for Biden.

Democratic campaign strategist James Carville’s famous adage — “it’s the economy, stupid” — proved to be an enduring piece of political wisdom: Voters are motivated by a complex bundle of ideas, impulses, and emotions, but few are more powerful than their wallets. 2024 is poised to be a textbook example of a pocketbook election: Across geography, age, race, and gender, U.S. voters have consistently and decisively rated the economy as their top concern. (And notably, Carville himself is less than optimistic about Biden’s re-election chances)

What’s more, Biden’s likely Republican challenger is in a uniquely strong position on this issue. Donald Trump, who appears poised to glide to the GOP presidential nomination — currently polling more than 40 points ahead of his closest Republican challengers — has the unusual advantage of having presided over the strongest American economy in recent history.

Trump remains broadly unpopular with voters. His approval rating still hovers in the low 40s — and his opponents in the GOP primary have pointed to the fact that a significant majority of Americans don’t want a Trump-Biden rematch. But when given the choice, voters consistently say they trust Trump over Biden when it comes to the economy — usually by double-digit margins.

This was true during Trump’s presidency, too. While Americans gave Trump poor marks on a slate of other issues, polls from throughout his administration showed that they viewed him favorably when it came to the economy — even during the COVID recession. The 2020 election was defined by non-economic concerns: The pandemic, Black Lives Matter, political polarization, and a variety of other issues where Democrats enjoyed an edge among voters. The same can’t be said of 2024.

None of this is to say that Trump is a shoo-in. Even leaving aside the contentious questions of election meddling and fraud, America is more or less an evenly divided country, meaning that national elections are often decided by razor-thin margins in a few key states. Recent history cautions against drawing premature conclusions from polls: Over the past few election cycles, both the polls and the conventional political wisdom have proved to be wildly out of step with the actual results on election day. 

But Trump’s pitch to voters isn’t abstract; the contrast between the Trump and Biden economies is a lived, material reality for Americans across the country. It’s no wonder that Democrats are seeking to make 2024 about anything other than the economy. If Americans vote their pocketbooks, there’s good reason to suspect that they won’t be voting for Biden.