Biden administration faces dire strait of addressing economic woes
Published: Nov 07, 2021 03:23 PM
US economy Illustration: Chen Xia/Global Times

Illustration: Chen Xia/Global Times

American voters vented their disappointment with President Joe Biden and the Democratic Party which he leads, as Democrat candidates in a host of states in the US were pummeled in last Tuesday's elections. The ballot results in Virginia and New Jersey, two traditionally blue states that favor Democrats, have become the most recent marker of political peril for Biden and his fellow Democrats.

Donald Trump's Republican followers won big in the elections. Major newspapers in the US are calling on the Biden administration to "immediately wake up", roll up their sleeves to fix problems facing the country, or they could face the similar drubbing in the midterm elections in 2022 and the next presidential ballot in 2024. 

Though only being in the White House for less than 12 months, Biden's poll numbers have been on a continuous slide. The reasons behind American moderates deserting Biden is perplexing to Democratic officials, but a mantra by former Democratic President Bill Clinton helps nail the coffin - "It's the economy, stupid."

The Biden administration is good at rhetoric, but weak on action, and the US economy is stuck in doldrums. During the presidential campaign in 2020, Biden thumped his chest boasting over his ability to restrict and stifle the spreading of the coronavirus in the US, and, American voters listened to, and, believed him. 

But 11 months have passed, the onslaught remains unabated, with daily virus infections at tens of thousands, and virus-related deaths remaining elevated at more than 1,200 per day, and many jittery parents remaining at home to accompany their children. The lingering epidemic, if not controlled quickly by the administration, will cast a long shadow on all aspects of Americans' daily life, such as rising instances of mental health issues and homicides.

And, the US economy remains on tenterhooks as the July-September growth rate stumbled to only 2 percent, while high inflation is being kicked in -- a side-effect of the US government's extraordinary loose monetary and fiscal policies. The Federal Reserve has been reluctant to "taper" its extravagant bonds-buying programs and so far refuses to raise interest rates. 

With more than $1.2 trillion dollars printed and an extra $3.4 trillion in fiscal spending by the US government in just 20 months since April 2020, the monetary market is flooded with massive liquidity. It has resulted in unchecked surges in consumer prices, with the elevated gasoline price at the pump and rising home mortgages and rents particularly painful for the middle class and young families. Grocery price hikes have become a particularly acute pain point for the country's working poor.

For months, the US Federal Reserve has tried to allay Americans' concern narrating the inflation will be "transitory" or temporary, but the numbers from the Labor Department have, time and again, proven the central bank wrong. It is highly possible that the inflation keeps elevated into 2022, eating into the buying power of ordinary voters.

Polling in the US has found the economy and the coronavirus as the top two issues that Americans care most. With the Biden administration performing mediocrely on both, it is not difficult to explain Democrats' thrashing at the polls last week. 

Moderate Democrats in the US Congress begin to suspect the administration's capability to tackle the mess facing the country. "Nobody elected him to be F.D.R. (Franklin D. Roosevelt). They elected him to be normal and stop the chaos," said a congresswoman named Abigail Spanberger who is from the Democratic Party. 

Many American voters, increasingly, have discovered the Biden administration isn't keen on addressing their close-to-home frustrations, such as Covid19, inflation, jobs, income gap, illegal border crossings, and rising racism and street violence. Instead, the administration has displayed great interest and fanfare in launching ideological clashes with China and Russia. Biden's obsession with ideology difference is leading him to hold a so-called "Democracy Summit" in Washington in December. 

At almost all international meetings, Biden and his lieutenants have developed a penchant or syndrome to criticize and vilify China. Biden himself has spoken on several occasions that his government will engage in "fierce competition" with China, which has led to rising tensions between the world's two largest economies. That insistence on competition or rivalry has made the administration blind to the fact - that the two economies are closely intertwined and by pushing back Chinese goods, inflation in the US rises. 

Nearly all American corporations have been calling the Biden administration to call a truce on his predecessor Donald Trump's trade war with China, because exorbitant tariffs on Chinese imports and China's tit-for-tat duties on American goods are disrupting the global supply chains, which made American businesses and consumers more difficult. However, bent on keeping up an ideological fight with China, the US government is stuck in Trump's shadow and won't do away with the tariffs and other punishing measures imposed on many Chinese technology companies. 

Now, the US faces the dire prospect of inflation and sharply slowing growth, which, if not addressed promptly, will deteriorate to so-called stagflation - a nightmarish economic disaster that governments would usually do all they can to avoid. 

With large numbers of American voters getting anxious or even mad about the actions of the Biden administration, a consensus is growing in the US that Democrats will again be punished in 2022. If the government still refuses to do its deeds to address the soaring prices and scarcity of goods, the voters, disgruntled about the direction of their country, will no doubt once again vent their anger. And the countdown has begun. 

The author is an editor with the Global Times.