This Is Biden’s Soft Landing, and He Deserves Some Credit
This Is Biden’s Soft Landing, and He Deserves Some Credit
This Is Biden’s Soft Landing, and He Deserves Some Credit
The last time this happened, voters didn’t credit Bill Clinton. That may be a bad omen, or a good one.
If the stock market chose presidents, Joe Biden would be a shoo-in for reelection in 2024. The market rallied this month amid growing optimism about the economy, with the S&P 500 zooming 1.9 percent Tuesday on news that the consumer price index rose only 3.2 percent in October (compared to 3.7 percent in September). Stocks rallied again Wednesday on news that the producer price index fell 0.5 percent. Commentators are no longer debating whether the economy will experience a “soft landing” (i.e., a reduction in inflation without recession). The only question now is when it will arrive. The S&P 500 seems to have decided it’s already here.
But the stock market doesn’t choose presidents. Voters do, and polls continue to show they think the economy is in terrible shape. A Financial Times–Michigan Ross Nationwide Survey conducted November 2–7 is absolutely brutal on this point.
The markets say one thing, but grocery receipts say another. Consumers are still hurting, and most choose not to look beyond today and their own pocketbooks.
But grocery receipts are not an indicator of inflation, only of corporate greed and record profits. The Democrats need to a better job pointing the blame where it really lies.
I think one caveat here (and I’m not disagreeing with you, just adding a bit of clarification) is that the grocery stores aren’t the ones engaging in this. Generally, they have pretty tight profit margins. The massive growth of Aldi and other discount grocers in the USA over the past 10-20 years has made the profit margins remain tight. It’s the upstream producers where you see more of the greed.
Most people reading this probably haven’t even heard of a company like Cargill, even though they control a massive chunk of your meat.
Edit: maybe I should have said they produce most of your meat (or the plurality, not sure the exact numbers. They’re the biggest in North American beef, maybe other meats too)
what do you think "inflation" means to consumers? it's the increase over time of the cost of the things they buy. Nobody cares if it's coming from corporate greed or climate change or whatever else. They only care that they've already been living pay check to pay check and now they're cutting back on food into ever more shitty options.
or housing. or any of a dozen other necessary-to-live things.
The Democrats need to do a better job at giving people the money they need to get what they need, and controlling the out-of-control plutocrats wringing every last bit of spare change from the rest of us.
"Ok GOP, we'll cut our yearly deficit by 60% just by only giving the welfare queen confederate states $1 back for every dollar they contribute in taxes, instead of the $6 that South Carolina gets. Pull yourselves up by your bootstraps and start turning a profit."
"Hey, Joe Manchin: if you don't offer your full-throated support to Build Back Better, we're cutting off all Federal aid and investment in West Virginia, and we're going to run nonstop ads telling your constituents why. Also, we're going to break up your daughter's pharma company."
Time for some LBJ shit. But they'll never do it, because they're actually conservatives too.
A lot of people want prices to return to what they were before the pandemic. But that would be deflation. While the prices would get lower, if you actually managed to push the economy into deflation it would be an economic catastrophe. And the lower prices at the grocery store would be little comfort with massive job losses and the economy in free fall.
What people should want is for inflation to return to its steady slow rate. Which it has. The month to month inflation was 0.2% compared to a month prior on September 2023. Going forward that would imply a rate of 2.4% over the course of the next year, very close to the 2% inflation target. For October the month to month rate was flat or slightly negative. The inflation number reported in the news always is very misleading, that tells you the total amount of inflation that occured over the past 12 months (3.2%). But it was actually 0 from September 2023 to October 2023. When people hear those headlines they think it means prices raised 3.2% again over the last month, which is not the case.
The remarkable thing is that inflation was slowed to this extent without the economy going into freefall with soaring unemployment or other problems that can happen with raised interest rates. They seem to have struck the perfect balance to wrangle inflation but prevent a recession at the same time.
Wage growth has also increased and is now growing faster than inflation. That's what you want! For the wages to catch up and make the higher prices a moot point. A deflationary spiral that lowered prices would be devestaring for the economy and most people would actually end up way worse off.
Outside of a socialist centrally managed economy with price controls and production control etc which has its own issues, I don't know how they could have done a better job than this coming out of the inflation problems created by covid and doing it all without going into recession. But the popular perception is just, why isn't everything cheaper again, I want everything cheaper again, must be Biden's fault, I guess. Even though things getting cheaper again isnt realistic, and would likely be devestating for lots of other reasons that would hurt people if it actually was happening.
I hear about how deflation is supposedly the death knell for an economy, but have never heard an actual explanation for why. Inflation just seems preferred since it gives an invisible paycut to workers and allows holders of assets and debt (e.g. overwhelmingly the rich) to benefit at the expense of the value of money.
Boy are you underselling those problems.
The economy is not even close to being the main priority for me when I vote. I'm pissed about things like Roe and Jan 6.
And I'm pissed that the US does not offer universal healthcare, universal college-level education, universal PTO, universal family leave, etc.
You know, basic things in every other developed country in this world.
Zero chance I'm ever voting for a Republican. Democrats down the ballot for me.
I'm voting D too for the time being, but the Dems are never going to give us those things either.
The best Dems will offer is BS like means-tested limited family leave if you work for 3 years in an underprivileged school district first and then apply for a special program that will offset 25.7% of your lost wages via tax credits that can only be applied to the first $34,000 of income including HSA contributions but crediting back via deduction the first $500 spent on diapers as long as the diapers were 70% manufactured in the US blah blah blah
This Democratic party does not want universal healthcare. At best, they will grudgingly support universal "access" to healthcare. They do not want universal free college, nor free PTO, because that runs counter to the interests of their largest donors.
The best we can say about the current Democratic party is that they will, at times, pause the active arson that the GOP is inflicting on this country... maybe, sort of. They could have added DC and PR as states in the 2021-2022 session and given themselves a fighting chance in the Senate, but I guess they just kinda forgot to get around to it.
They exist to be a placeholder for whenever the GOP loses power, and a continuous fundraising lifestyle brand the rest of the time.
I think you're right in the issue, prices are higher now vs recent history and that feels bad, but there is an aspect to that which is more perception than reality.
Wages have been rising faster than inflation for a year and a half straight now, and real wages are currently higher than they were in Q4 2019.
So yes things cost more, but as a percentage of typical wage, they actually cost less vs 2019. Just doesn't feel that way.
https://fred.stlouisfed.org/series/LES1252881600Q
The Fed's job is to defend and grow the owner class's wealth at everyone else's expense, full stop.