The current economy is in terrific shape—especially compared to what most economists expected. Every day, confidence in a soft landing increases, and even the Fed seems convinced, despite an unprecedented rapid rise in interest rates.
Against this backdrop, it's mystifying that President Biden doesn't get much higher grades on his management of the economy. A strong economy is supposed to bode extremely well for both a President's approval and his prospects for reelection, per former President Bill Clinton's campaign motto: "It's the economy stupid." And yet, current polls suggest Joe Biden is an exception to this rule.
This despite current GDP growth of 2.4 percent, well ahead of expectations. Inflation is at 3 percent, down from 10 percent just last year. Unemployment is at a 54-year low, at 3.7 percent, despite predictions that unemployment would substantially increase. Wage growth has been particularly strong at around 4 percent, and most commodity prices are down some 50 percent, with some down considerably more. While gasoline prices have increased somewhat in the last month, they are lower than they were 18 months ago, and stocks are way up this year; the S+P 500 is up almost 18 percent and the NASDAQ is up 33 percent. Even consumer confidence is at a two-year high, with new business applications at record levels.
So it's no surprise Morgan Stanley, among the most bearish in outlook of the major Wall Street firms, put out a report indicating economists had very much underestimated the positive impacts of Bidenomics, which played a substantial role in setting up the economy for more growth. The Infrastructure and Jobs Act created 15 million new jobs, with the overwhelming majority not requiring more than a high school degree, while the Inflation Reduction Act lowered health care costs and will create millions of new jobs in green energy technologies. Meanwhile, the CHIPS Act is driving a plethora of new technology job opportunities in the semiconductor sector as well as a large number of high-tech employment opportunities.
Yet, despite all of these positive economic developments, President Biden's economic approval rating stands at just 37 percent, according to CNBC's latest polling, with the percentage of Americans saying the economy is excellent or good at a low 20 percent.
What could possibly explain the gap between President Biden's economy and the perception of it?
While inflation has significantly moderated, consumers are still shell shocked by the sharp rise in prices over the last two years, and many everyday items are still at elevated levels. You can't ask for a more kitchen table issue than what goes on your kitchen table—literally. Even if prices are easing, the impact left by two years of astronomical grocery bills is clearly still being felt by many American families.
It also seems that Biden's generally low popularity as a result of concerns about his age are contributing to shaping perceptions of his management of the economy. Many Americans, including many Biden supporters, struggle to see in Biden himself a commander managing the economy due to a wider perception that he is simply too old for the job he has.
But probably the biggest source of the disconnect between Biden's performance and his approval ratings is that Biden has been an ineffective communicator about his economic accomplishments. It's something he will have to fix the minute he hits the campaign trail—and hopefully long before. We live in a world in which you need to shout your accomplishments, and in an attention economy, you can't expect people to make the case for you—even your supporters.
It's certainly possible the economy will continue to outperform expectations between now and election day in 2024, but if the economy dips early next year, as many economists now are predicting it will, Biden may be in for even tougher approval ratings, given the anemic levels those ratings are at today in a great economic environment. If that's the case, the campaign trail is going to be a tough go. On the other hand, economists may be very wrong again, and the economy may well continue to outperform expectations.
The time for Biden to start taking more credit for the excellent economy he's built is yesterday. He has something to be proud of. He should make sure people know it.
Tom Rogers is an editor-at-large for Newsweek, the founder of CNBC and a CNBC contributor. He also established MSNBC, is the former CEO of TiVo, and a member of Keep Our Republic, an organization dedicated to preserving the nation's democracy.
The views expressed in this article are the writer's own.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
