Biden is playing Trump’s economic game

Americans are so politically polarised that voters’ stated views on the economy’s health are now shaped overwhelmingly by which party they identify with.

Back in the 1980s Ronald Reagan era, or even in the heady pre-crisis boom of 2006 under George W Bush, Republicans were unsurprisingly more upbeat about economic conditions than Democrats. But the gap in judgments by party identification in measures such as the University of Michigan consumer sentiment index were usually small and never exceeded 30 points. And why would we think otherwise? People lived under the same broad macroeconomic conditions, after all.

The tenure of Donald Trump, though, seemingly killed Americans’ willingness to evaluate economic conditions without first filtering their conclusions through a partisan lens. Just prior to COVID-19 hitting, with US unemployment at near-record lows under Trump, Republicans were a massive 47 points more positive as consumers than pessimistic Democrats. Today, under Joe Biden, it is Democrats who are 50 points more positive than Republicans.

The current chasm no doubt partly reflects the extraordinary time we are living through. A robust jobs bounceback, coupled with higher than expected inflation, gives something for every partisan to latch on to in the macroeconomic statistics. But that this massively divergent sentiment pre-dates the pandemic suggests we aren’t really talking about differences in “lived experience” among voters here. What we are seeing is people thinking about how they should respond to surveys based on partisan allegiance.

Nor is this a one-off, fluke poll. YouGov tracking shows Republicans’ and Democrats’ views on the economy inflected sharply in the months around the 2020 election. Two weeks before Biden’s victory, just 4.6 per cent of Democratic voters believed the US economy was getting better, compared with 48 per cent of Republicans. A month into Biden’s presidency, those numbers had flipped to 27 per cent of Democrats and just 8 per cent of Republicans who thought things were improving.

The consumption of media with vastly different ideological editorial lines is often held up as the source of this discrepancy. But voters face the real-world effects of job conditions, price rises, and supply chain challenges, every day. Of all political issues, in fact, broad sentiment about the economy should be the most robust to being overly influenced by television networks and newspapers. No, it feels as if what we are seeing here is not voters being pulled apart by the media, but the Trump years enmeshing people in the mindset of representing political teams.

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Certainly, Biden’s White House seems to think voters are susceptible to this crude partisanship. Its position on the high inflation the US is experiencing has shifted from dismissing the prospect, to claiming it will be transitory, to now blaming it on Republicans’ unwillingness to expand the US welfare state. Jen Psaki, the White House press secretary, tweeted this week: “Q: Why, when Americans are seeing higher prices, are Republicans united against a bill to lower core costs on prescription drugs, health care, child care and elder care? A: They’re rooting for inflation.”

Leaving aside the terrible economics of conflating “inflation” with the prices of individual services or suggesting a social spending Bill that regulates more of the economy and subsidises demand for certain sectors will weaken inflationary pressures, this line of thinking is instructive. Even with observable rises in petrol, food and rent prices due to an expansionary macroeconomic policy in a supply constrained economy, the White House still thought sticking it to Republicans an effective riposte.