Inflation has been running hot as a combination of astronomical spending, historic monetary expansion, supply chain woes, and strengthening global demand applies pressure on prices. The U.S. annual inflation rate surged to a decade-high of 4.2%, while producer prices advanced 6.2% to the highest on record. Whether it is buying groceries or purchasing a used automobile, life in America is getting expensive. What implications could this have on the 2022 mid-term elections? The Oval Office and Democrats are reportedly concerned that inflation will diminish the odds of retaining the House next year. The Democrats may want to pray that higher prices and a weaker U.S. dollar are “transitory.”
A 2022 Challenge for Democrats
Will Republicans pick "Bidenflation" or "Joeflation" as their election campaign catchphrase? Will Democrats focus their efforts on the enormous post-pandemic spending on progressive goodies and former President Donald Trump to ensure they stay in power?
The mid-term elections are still more than a year away, but current circumstances have leftists anxious about their chances in 2022. As a result, Democrats are trying to quash or mitigate any negative factor that would further threaten their seven-seat majority.
Even before inflation dominated international business headlines, the GOP's odds of regaining the House of Representatives were already high. Be it redistricting or post-World War II electoral trends, the right could be a thorn in the president's side after November 2022 as long as they move on from the disarray and home in on issues Americans care about – not pronouns and declaring everything racist.
In this case, the crucial pocketbook issue would be inflation. Households in swing districts are unconcerned about the drama surrounding Rep. Liz Cheney (R-WY) or President Biden joking about running over journalists for asking questions. Instead, they want someone or something to ensure they have money in their wallets to survive higher supermarket prices.
President Biden could emphasize how his coronavirus stimulus and relief packages proffer working-class families more dollars in the form of guaranteed income for Americans with children or free college. But, at the same time, the GOP could counter that by arguing that there is no such thing as a free lunch and that the taxpayers are still footing the bill, either by kicking the can down road or the inflation tax.
In the end, it might come down to the age-old question: "Are you better off now than you were a year ago?" Unfortunately, considering that inflation is likely to continue advancing in the months to come, the Federal Reserve might need to raise interest rates, and the economic recovery may not roar as economists would anticipate, many Americans might be worse off over the next 16 months. And that spells doom for the indictment of the Bidenomics doctrine.
But the Biden administration could employ the key ace in its sleeve: Trump.
When in Doubt, Blame Trump?
Should voters refrain from buying his message, President Biden could break the glass in an emergency and pull the lever of blaming his predecessor. Would this be a successful and correct strategy to employ?
Do Trump and the Republicans bear responsibility for the inflationary crisis brewing in America today? They, too, approved enormous spending bills and ran record deficits, adding to the national debt. It was the former president who appointed Fed Chair Jerome Powell to his post. The previous leadership abandoned fiscal responsibility and put together COVID-related programs, such as the paycheck protection program (PPP), that distorted the economy and required central bank support.
Indeed, blaming past administrations is the national pastime for incumbent governments. How often did former President Barack Obama blame the Bush administration? In the early days of his term, Trump routinely stated that he “inherited a mess” from Obama. However, when households are observing that their dollar's purchasing power is eroding, voters are indifferent to whose fault it is. Americans are smarter than that – and they want it solved without pointing fingers.
This would not bode well for a Democrat brand that is already drowning in unpopular wokeness orthodoxy.
A White House in Denial?
The administration is either in denial or rubbing a genie’s lamp, hoping that inflation will disappear before the mid-term contests. The U.S. central bank has described inflation as “transitory,” and Council of Economic Advisers Chair Cecilia Rouse and Press Secretary Jen Psaki have echoed the Eccles Building's position. Inflation being nothing more than a blip on the radar is wishful thinking at this point. When an institution prints one-quarter of all U.S. dollars ever created in a year and Uncle Sam spends runs record federal deficits, the United States metastasizes into an inflation nation, with the pre-coronavirus expectation of Roaring Twenties of 2.0 quickly mutating into a dreadful sequel of the 1970s.
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Read more from Andrew Moran.
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