Commentary on Political Economy

Wednesday 13 March 2024


Biden must promise a more conservative second term

Janan Ganesh · Mar 13, 2024

In 1962, after making a powerful speech, the then leader of Britain’s Labour party sat down to a deflating review from his wife. “All the wrong people are cheering.” She meant the left. What enthused them was far from certain to enthuse the wider electorate.

As fluent and vigorous as Joe Biden’s State of the Union address was last week, the wrong people were (and still are) cheering. If the happiness of committed Democrats, to whom the speech was tailored, distracts the US president from swing voters, who decide elections, the event will go down as a disastrous success.

To win a second term, Biden has to do what he has done for 50 years, except the crucial last few: upset his party. The moderate and apolitical voters who trusted him in 2020 have to know that he is theirs, not the left’s.

This means, among other things, spending less. Democrats still doubt that Biden’s fiscal looseness has been a political problem, so it is worth going over the case. In the late summer of 2021, for the first time, more Americans disapproved than approved of Biden, and haven’t changed their minds since. What happened? The anarchic withdrawal from Afghanistan was the most proximate event. But few people still think of that, and foreign affairs tend not to determine US elections.

The likelier culprit is inflation. It flared up that spring. It is “falling” now, but that means rising more slowly: the accumulated price increases of recent years haven’t disappeared. Crucially, Biden is more exposed to inflation than other world leaders because he passed some astronomical spending bills in the face of warnings (not just from the right) that he would overcook the economy.

Although Democrats continue to discuss the president’s unpopularity as though it were Fermat’s last theorem, a riddle for the ages, inflation is the simple core of it. Immigration, some foreign misjudgments, the apparent frailty of the man himself: these things have compounded, but didn’t create, the administration’s first and still most serious problem, which is a perceived economic recklessness. In a nation that is 50-50 on so much, voters prefer Trump over Biden on the issue of inflation by 14 percentage points.

Biden can’t undo the spree of 2021. But he can promise that his second term will be one of greater caution, and, if Congressional Republicans are at all cooperative, of active fiscal retrenchment for the long term. He must tell Democrats not to expect another round of his high-spending economic revolution, for which the popular demand and the practical need were never all that clear. It isn’t just inflation at stake this time, but the tenability of federal finances. (Some 57 per cent of Americans, according to Pew Research, cited deficit reduction as a priority in 2023, which is more than cited immigration.)

All of this will anger his party, though, and there is no sign that Biden is willing to even intellectually discomfit them. To believe his State of the Union speech, the ultimate source of the cost-of-living problem is the greed of businesses, and the answer a barrage of fiddly interventions against them at the price-setting stage. You’d have no idea that a macroeconomic experiment was run in recent years, entailing subsidies and fiscal transfers, with results that are at best contested. As noble as it is to stop confectioners putting a “hell of a lot fewer chips” in foil bags while charging the same price as before, it dodges the issue.

Biden has shown more vision and legislative craft than any Democratic president since Lyndon Johnson. But had he sat on his hands and stared out of the window these past three years, I suspect he’d be polling better. At the very least, he wouldn’t be so implicated in higher living costs, or the problems at the southern border that followed his removal of some existing policies. The brief in 2024 is as narrow as it was in 2020: dispose of Trump. The more he has tried to expand on that mission, the more he has threatened it.

Americans have no excuse for being surprised. Biden’s programme was candidly ambitious. But the customer is always right. In choosing Biden, the median voter probably expected two things: a quiet life, and a new Democratic ticket in 2024. If the second isn’t forthcoming — itself an amazing hubris — Biden should make good on the first. Otherwise, LBJ won’t be the historical precedent that historians reach for. A one-termer who rallied much of the world in defence of a small nation from foreign conquest, but missed the dollars-and-cents stuff at home: there is still time to avoid the fate of George HW Bush.

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