A new AP poll found that only 31% of Americans approve of President Joe Biden’s handling of the economy, a result both shocking and familiar. Shocking because no modern president has received such poor marks during a period of very low unemployment and a growing economy. But it is also familiar because it shows Democrats have a chronic political problem regarding the economy: Many voters don’t trust them on economic issues even though Democratic presidents have demonstrably better records of producing job growth, income improvements and avoiding recessions.
As research has found, of 17 recessions over the last century, 13 began under Republican presidents, including all of the biggest: the Great Depression and the major recessions of 1981, 2007 and 2020. The last Democratic recession occurred more than four decades ago.
Why don’t voters believe it? One problem is that the far-left of the Democratic Party reflexively indulges in anti-business rhetoric, and often in policies, led today by the Sen. Bernie Sanders (I-Vt.) wing of the party. If you spend time bashing the very companies that produce most jobs, growth and wealth, it should come as no surprise that most Americans don’t trust you to help the private sector be more productive. So, while issues like income inequality are important to address, as recent Biden legislation helped do, condemning the private sector as a political strategy often ends up backfiring.
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In fact, a survey of 2022 political battleground districts and states commissioned by my organization, the Progressive Policy Institute, found that two out of three voters say Democrats are “too anti-business," which includes nearly three-quarters of independents who will be crucial to deciding the 2024 election. Even 42% of Democrats agree their party is too anti-business.
During most of his career, Biden has been a pro-business moderate. But since becoming president, he has sometimes strayed into the murky waters of leftist demagoguery. For example, he has at times broadly demonized technology companies that, for all their faults, are large drivers of U.S. growth and often popular with consumers.
The irony is that Biden does have a strong economic narrative to tap. While inflation has been very painful for average Americans, it is mostly a byproduct of emergency funding needed to prevent a catastrophic economic downturn during the pandemic. That funding was bipartisan — and supported by voters and businesses alike. But federal largess has to be clearly delineated as a temporary expedient, not a habit.
Now, the Federal Reserve is correctly raising interest rates to rein in stubborn inflation, a process likely to slow or stop growth later this year. The good news is that funding from the bipartisan Infrastructure Investment and Jobs Act and Inflation Reduction Act should begin to be felt in the real economy later this year and into 2024, in time to help the economy recover quickly and robustly. If inflation further eases, as is now starting to happen, then not only will the real economy benefit, but markets may improve as the risk of recession also abates. Last year’s stock and bond market swoons are one reason Biden’s economic ratings are low. This is a positive narrative about the inherent power of American workers, businesses and our economy, as the Economist recently noted.
But this is not always what we hear from the White House or administration officials. Instead, a somewhat dour vision has often emerged from the administration through figures like national security adviser Jake Sullivan, who recently gave a speech about American retrenchment from trade in favor of domestic “resilience” that, as former United States Secretary of the Treasury Larry Summers has noted, seemed to leave out consumers almost entirely. Sullivan’s speech, and another speech a week later by John Podesta, President Clinton's chief of staff and now a senior adviser to President Biden, so strongly emphasized Biden’s embrace of “modern industrial policy” that it seemed to imply it was the standard for the economy as a whole.
While some Democrats may be loath to admit it, the best models among recent presidents for pro-growth messaging include Bill Clinton, but also another older president facing economic headwinds and questions about his age as he turned toward reelection: Yes, Ronald Reagan. Despite their policy differences, both Clinton and Reagan understood that an optimistic, pro-growth, primarily private-sector vision of the American economy is what most voters want, not an economy primarily based on government action.
Biden has major areas of economic opportunity. Reform of our sclerotic, expensive and bureaucratic energy project permitting system, which behaves as a hidden tax on businesses and consumers alike, is being embraced by congressional Democrats and Republicans as well. It should be a key White House agenda item to achieve this year.
Despite attempted hostage-taking of the U.S. economy by Republicans over the debt limit, Biden can negotiate reasonable long-term reductions in federal spending that he can contrast with the House Republicans’ draconian proposed budget cuts. One key budget-busting item to jettison: Former President Trump’s 2017 tax cuts for the super-rich, which remain politically unpopular.
All of these things are achievable for Biden. And while the bipartisan infrastructure law and other legislative victories are important measures, in part because they spur additional private investment, they are not the true centerpieces of the long-term economy, which will always be mostly private-sector driven.
After all, Trump Republicans seem to have largely abandoned positive economic messages in favor of scorched-earth, grievance-based, doom-and-gloom culture wars. In contrast, a dynamic, inclusive economic vision that embraces the role of the private sector will go a long way toward reassuring voters about Biden’s second term. Because without changing course toward the economic center, Biden risks the return of a potentially far more vengeful and destructive President Trump.
Paul Bledsoe is a strategic adviser at the Progressive Policy Institute and a former staff member at the U.S. Senate Finance Committee.
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