By Paul Brandus
You know things are bad for President Biden when liberal columnists criticize him, and when the administration itself complains about media coverage and the polls.
Presidents love polls when the numbers are good, but when they’re not, they’re either “fake,” as Donald Trump complained, or the methodology is faulty, as Biden staffers say now . When presidents — be they Democrat or Republican — start blaming the media and the polls, it’s always a sign that the ship is taking on water.
Some presidents — most recently Ronald Reagan and Bill Clinton — were able to turn things around after a rough first year. Others, like Trump and Herbert Hoover (who presided over the beginning of the Great Depression), never did. Which path will Biden wind up on? I’ll get to this in a minute.
But first, to quote James Carville, it’s the economy, stupid. The president could be bragging about the 6.5 million non-farm payroll jobs added to the economy last year — more than the prior seven years combined. Wages, GDP, corporate profits, housing prices, consumer credit all grew impressively last year.
But that was last year. Now there’s 7% inflation, the omicron virus and gunked-up supply chains. What gasoline shortages were to Jimmy Carter, barren grocery stores are to Joe Biden. Yes, millions of Americans are getting raises, retention bonuses and all the rest. But there’s no milk, eggs or meat.
Those three problems — the pandemic, supply chains and inflation — are intertwined. But voters don’t want explanations or excuses, they just want things fixed. And no matter the reason — refusal by some to get vaccinated, truck drivers quitting in droves, stores unable to find enough workers to stock shelves — the president always gets the blame. Doesn’t matter if it’s fair or not, that’s how it works.
The president has an additional problem. He has now outsourced his political fate to the Federal Reserve. After spending virtually all of 2021 behind the curve on inflation — it only recently dropped the word “transitory” to describe it — the Fed now says it’ll raise interest rates several times this year.
Higher rates are to inflation what chemotherapy can be to a cancer patient. The goal is to eliminate the problem (inflation) while minimizing damage to the patient (the economy). If the Fed over-reacts in 2022 like it under-reacted last year, it could spark a recession. You think the average American will blame the Fed’s Jerome Powell for that?
Meanwhile, markets wait for no one. The Fed hasn’t acted yet, but Treasury yields /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y 0.00% and mortgage rates have risen sharply in recent weeks, and stocks /zigman2/quotes/210599714/realtime SPX +2.47% are taking it on the chin. Some 220 U.S.-listed companies with market caps of $10 billion or more have tumbled at least 20% from recent highs, putting them into bear market territory, notes the Wall Street Journal. Far worse: Prices of some two-fifths of companies in the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +3.33% have been cut in half, it adds.
The timing for all this couldn’t be worse for our 79-year-old president. The midterm election looms. Republicans need just five seats to take the House, and the 50-50 Senate is tilting slightly red. Biden thinks he has problems now? Just wait until — and if — Mitch McConnell and Kevin McCarthy take over, as history suggests they will.
So which path will Biden take? The Reagan-Clinton road to political redemption —or Hoover’s?
Reagan and Clinton turned things around for several reasons. The Reagan rebound was based in part on something he had nothing to do with: Carter’s hand-picked Fed Chairman Paul Volcker, who jacked up the fed funds rate to 20% in 1980. It helped end Carter’s presidency and sparked a nasty recession at the beginning of Reagan’s.
But the chemo worked — it killed a nasty bout of inflation. Then came the ’80s boom. Clinton’s messy first year, 1993, was characterized by White House dysfunction, legislative flops and scandals that by Trumpian standards seem tame. He was also shrewd enough to understand that things weren’t working and that he needed to up his game.
But Reagan and Clinton also possessed an extraordinary gift for oratory and persuasion. In this respect, I don’t think Joe Biden is in their league. He’s a good and decent man. But in this visual age, this social media age, when attention spans are short, the long, often rambling speeches he tends to give just don’t seem to fit in.
I don’t know how Reagan or Clinton would do in 2022, but I sense that Biden — who was elected largely because his last name wasn’t Trump — needs to try something new. Better messaging would help. But even better than that? Solving some problems.