“It’s the economy, stupid!”

Inflation tops American’s list of concerns. Nearly 9 in 10 are either extremely or very concerned about rising prices.

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The phrase, “It’s the economy, stupid”, spotlights the connection between voter preferences and economic conditions. James Carville, Bill Clinton’s chief campaign strategist is the individual that coined the term.   

The outcome of nearly every election cycle turns on judgments about economic affairs. Incumbents are punished for recessions and enjoy widespread support during expansions. In 1992, Carville’s expression reminded voters that the prevailing recession was George H.W. Bush’s responsibility. Voters agreed and Bush lost.    

Today, a similar phenomenon is developing. Voters are increasingly skeptical of President Biden’s economic policies. Fifty percent of Americans now believe the economy is getting worse, not better. That’s a 15-point increase from June. The gap between those that think the economy is getting better and those that think it’s getting worse is 36 points – the largest disparity since Biden entered office.           

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Signs of economic troubles

In a recent Fox News poll, 73% of voters rated the economy negatively – the highest percentage since May 2020. Supply chain concerns and inflation worries fuel the negativity.  Seventy-one percent of survey respondents said they recently observed products out of stock and 55% noticed slower delivery times. Almost 40% reported stocking up on food and staples.  

Inflation tops America’s list of concerns. Nearly 9 in 10 are either extremely or very concerned about rising prices. Gas prices are particularly worrisome. Most families fear the impact on their finances but also view rising fuel costs as a major problem for the nation. Other top-ranked issues included health care and political divisions at 76%, unemployment (71%), covid (67%), and the nation’s infrastructure (65%).  

People’s priorities contrast sharply with the pitched legislative battles in Washington DC.  While Democrats and Republicans debate the size and scope of two massive infrastructure bills, the public worries about price surges at the gas pump and grocery stores.  People know well that higher inflation lowers their living standards, and it affects everyone.  Note, infrastructure was far down the list of American priorities.  

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Rising prices and the economy

A new YouGovAmerica poll showed that half of U.S. adults now consider the prices they pay for goods and services to be the best measure of how the nation’s economy is performing.  They rank prices ahead of other measures such as unemployment rates and job reports, personal finances, and the stock market.  More than twice as many Americans named prices – not unemployment/jobs – as the best economic indicator.  

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Biden’s presidential approval tracks closely with American’s view of his economic management  

After his victory in November, Joe Biden enjoyed comparatively high public approval. In March, 55% of Americans approved of the way Biden performed as president. Similarly, in May, 50% approved of the way Biden handled the economy.  

Democrats were delighted. Across Trump’s entire 4-year term, he never reached such levels of presidential approval. However, Biden’s elevated approval did not last long.   

By June, Biden’s rating slipped to under 50% and then dropped steadily thereafter. The slide seems to have stopped at around 40%.  

The same pattern appears for economic approval. First, a notable decline from May to June. Then, a consistent month-to-month drop. By mid-October, Biden registered his worst rating on handling the economy and his lowest overall approval as president. Both measures now stand at 39%.

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Remember, it’s the economy

Before 2020, the 1992 election was the last time an incumbent president failed to win a second four-year term. For much of George H.W. Bush’s term, the economy performed well. But in the spring of 1992, unemployment rose, and fears of a looming recession spread. Bush largely dismissed the rumors, appearing distant and out-of-touch. Everyone seemed aware of the struggling economy except the president.        

In 2020, Donald Trump also seemed ill-equipped to deal with the most pressing national issue. Trump downplayed the pandemic, de-emphasized its impact, and attempted to reframe the electoral debate. Carville then updated his famous slogan to, “It’s the pandemic, stupid.”  And down went another incumbent president.     

Incumbents try, but they cannot hide from the obvious. The data demonstrates that Americans recognize surging prices and a modest economy. All the talk about the Fed’s policy of “tapering” – its length and intensity and so-called transitory inflation - simply confuses matters and encourages public skepticism and distrust.    

Ordinary Americans experience inflation every day. A recent CBS News/YouGov poll shows a clear majority (60%) think Biden is not focusing enough on inflation. No other issues examined reached this level including Covid-19 (20%), infrastructure (31%), and health care (48%). The closest was the economy and jobs at 53%. In short, Americans believe Biden isn’t focused enough on inflation or on the economy.        

Democrats should heed Carville’s slogan. If not, it will be Republicans’ turn to point the finger and declare, “It’s the economy, stupid.”         

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