Every major U.S. ally is uncomfortably familiar with one of President Biden’s favorite charts. It is a graph of economic recoveries in the wealthy world since the end of the pandemic recession. It shows growth flatlining for the United Kingdom, Germany and Japan over the past two years — while in the United States, growth keeps rocketing up.
That chart helps explain why voters have punished ruling parties in election after post-Covid election around the world. Sluggish growth, coupled with a surge in consumer prices, proved toxic for the Conservative Party in Britain. It helped hobble President Emmanuel Macron’s centrist coalition in France and contributed to Japan’s longtime leaders, the Liberal Democrats, losing their majority this fall.
Germany’s governing coalition has been so weakened by recession and so flustered by disagreements over how to revive growth that it teetered this week on the brink of collapse.
Advisers to Mr. Biden and to Vice President Kamala Harris, his successor candidate in the presidential election, had hoped that America’s outlier economy would rescue them from a similar fate.
It did not.
Ms. Harris lost to former President Donald J. Trump. Democrats will spend at least months parsing data for conclusions on what drove the defeat. Certainly, economic factors were only one contributor.
But as Europe’s stumbling economies woke on Wednesday to the news of Ms. Harris’s defeat, one thing was immediately clear: America’s growth engine may be the envy of the world, but it is not the envy of the American public.
Across the world, Deutsche Bank researchers wrote on Wednesday that “growth has slowed down relative to previous decades. That’s left voters disappointed, having not seen gains in their living standards that they’d previously been used to. Even though growth is stronger in the U.S., voters have not tended to suggest this when polled, and have certainly highlighted inflation and the cost of living as a big issue.”
In CNN’s exit polls, two in three American voters called the nation’s economic condition “fair” or “poor.” Three in four said their family’s economic condition was the same or worse than it was four years ago — an issue Ms. Harris notably dodged in her lone televised debate with Mr. Trump.
Biden administration officials had hoped for a significantly brighter mood. From the beginning of Mr. Biden’s term, his team pushed to run the economy hot. They proposed and passed, on a party-line vote, a $1.9 trillion stimulus bill in March 2021 — including direct payments to lower-earning and middle-class workers. Mr. Biden later approved tax breaks for advanced manufacturing and clean energy, new spending on infrastructure and expanded health benefits for veterans and others.
Along with a sustained stretch of efforts by the Federal Reserve to juice the economy with low interest rates and other measures, Mr. Biden’s fiscal policies helped to stimulate growth. His aides, including a Treasury secretary who is an acclaimed economist and former Fed chair, argued it was better to go “too big” than not big enough. They were scarred by memories of the slow-growth, understimulated recovery from the 2008 recession.
The international comparison chart illustrates the degree to which they succeeded. This was not only a world-leading recovery, it was the strongest growth and job gains of any American rebound from recession since World War II.
But Mr. Biden’s team knew from the start there was a political and economic risk to their strategy: inflation. Consumer price growth was speeding up when Mr. Biden took over for Mr. Trump in the White House, and it surged during his first year in office. In 2022, it reached a four-decade high.
Academic research, including from the Fed, has found that the pandemic stimulus signed by Mr. Biden — and by Mr. Trump before him — helped fuel some of that inflation, though by no means all of it. Voters still appear to have blamed the Biden administration for it. Critically, they have remained angry about price growth even as the inflation rate fell back to normal historical levels this year, and even as the Fed began to cut interest rates after raising them sharply in an effort to restrain prices.
The exit polls showed nearly a quarter of voters said inflation had caused them “severe” hardship this year; Mr. Trump won them three to one. Another half of voters said price growth had been a moderate problem. Mr. Trump won them narrowly. Ms. Harris ran strongest, by far, with voters who said inflation had not been a problem at all over the past year.
Some Democrats blame the news media for stoking price concerns among voters. But the lived experience of rising prices has been a unifying factor in the worldwide drubbings of incumbent governments since the pandemic. Many U.S. allies also saw big price increases, in part because global supply chains seized up during Covid and only slowly returned to working order. Their voters did not like them, either.
Mr. Trump, like other challengers to ruling coalitions, promised to bring down prices. History suggests that is unlikely. True bouts of deflation are rare in advanced economies, and they are usually a sign of something gone very wrong.
Instead, history suggests, voters will eventually grow accustomed to the elevated cost of a deli sandwich or a basket of groceries. That is the scenario White House aides began musing about a year ago. They hoped voters might adjust to the new price level, as economists call it, by the election on Tuesday — and that receding inflation concerns would allow the public to bask in the warmth of strong growth and plentiful jobs.
That hope appears to have been misplaced. Consumer sentiment was ticking back up before the election, but voters remained relatively glum.
In that way, America was not such an outlier, after all.
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