Washington, D.C (Washington Insider Magazine)— Historically, no American president has lost an election during a period of economic strength since World War II. Based on this statistic, Joe Biden would have everything to win in November: the stock market at historical highs, the Gross Domestic Product (GDP) far from recession, inflation falling and unemployment at a minimum..
Contrasting Polls and Public Sentiment
Despite these positive economic indicators, recent polls indicate former Republican President Donald Trump as the frontrunner. The discrepancy between economic data and public perception is evident, as many citizens express concerns over the economy and high prices. Economist Harry M. Kaiser of Cornell University notes that Republicans, with support from conservative media, have successfully conveyed a narrative that the economy is struggling, crime rates are rising, and the nation is in poor condition.
Economic Credit and Public Perception
“The administration’s lack of credit for economic measures is surprising, given that a strong economy typically benefits the incumbent administration in general elections,” Kaiser remarks.
Economic Strength Assessment
Is the US economy as strong as President Biden claims? According to Kaiser, the economy is indeed in “good shape”,” with a low unemployment rate of 3.9%, falling inflation of 3.4% in April and real incomes rising much faster than inflation. In addition, the Dow Jones Industrial Average recently passed the 40,000-point mark for the first time.
EFE suggests that these indicators on paper point to a healthy economy. However, there is a difference between these macroeconomic figures and public perception. In a New York Times article, Nobel Prize-winning economist Paul Krugman describes this as a gap between “perceptions of the economy” and “what people see in their own lives.” Krugman explains that while surveys show a negative picture of the economy, many Americans view their financial situation positively.
The Political Challenge for Democrats
This disconnect presents a political challenge for Democrats, who must counter the narrative that the economy is faltering.
Daily Economic Effects
Although macroeconomic indicators support Biden’s vision, everyday expenses remain high, affecting public sentiment. . Laurence J. Kotlikoff, an Economics professor at Boston University, notes that certain expenses, such as dining out and groceries, have risen dramatically, affecting people’s daily life. “People get upset when they pay $30 for a sandwich, equivalent to an hour of work,” Kotlikoff says.
Historical Context and Future Outlook
Traditionally, no president seeking re-election has lost if the economy was strong, nor has any won if there was a recession in the previous two years. Brandice Canes-Wrone, a Political Science professor at Stanford University, emphasises the economy’s critical role in elections. The upcoming months will be crucial for Democrats as they strive to convince the public that economic improvements are underway and that inflation is stable.