Understanding the Disconnect: Why Voters Aren’t Recognizing Economic Improvements Under Biden
The Washington Post recently published an article entitled, “The economy is improving under Biden. But many voters aren’t giving him credit.” This report was created by a team of six writers, suggesting that while the economic landscape may be showing signs of improvement, voters are perceived as incapable of acknowledging these advancements. This perspective reflects a disconnection often present among elites in Washington, who may not fully grasp the realities faced by hardworking, middle-class Americans.
This disconnect highlights the challenges that arise when individuals who primarily engage in elite social circles attempt to comprehend the struggles of the average American worker. The nuances of daily life for working-class families often elude those insulated within the political sphere, leading to misguided conclusions about economic performance and public sentiment.
A closer examination of data beyond the headlines reveals that many Americans continue to endure significant hardships under the current economic system and what has been termed Bidenomics. The reality is that while some economic indicators may appear favorable, the lived experiences of the populace tell a different story.
As of December 2023, the inflation rate was reported at 3.4% according to the consumer price index. Various television pundits and government representatives celebrated this figure, highlighting that in December 2022, the inflation rate stood at 6.4%. They assert that this indicates inflation is under control. However, this argument is fundamentally flawed, as it only resonates within the confines of the Washington, D.C. bubble. In reality, inflation is not decreasing; rather, the pace of increase is merely slowing.
Washington officials often employ similar misleading arguments when discussing budget cuts, mistakenly framing a slowdown in spending growth as actual reductions in costs. This misrepresentation obscures the truth about fiscal policies and their impact on everyday Americans. While the rate of inflation growth has indeed decreased significantly from its maximum of 9.1% in June 2022, it is crucial to recognize that compared to December 2021, inflation has risen by nearly 10%. Additionally, when evaluating prices since January 2021, we see an alarming increase of more than 17.5%.
When we analyze the essential costs that families must cover—such as food, shelter, and energy—the inflation situation is not just troubling; it is devastating for many households. This is particularly critical for low-income Americans, for whom these essential expenses constitute a larger percentage of their income compared to those who are more financially secure. The escalating costs of basic necessities create a disproportionate burden on those already struggling to make ends meet.
According to Fox Business, since the beginning of 2021, food prices have surged by an astounding 33.7%, while housing costs have increased by 18.7%, and energy prices have skyrocketed by 32.8%. To put this into perspective, the average American family now faces an additional annual expenditure of approximately $11,434 just to maintain the same standard of living they enjoyed in January 2021. These inflation figures represent much more than mere statistics; they have a profound and catastrophic impact on working Americans’ daily lives, highlighting a crisis that needs urgent attention.
The Federal Reserve Bank of New York has reported that total household debt has reached an unprecedented $17.29 trillion, with credit card debt also soaring to record highs, surpassing $1.2 trillion. Unfortunately, many working Americans are not accumulating debt to finance luxuries such as new televisions or vacations; instead, they are racking up debt to cover essential expenses like groceries and utility bills, often incurring interest rates as high as 25% in the process. As these debts mount, individuals are finding it increasingly difficult to stay current on their financial obligations.
According to the Philadelphia Federal Reserve, around 10% of credit card holders owe more than $5,000. Between July 1 and September 30, 2023, nearly 30% of Americans living in the 100 largest metropolitan areas reported being at least 30 days behind on at least one debt payment, which includes credit cards, auto loans, personal loans, mortgages, and student loans. Alarmingly, 40% of the 22 million Americans who were required to start repaying student loans in October 2023 have yet to make their first payment, indicating significant financial strain.
Other microeconomic indicators are also signaling trouble for the U.S. economy. In November 2023, approximately 45,000 home purchase agreements fell through, representing nearly 17% of properties that had gone under contract that month—the highest percentage recorded in Redfin’s history of home sales surveys. Even seemingly positive economic data at the macro level reveals underlying issues at the micro level, indicating widespread distress among consumers.
The jobs report for December indicated that employers added 216,000 jobs, surpassing expectations, and the unemployment rate remained steady at 3.7%. However, a substantial portion of this job growth came from the federal government, which added 52,000 jobs—a concerning trend, as many hope for a reduction in government size rather than expansion. Furthermore, much of the job creation has been concentrated in low-paying roles within the healthcare sector.
Notably, the workforce participation rate has dropped to 62.5%, with over 680,000 individuals exiting the labor force entirely. While those within the Washington, D.C. bubble may be insulated from these economic hardships, the reality is that working Americans are enduring significant struggles, leading to growing discontent and frustration directed toward the president’s administration.
According to an ABC/Ipsos poll, only 33% of Americans approve of President Biden’s performance, a decline from his previous low of 37%. His disapproval rating has now reached 58%, highlighting a stark disconnect between the administration and the public. When it comes to economic issues, the situation is even graver, with 43% of Americans indicating they feel worse off since Biden assumed office. The president must reconsider his approach to Bidenomics if he hopes to rejuvenate his prospects for reelection.
Unfortunately for him, there are few accomplishments he can point to that would energize the electorate. Biden’s polling numbers are particularly troubling in relation to border security, where he fares worse than he does on economic matters. Compounding these challenges, the world is currently facing two major conflicts, and the safety of American shipping routes is now jeopardized in the Red Sea.
This may help explain why Biden recently delivered a speech at Valley Forge, focusing not on economic recovery and Bidenomics but rather on former President Trump and his belief that Trump poses a threat to democracy. Regrettably for the president, the timeless words of Clinton advisor James Carville still resonate: “It’s the economy, stupid.”
Jim Nelles is a supply chain consultant based in Chicago, IL. He has held positions as Chief Procurement Officer, Chief Supply Chain Officer, and Chief Operations Officer for several companies. Jim proudly served his country as a Naval Officer after attending college on an NROTC scholarship. He holds a BA from Northwestern University in Economics and French, as well as a Master’s in Management from the JL Kellogg Graduate School of Business.
