The economic hits keep coming as Biden’s promised return to normal eludes America

This current reality, mixed with forecasts of worse to come, is hardly the normality Americans craved, and that President Joe Biden promised last year when he said, shortly after taking office, that “America is coming back.”

Yet for all the gloom, this is also a time of strange duality in an economy that in many ways has bounced back well from pandemic shutdowns. The jobless rate is near 50-year lows. Workers in high demand can dictate terms when they get new jobs. And the nation’s indoor sports arenas are packed with cheering fans at NBA and NHL games that make the sterile “bubbles” of Covid-era playoffs a horrible memory, as cities come back to life.
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These bright spots in a country trying to find its feet again tend to exacerbate the feeling that we are living through a time of extremes — a state of being that in itself is unsettling and stressful.

Millions of Americans are worrying about how to deal with high prices, or are going without. Predictions of a looming recession make everyone concerned about their jobs. And any pay increases that come with a new job are quickly gobbled up by inflation.

The secondary consequences of such duress are bound to be political. And for Biden and the Democrats, who were already facing an excruciating midterm election year, the prospect of repudiation by angry voters is growing. Almost by the day, the political environment worsens despite Biden’s frantic efforts to convince the country he feels its pain and can lead it to better times.

“I know that families all across America are hurting because of inflation,” Biden said earlier this month. “I understand what it feels like,” he added, insisting that the high cost of living was his “top domestic priority.”

Biden gets the blame

Presidents probably get too much credit when the economy is doing well. The flip side is that they get all the blame when things go in the tank. That is Biden’s plight right now. But it’s hard to break through with scripted presidential events and trips out of Washington amid a barrage of bad news.

In just the last week, for example, the President has touted the successes of his American rescue plan and announced steps to ease the cost of housing. He has ordered the use of wartime powers to end the baby formula shortage. The White House is encouraging communities to unlock funds from Biden’s bipartisan infrastructure law.

Yet the President’s approval rating languishes around 40% in most polls, amid questions about whether his administration really understands the challenges facing Americans and whether his government is doing enough to fix them.

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It’s a perilous political position when a President tries to highlight the positives in an economy many Americans think is performing poorly.

The political impact of the current situation is not limited to the fate of Biden’s party in November’s midterm elections, which history suggests would be a tough ride even without challenging economic times. A red wave in the midterms could lift a growing crop of pro-Trump extreme candidates to power in a way that could reshape the country in the longer term. Some of their number — for example, newly minted Pennsylvania GOP gubernatorial nominee Doug Mastriano — have adopted extreme positions on 2020 voter fraud that pose serious challenges to America’s political system itself.

A classic crisis that sends the White House reeling

The baby formula crisis is a classic example of the cascading problems that can consume presidencies. There’s nothing more harrowing for a parent than a hungry baby. And the very idea that babies might go hungry is a damaging metaphor for a country and a system that don’t seem to be working. It’s also a powerful rallying point for Biden’s critics in the conservative media industry who suggest the country is on a precipice of devastation.

Biden didn’t cause the formula problem. It started when one baby food manufacturer closed down a plant after several sickened infants were linked to possibly contaminated formula. But Presidents quickly get saddled with crises no one else has solved. They get the blame when things go wrong, and end up with little credit when the problem is eventually solved. That’s Biden’s position now.

Another emotive issue sapping national morale is the high price of gas. The national average of a gallon of gasoline on Thursday was nearly $4.60, according to the American Automobile Association. Come high summer, that might feel like a bargain. Financial Services giant JPMorgan warned this week that California’s $6-a-gallon hit could spread across the entire country by August.

High gas prices are a particularly painful blow to wallets, especially in rural areas where many people drive miles to work.

Again, Biden has tried to respond. He released millions of barrels of oil form strategic reserves and has shamed oil giants for not bringing prices down more quickly. But prices seem to keep rising. And who hasn’t sought a scapegoat when the cost to fill a tank approaches $100?

In response to growing public anger, the Democratic-controlled House of Representatives on Thursday passed a bill giving the Federal Trade Commission authority to investigate energy companies for alleged price gouging. But four Democrats joined Republicans in voting against it, with Rep. Stephanie Murphy, a Florida Democrat not running for reelection, blasting the move as window dressing.

“At best, this bill is a distraction that won’t actually address the problem,” she said in a statement. “At worst, it could make the problem more severe.”

Why inflation spells political disaster

High inflation is giving Republicans an easy opening in the run-up to the midterms. The White House’s previous insistence that the cost of living was a “transitory” result of the pandemic is going to haunt it for months. There’s also little sign that pinning prices on genuine culprits — like pandemic-related supply chain issues and the war in Ukraine — will cut it with fed-up voters.

“President Biden’s strategy of blaming inflation on a new villain every month is failing. First, he denied inflation existed. Then, he called it temporary; and now, it’s Putin’s fault,” Rep. Jason Smith of Missouri, the top Republican on the House Budget Committee, said in a hearing this week.

The daunting prospect for the White House is that although there are signs that inflation — which was up 8.3% in the 12 months that ended in April — is slowing, there is no guarantee that things will not get worse in the months to come.

The loss of a substantial portion of Ukraine’s harvest later this summer could have a devastating impact on prices and could make some basic foodstuffs scarce. While the problem is likely to be most severe in developing nations — and could even cause famines — Americans are unlikely to be spared the consequences. Apart from grain, Ukraine is also a prime source of fertilizer and sunflower oils, shortages of which will have a direct impact on food prices.

This was the week that inflation finally caught up with the stock market, which is critical to the retirement savings of middle class Americans, as lower-than-expected earnings by retailers hit by consumers cutting back sent Wall Street into a spin. That coincided with new recession fears.

The Conference Board, a nonprofit business membership association, warned this week that 68% of CEOs surveyed think that the Federal Reserve’s strategy of raising interest rates to combat inflation will trigger a slowdown.

Even a mild recession could have negative consequences for many Americans, not to mention devastating reverberations for Democrats in November.

If the picture was not gloomy enough, the North American Electric Reliability Corporation warned Thursday that extreme temperatures and drought could cause the power grid to buckle.

It looks like a long, hot, miserable summer that is unlikely to ease the country’s disgruntled mood.

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