Inflation has once again gripped the nation. The consumer price index for October indicated that prices rose 6.2% from the year prior. The University of Michigan’s Consumer Sentiment Survey’s preliminary findings for November were the lowest in a decade. According to the survey, consumers believe inflation is here to stay, and that President Joe Biden and the Democrat-led Congress have not effectively responded to it.
Here in Michigan, the effects of inflation are slightly more palpable than in other parts of the country. According to a Detroit Free Press article, prices in the Midwest are up 6.6% compared with the 5.4% increase seen in the Northeast.
This is a serious problem for Democrats. Conservative media outlets were quick to coin the term “Bidenflation.” Republicans in Congress latched onto the rising prices to attack Biden’s ambitious spending plans, affectionately re-naming his “Build Back Better” framework “Build Back Broke.” Given the flood of post-Virginia gubernatorial election commentary suggesting that Democrats should be worried about big losses in the midterms next year, beating the Republican’s challenge is vitally important.
So far, Biden’s response to inflation has been faltering at best. While he did acknowledge that “inflation hurts (Americans’) pocketbooks,” he also misappropriated a letter from 17 Nobel Laureates that stated his social spending would “ease longer-term inflationary pressures” by conveniently leaving out “longer-term” in his speeches.
Assuaging the public’s fears about inflation is notorious for sending former presidents to their political grave. Both Presidents Gerald Ford and Jimmy Carter likely lost re-election because of their attempts to convince the country to curtail spending in order to reduce inflation. In a Politico article, former Republican aide Bill Hoagland was quoted saying, “I feel a little bit sorry for the president. A lot of this is out of control.”
Economist Daniel McFadden, one of the signatories on the Nobel laureate letter, argued that inflation is the result of both constrained supply chains and “pent-up demand” from consumers emerging from the pandemic. Wrangling global supply chains and an entire country of people is an impossible task for any person, even a president, to accomplish.
Nonetheless, Biden needs to take Americans’ concerns about inflation more seriously. Economists and officials at the Federal Reserve are paid to diagnose the causes of inflation and whether it will be transient or not. Biden’s job is to listen to and engage with the concerns raised by his constituents.
When Biden visited General Motor’s Detroit plant, Factory ZERO, recently, he delivered a lengthy speech to celebrate the recent passage of the Infrastructure Investment and Jobs Act and emphasize the benefits it would bestow upon Michiganders. He highlighted the money going towards fixing Michigan’s infamously poor roads, the tax credits for consumers purchasing union-made electric vehicles, the money for eliminating PFAS and made a shout out to all the Michigan Democrats in Congress who helped pass the bill. He did mention inflation, but only to bring up that a few Wall Street rating agencies echoed the Nobel Laureates and expressed they believed the social spending plan would “not add to inflation pressures.”
Roads, cars and unions all seem to hit the speaking points for the older Michigan electorate. And yet, I would bet that inflation probably matters just as much to most Michiganders. Bringing up the statements of a few Wall Street rating agencies or even a body of well-respected economists to dismiss concerns about inflation with the wave of a hand does not lead the public to believe that you understand their concerns.
It is not unreasonable to suggest that Biden has nothing to gain from switching his strategy. Greg Ip of the Wall Street Journal points out that since former President Barack Obama’s time in office, voters’ opinions on the economy have been driven largely by partisan identification rather than actual economic indicators. Further acknowledgement of the Republican outcry might just energize GOP campaigns come the 2022 midterms.
But at the same time, it intuitively feels like ignoring inflation, or at least shakily trying to prop up “Build Back Better” as an easy fix for the problem, is not the best plan.
On an episode of the New York Times’ podcast “The Daily,” economics reporter Ben Casselman emphasized the importance of remembering that even if the economy looks good in the aggregate, the economy is not experienced by individuals that way.
According to Casselman, lower-income workers might have seen dramatic increases in their wages due to the labor shortage, but they also face more demanding and stressful work environments because of that same labor shortage. And even if inflation has not increased the cost of living for most Americans, that certainly does not mean everybody escaped the negative effects of inflation.
Biden needs to come down to the same level as the average American. Instead of allowing the discussion over inflation to center around policymakers’ high-brow economic theories, he should make a concerted effort to publicly acknowledge that many voters are more concerned about inflation and the impact it might have on their lives than the fate of the social spending plan in the Senate. Taking the time to engage with his constituents that are concerned about inflation, or addressing the nation on the subject, would help make good on Biden’s promise to serve as a president for all Americans, not just his supporters. Elections are determined by what voters think and feel. If voters feel that their leaders have neglected them, then the massive benefits of a spending bill like “Build Back Better” appear very little.
Alex Yee is an Opinion Columnist and can be reached at alyee@umich.edu.