It’s been nearly a year since President Biden said no one “suggested that unchecked inflation is on the way, no serious economist.”
This was not true at the time. By the time Biden made that statement, Larry Summers had been warning for months that the Biden administration’s policies risked fueling high inflation through over-stimulus. Summers — who had been Secretary of the Treasury under Bill Clinton, director of the National Economic Council under Barack Obama, chief economist at the World Bank and president of Harvard University — was probably considered a serious economist.
Now there is no room for denial. The most recent poll of the Economist and YouGov indicates how big the problem of inflation is for Biden and the Democrats. Sixty-six percent of people say that rapidly rising prices are a very important issue. Another 24 percent say inflation is “somewhat important,” making this a rare 90 percent consensus.
A deeper dive into the demographic breakdown of this 90 percent shows why, as the New York Times reported on Wednesday, inflation has “Mr. Biden and his colleagues on the defensive as officials discover there is no good way to talk to voters about inflation.” Seventy-two percent of women say inflation is a “very important” issue, while another 22 percent say it is ” somewhat important.” Seventy percent of college-educated white women, a group that gave 59 percent of their votes to Clinton in 2016 and Biden in 2020, say inflation is “very important.” Sixty-three percent of blacks and 63 percent of Hispanics are in the column “very important.” Fifty-six percent of Democrats say it’s “very important,” as do 67 percent of independents.
The Economist/YouGov survey also asked, “How serious is inflation in the US?” Stated this way, 63 percent say it is a “very serious” problem and 22 percent say it is “somewhat serious.” Fifty-five percent of blacks see inflation as a “very serious” problem, as do 60 percent of Hispanics. Forty-eight percent of Democrats say it’s “very serious” and another 33 percent say it’s “somewhat serious.” Sixty-eight percent of university-educated white women belong to the ‘very serious’ problem group. In short, the coalition that put Biden in the White House is concerned about inflation.
Strangely enough, however, the Biden administration still seems to see this primarily as a messages issue. “The government has been fragmented at times internally about how price increases should be discussed and has revised its inflation-related message several times as the talking points are not resonating and new data is coming in,” the government says. Time reports. “Government economists are more on the sidelines when it comes to setting the tone on things like inflation than in past White Houses,” said another person familiar with the discussions.
This approach does not instill confidence in the public. Fifty-one percent say inflation will be higher in six months’ time — a poor forecast given that inflation is already at its highest level in four decades. Twenty percent say it will be about the same. 70% of women say inflation will be higher or equal. Fifty-six percent of blacks and 66 percent of Hispanics see inflation rising or staying the same. This is also the view of 59 percent of Democrats, 64 percent of independents and 57 percent of those who voted for Biden in 2020.
On Friday, the Bureau of Labor Statistics will release its May Consumer Price Index report. Prices are expected to rise seven-tenths of a percent since April and 8.2 percent from a year ago. Core prices, inflation minus food and energy prices, are expected to be 0.5 percent higher than a month earlier and 5.9 percent from a year ago. If the forecasts are correct, inflation will have eased slightly for the second month in a row. Importantly, however, slightly lower inflation means that prices are still rising, just at a slightly slower pace. That’s unlikely to do much to improve the public’s perception of the Biden administration’s competency.
Is the public too panicky about inflation? Is it asking too much of the president? Let’s give Biden the last word.
“My government understands that if we were to face uncontrolled inflation in the long term, it would be a real challenge to our economy. So while we’re confident this isn’t what we’re seeing today, we’ll remain vigilant for any response if the need arises,” Biden said in July 2021.
Americans just want to see the vigilance he promised us put into effect.