It’s The Government Stupid & Biden’s Biggest Failures - Top 3 Takeaways – January 26th, 2024
- It’s the government stupid. The Ragin’ Cajun James Carville coined the phrase “it’s the economy stupid”, while advising Bill Clinton’s 1992 presidential campaign. In fact, the phrase was so ingrained in the campaign’s culture that Carville hung a sign with that saying inside the campaign’s headquarters. A lot’s changed in 32 years but the importance of the economy in presidential campaigns hasn’t. While President Biden’s current approval rating, sitting at under 40%, is the lowest at this point in any presidency, the economy and specifically ‘Bidenflation which became synonymous with ‘Bidenomics is a big part of the reason why. Biden’s economic approval rating, at just 37%, sits below his historically low overall approval rating. Much to Biden’s frustration the economy has consistently been an anchor around his presidency and now his campaign. And the reason he’s been so frustrated is because of economic growth. Save a short-lived technical recession in the first half of 2022 the economy has been growing and jobs along with it. While not great, US economic growth paced 1.9% in 2022, but picked up to a very solid 2.5% rate in 2023 – as we learned yesterday with the release of the 4th quarter GDP report. And better still, in the context of economic growth, is how we finished the year. Growth paced 3.3% in the 4th quarter, which blew away expectations. So how is it that on the surface the economy could be doing so well, but from the perspective of the average American could be viewed so poorly? Well, that part’s easy to answer because it’s what you’ve lived and to continue to live with every day. Due to ‘Bidenflation, you must be making 18% more today than you were three years ago today just to break even. And that’s just it. That average American isn’t breaking even. Wage growth over that same time has been 14%. So yeah...
- The average American is 4% worse off financially today than the day Joe Biden became President of the United States. Despite all of the economic growth you’ve heard about. For that reason, it’s completely explainable that President Biden has a historically poor approval rating driven in large part by a historically low approval rating on his handling of the economy. After all it’s the economy stupid – but what that really boils down to, especially in a political context, is our personal economy. But there’s still an issue to be answered. If the average American continues to fall further behind in Biden’s America, how is it that the economy can continue to grow and at even faster rates? Yes, debt accumulation has a lot to do with it. But an increase in consumer spending, which in typical economies accounts for well over 70% of economic growth, was and is much lower than overall economic growth. So, what’s been driving the economy? It’s the government stupid. Government spending – from federal, state and local governments, rose by 3.7%. And in the process, government spending is now accounting for the largest share of the U.S. economy since the Great Depression and World War II. Consumer spending isn’t any longer responsible for 70%-75% of the US economy. No, we’ve fallen to under two-thirds of the U.S. economy at 66%. What this means is two things. Given that government spending can only come from one place and that’s taxes, (or additional debt spending paid for by future taxes), what’s effectively happening here isn’t a sustainable level of economic growth brought about by the growing prosperity of Americans. It’s a redistribution of wealth and economic freedom away from citizens and into the hands of government bureaucracies. This is why the economy doesn’t feel as good as the economic data suggests it should. The economy is growing at our, at your, literal expense. And the net effect of it is that since the advent of the Biden Administration, not only are you 4% worse off than you were before...it’s that you now have 4% less freedom than you had before. That’s how much of the US economy has been taken away from Americans and redistributed under the control of government bureaucracies. So yeah, it’s the government stupid. And just imagine what another four years of ‘Bidenomics would do to you. In ‘Biden’s America’ the best question Capitol One could ask is what’s left in your wallet? Especially after that credit card has already been maxed out. But speaking of Biden’s failures...
- Immigration is now the biggest issue and his biggest failure in the eyes of Americans. Texas is now maneuvering to declare an official invasion has occurred to use its constitutional right to defend itself against the Biden’s Administration's open border policies. This is something Governor DeSantis supported by citing constitutional law on a state’s right to protect itself against a foreign invasion. DeSantis has also pledged that Florida would continue to support Texas’ border efforts which will likely mean that the Florida National Guard will play a role in what comes next. Anyway, immigration, which is now tied with the economy as the top issue according to Gallup and has overtaken the economy as the top issue in other polls and also at the polls – as Iowa and New Hampshire voters each named it a top issue...is now President Biden’s worst performing issue. Only 32% of Americans approve of President Biden’s handling of the immigration issue (which gives you a current baseline of how many people are operate in a realm beyond reason) compared to 64% who disapprove. It’s hard to imagine that President Biden could fail so spectacularly on the two biggest issues in the minds of Americans and win an election based on those issues in November. That’s the silver lining to my takeaways today.