Why many voters didn’t credit the Biden administration for economic turnaround

Despite a number of policies that economists say lowered inflation, voters said their own pocketbooks didn’t see the effects.

By Shelly BrisbinDecember 2, 2024 12:45 pm, ,

Statistics painted a picture of a steadily improving economy in 2024 – employment was up and inflation was down from its high pandemic levels.

So why do so many consumers still say they’re being hammered by high prices at the grocery store? And how did that mismatch between the numbers and people’s real lives affect a presidential election where many voters said the economy was their number one issue? 

For a recent story in Slate, Nitish Pahwa and Shirin Ali tried to answer these questions. Listen to the interview above or read the transcript below.

This transcript has been edited lightly for clarity:

Texas Standard: We’ve talked to economists here on the Standard, and I know you did, too, who point to a turnaround for many aspects of the economy since the pandemic, and that includes consumer inflation. But people aren’t feeling that, when they go shopping.

Nitish, let’s start with you. Where is the disconnect, do you think? 

Nitish Pahwa: I think there’s a couple things that play into this disconnect.

One is that I think a lot of our traditional economic indicators – whether you want to point to the stock market, the consumer price index or even the unemployment rate – are not actually reflecting these days a lot of what is being felt on the ground, just in terms of the monetary pinch and what people are doing to get by. 

So just by way of example, one of the things that’s gone wrong with the inflation gauge is that unlike back in the ’70s, it no longer includes stuff like mortgage rates or other debt rates, which have been pretty high for a lot of American families over the past couple of years and have been even higher now in this time when the Federal Reserve has jacked up interest rates in an attempt to tamp down core inflation. But it’s still keeping mortgages and other such indicators pretty high. 

Another thing is that there’s a lot of suffering in terms of not being able to buy a house, not being able to get health insurance for your kids, no longer having access to a lot of the welfare programs that have been expanded in the wake of the coronavirus pandemic – stuff like the child tax credit, the boost to unemployment support. So with all that suddenly taken away and prices stay high as the economy, globally, slowly staggers back to a stable place, a lot of people are just feeling the pinch.

Like they may have jobs, but they may be feeling very precarious right now.

» RELATED: Data says the economy is fine – so why doesn’t it feel that way?

Well, Shirin, [your Slate article was titled] “The Most Fatal Mistake of Biden’s Term.” Your coauthor there listed just some of the things that actually the Biden administration did do post-pandemic. But what should have happened that didn’t to help bolster the economy?  

Shirin Ali: I think that from the economists that we spoke to when writing this piece, they really said that the Biden administration on paper really did everything that it could have to combat inflation. We saw that wage growth actually surpassed the rate of inflation, which is really the number one way to fight inflation, which was great for the Biden administration.

And so Claudia Sahm, one of the economists that I spoke to, felt that the Biden administration’s biggest mistake when dealing with inflation was really just being able to talk about it. 

Inflation is a really sticky subject. Obviously, consumers and voters don’t want to be paying like $4 or $5 for a gallon of gas, and they’re not happy when they go to the grocery store. And so having to really address that head on can be really challenging for any politician.

And I think that generally the Biden administration struggled to really talk about the things that they had done to kind of help combat inflation. They tapped into the Strategic Petroleum Reserve. And the economists that I spoke to really believe that that did help at the time to bring gas prices down a little bit. But Democrats didn’t really talk about that. 

I wonder to Nitish, if some of this comes down to people’s psychology, why is it that so many consumers continue to feel like their paychecks aren’t going as far as they once did, and that politicians in office right now are to blame? 

Nitish Pahwa: I think there is a great misperception that the government can slowly turn certain dials certain ways and that will affect inflation. They will bring things back to normal. And I mean, as Shirin mentioned, the Biden administration did a lot. 

That being said, again, we have to keep in mind, one, the inflation rate as you measure it now, the headline number that appears everywhere does not include a lot of the debt that American families are still trying to pay down.

And frankly, there is a lack of communication from the Biden administration about what they had done, what effects were there, that just didn’t get through to the public, because there’s always a lot of finger pointing blame that goes upward, right?

» GET MORE NEWS FROM AROUND THE STATE: Sign up for Texas Standard’s weekly newsletters

Shirin, I wonder. Nitish said a lot of blame goes upwards. But I wonder if it might go the opposite way with a new administration moving in. Any thoughts you have on the change in Washington and whether President-elect Trump may be likely to get some credit for positive changes that were already underway? 

Shirin Ali: I think that that inevitably happens a lot when new administrations take over. Economic policy takes time to take effect. So it’s kind of a wait and see situation. And consumers have spent the last couple of years in shock, facing really high costs.

But the reality is that the economists that I spoke to [said] the bottom line is that Americans will just kind of need to start getting used to the new cost of goods. And the positive side of that is wage growth has gone up. So most Americans should be able to begin affording the new cost of goods in the new normal. 

If you found the reporting above valuable, please consider making a donation to support it here. Your gift helps pay for everything you find on texasstandard.org and KUT.org. Thanks for donating today.