Traders on the floor of the New York Stock Exchange work frantically as panic selling swept Wall Street on Oct. 19, 1987.PETER MORGAN/The Associated Press
Gus Carlson is a New York-based columnist for The Globe and Mail.
American voters are less than two weeks away from channelling their inner Howard Beale and telling Washington they are mad as hell and they’re not going to take it any more.
With the U.S. midterm elections set for Nov. 8, inflation raging at 40-year highs and recession looming, voters of all political stripes are acting like the infamously fed-up character in the 1976 film Network and voicing their rage about inflation, jobs and the economy – and they are likely to shift the balance of power in Congress to the right.
But don’t expect that to change anything overnight. The economy is an unwieldy beast and it doesn’t bend easily to the government of the day, even if politicians get blamed for it all the same.
A sweeping New York Times/Siena College study released in mid-October, showed that among about 800 likely voters – Republican, Democrat and independent – 44 per cent said economic concerns were the most important issues facing Americans, up sharply from 36 per cent in July, and far higher than any other issue.
Even for staunch Democrats, traditional partisan hot-button issues such as abortion, climate change and gun control are well down their lists of priorities as they struggle with high prices, recession fears and a tightening job market.
The sentiment is consistent across cultural lines. A WPA Intelligence poll of more than 1,200 Hispanic voters showed the cost of living and inflation, jobs and the economy were top of mind. Health care, crime, climate change and immigration followed. Abortion ranked seventh.
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The grim reality that inflation is bad politics has dogged U.S. leaders in the past. Jimmy Carter learned it. George H.W. Bush learned it. And it appears Mr. Biden is about to learn it, too.
History shows midterms have not been kind to incumbent administrations. It’s hard to understand how Mr. Biden and his inner circle have been so tone deaf, choosing to ignore the rumbles of the gathering storm and the most basic advice made famous by then Bill Clinton adviser James Carville: It’s the economy, stupid.
Mr. Biden’s progressive political agenda has shaped and, at times, choked business for the past two years. Higher taxes, tighter regulations on business and the move away from U.S. energy independence in the name of a green agenda – including cancelling the Keystone XL pipeline deal with Canada – have driven up prices, accelerated the run toward recession and prompted businesses to plan layoffs. Many believe his recently announced plan to fight inflation is too little, too late.
Many pollsters anticipate Republicans will win back the House of Representatives, and the battle for the Senate will be closer than expected.
None of this is a surprise. Inflation has strangled the U.S. economy for some time. The U.S. inflation rate was 8.2 per cent in September. It has hovered above 8 per cent since March, peaking at 9.1 per cent in June.
Mortgage rates have soared, some now touching 7 per cent, cooling a housing market that was red hot as COVID-19 spread. To keep their heads above water, Americans have been dipping into – and depleting – their savings.
As a consequence, Mr. Biden’s approval rating has languished, sometimes dipping into territory once owned by former president Donald Trump. Some 45 per cent of respondents to the Times/Siena poll strongly disapproved of Mr. Biden’s job performance. More damning, almost two-thirds said the country is headed in the wrong direction.
For their part, Republicans are relying on their traditional pro-business drumbeats of lower taxes, less regulation and a return to energy independence to sway voters.
Sadly, for American consumers and business people – even faithful Democrats who vote Republican in hopes of driving a turnaround – it’s not as simple as electing a new slate.
Turning around the U.S. economy is like turning around a supertanker or starting a giant wind turbine by hand. It will take time to get all the component parts, including global influences, in place and working together to return to economy to health. That means the pain will continue well past the midterms, no matter who wins.