According to several recent reports, 63% of Americans are now “very concerned” about the cost of fuel and food, and an extra 30% are “somewhat concerned.” As the ongoing inflation shows no signs of abating, it may become one of the deciding factors for unaffiliated voters during the upcoming midterm elections.
These fears are rooted in realistic figures. According to a report released in January 2022, the cost of essential goods rose by 5.4% over the past year – the most significant increase in the past 15 years. Although the Biden Administration is taking steps to correct this, voters may still see them as “too little, too late.”
Meanwhile, the issue is gaining momentum in the minds of the everyday citizen, who sees their grocery bill steadily increase. The Survey of Consumer Expectations, published by the Federal Reserve Bank of New York, shows that inflation expectations are now at a historic peak.
House Republicans have identified it as a source of political capital, ensuring its presence in headlines, debates, and social media accounts. For them, the narrative is straightforward: inflation is a direct response to the Biden Administration’s profligacy and excessive spending. This contrasts directly with their opponents’ account, which seeks to highlight rising wages, more job opportunities, and the reopening of the economy.
In truth, the situation is much more nuanced.
Since the COVID-19 pandemic began, supply chains have been affected by increased logistical requirements and unpredictable demand surges. With such a clear “starting point,” it is tempting to assume that reopening the economy would spell a quick return to normality.
For economists, this is not such a clear and cut issue. According to Jason Furman, former advisor of President Obama, “After two years in a row of higher inflation, it takes on some momentum of its own.”
Likewise, many external factors behind inflation – such as supply chain bottlenecks overseas – are expected to continue well into the second quarter of 2022. The IMF has also warned that worldwide inflation will likely continue and be worse than anticipated.
Within the United States, a sizable share of the inflation process stems from increased fuel prices worldwide. Oil production and refining slowed down during the pandemic and after several major climate disasters like Hurricane Ida. However, reopening the economy has also increased the demand for fuel, which is now nearing pre-pandemic levels.
Meanwhile, political tensions in Europe have led to equally volatile energy prices overseas, as Russia has restricted the supply of natural gas to Western nations.
Back in the United States, Biden has enacted some emergency measures to counter inflation. Special attention is being paid to domestic supply chain disruptions by simplifying the process to issue a commercial driver’s license or keeping the Port of Los Angeles open 24/7.
Historically, high inflation has never been kind to incumbent governments. Inflation is easy to exploit politically, as it leaves a visible imprint on every grocery, utility, and gas bill.
By pushing information about the things that are going well but avoiding uncomfortable realities, Biden now risks appearing unaware of the issue. As of late January 2022, only 17% of voters expressed confidence in Biden’s ability to manage the economy.
Ultimately, 2022 is an election year. If this pessimism continues closer to the midterm election, it could jeopardize the Democrats’ House and Senate majorities.
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