Ezra Klein’s not stupid, but desperate
Biden’s age hurts, but it's the economy that's sinking Democrat hopes
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Today’s hot takes
NY Times’ Ezra Klein sees voter doubts about Biden’s competence at age 81 as the biggest barrier to the President’s re-election.
Even a 41-year-old President would struggle with Americans so glum about the national economy. Klein’s proposal to replace Biden with another candidate would not help the Democrats defeat Donald Trump.
The Index of Consumer Sentiment (ICS) fell by over 8% this month.
In 72 years of University of Michigan ICS surveys, no president has been re-elected with the index as low as it is now — 72.9.
Consumer Sentiment is almost as low now as when Jimmy Carter left office in 1981 defeated after one term.
Obama was in a similar hole in summer 2012, but was re-elected when ICS bounced back above 80. It’s just a quirk of numbers, but Biden’s chances depend on ICS being above his age by election day.
Inflation is Biden’s biggest problem with voters. No immediate relief in sight for Biden with annual inflation “nowcast” to stay at 3.4% when May CPI released.
Ezra Klein’s case against the Biden campaign
Ezra Klein is a top-notch opinion columnist at the New York Times. Last weekend, he sounded the alarm for Joe Biden’s re-election campaign. Klein blamed Biden’s losing position in most polls on voter perceptions that the President is long past his best-before date. Klein rejected economic explanations for the current state of the race.
“Prices are the most common explanation for Biden’s trouble. But,... Biden’s numbers aren’t following the pattern we’ve seen with other recent presidents…Biden’s [economic] recovery is stronger than what either Reagan or Obama saw… In 1984, inflation was higher than it is now, unemployment was higher than it is now … In May of 2012, unemployment was over 8 percent; it’s 3.9 percent now. Yet Biden is polling worse than Reagan and Obama were at this point in their re-election bids…Voters think Biden is too old. This is the one that worries me most.”
Why did Reagan win with a worse economy than Biden’s?
Klein cites the numbers accurately, but misses the context that voters use to judge an incumbent president’s management of the economy. Voters’ feelings about how the national economy is doing are formed by comparing current conditions against the recent past, not the distant past. Biden can’t turn his losing campaign around by saying: “Your parents voted for Ronald Reagan. I’m delivering lower unemployment and inflation rates than Reagan did in 1984, so vote for me in 2024.”
In the table below, see Klein’s point. Inflation and unemployment were worse 40 years ago. Economist Arthur Okun’s misery index – inflation plus unemployment – was much higher in 1984 than today.
Sources: Bureau of Labor Statistics (BLS) for inflation rates and seasonally-adjusted unemployment rates. University of Michigan, Survey Research Center, Surveys of Consumers for Index of Consumer Sentiment (ICS). RealClear Polling for 2024 polls (RCP). Gallup Poll for May 1984 cited in Washington Post.
Notes: April 1984 and April 2024 inflation and unemployment data shown with May ICS and polling data because April data released in May affect consumer sentiment and political preferences in May. Author’s calculations of: Biden’s share of 2-party vote in RCP average of credible 2024 polls including RFK Jr. and others; May 2024 ICS adjusted to be comparable to data collected prior to April 2024 transition to web-based survey.
The important difference is that Americans were far more optimistic about the economy in 1984 than today. The Index of Consumer Sentiment (ICS) was almost 10 points above the long-term average. Reagan was far ahead of Democratic challenger Walter Mondale in the polls and went on to a landslide win.
Why were Americans more optimistic in 1984?
Did Reagan, known as the Great Communicator, use his acting chops to persuade gullible Americans that the economy was better in 1984 than it really was? Part of the gap between America’s optimistic mood in 1984 and rampant pessimism in 2024 might be due to Reagan’s superior sales job.
The more important factor is that Reagan benefited from better timing than Biden. Soon after Reagan took office in 1981, inflation fell below 10% and kept falling. Voters hate inflation and loved Reagan for being president when it fell. Unemployment was about the same at the beginning and end of Reagan’s 1st term. However, 7.7% unemployment felt better by April 1984 because it was much lower than the post-recession high of 10.8% reached in November 1982.
Sources: same as for previous table comparing 1984 and 2024
Luckily for Reagan in 1984, voters have relatively short memories of high unemployment once the economy recovers. Unluckily for Biden in 2024, voters have much longer memories of high inflation.
Americans have not accepted the high prices that they see today. Annual inflation is down to 3.4%, but prices remain much higher than when Biden took office. Many voters blame Biden for inflation over the past few years. The annual rate rose through 2021 and the 1st half of 2022 to peak at 9.1% that June.
To take a hypothetical example, if your favorite bulk tin of coffee beans rose from $20 in January 2021 to $24 two years later, you might have been mad and blamed Biden. When inflation slowed down and the price of your coffee beans rose more slowly to just $25 in 2024, you might still be just as angry because you would still be comparing today’s price to the $20 price of 3-and-a-half years ago.
This cumulative inflation from 2021 on is still resonating with voters. As a result, consumer sentiment is lower today than when Biden succeeded Trump in January 2021 and covid was raging.
Sources and Notes: same as for previous table comparing 1984 and 2024
Will Americans turn more optimistic in 2024 like in 2012?
This autumn, I will post a review of the 2012 election. I will explain why Americans turned more optimistic by election day in 2012 and re-elected Obama even though inflation and unemployment were both worse than today.
Biden’s re-election prospects this November hinge on economic vibes improving. The best possible news for Biden would be a fall in the annual inflation rate – the Consumer Price Index (CPI) inflation rate that generates the headlines every month.
At the moment, there’s not much hope of immediate relief. The Cleveland Fed’s “best guess nowcast” is that annual inflation will remain at 3.4% when the Bureau of Labor Statistics releases May 2024 CPI on June 12.
On the plus side for the President, there is a much better chance of annual inflation dropping to 3.3% than rising to 3.5%. Biden needs good inflation news almost every month from now on.
Should Democrats ditch Biden for a better candidate?
Ezra Klein writes that the Biden campaign is so bad that “if Biden’s numbers deteriorate further, Democrats will need to decide between a Biden-Harris ticket that is very likely to lose and an open convention”.
Each case is different. But, the record has not been good for candidates running to succeed a sitting president from the same party.
The closest parallels would be 1952 and 1968 when unpopular Democratic presidents decided against running again. The Democrats lost anyway with replacement candidates Adlai Stevenson in 1952 and Hubert Humphrey in 1968.
Both Stevenson and Humphrey underperformed my EconomyStupid Model backcast of the vote that the Democrats should have received based solely on how voters were feeling about the economy. Both times the Democrats were also burdened by unpopular wars – Korea in 1952 and Vietnam in 1968.
Biden’s support is weighed down by growing divisions over his support for Ukraine and Israel. American support for South Korea in 1952 and for South Vietnam in 1968 was even more unpopular after tens of thousands of American soldiers had died, which is not the case today.
Neither Stevenson nor Humphrey were good candidates. Both struggled with the challenge of defending unpopular Democratic presidents on one hand while at the same time establishing themselves as fresh candidates with new approaches.
Who’s to say whether Michigan Governor Gretchen Whitmer or California Governor Gavin Newsom would perform as Democratic candidate for president any better than Stevenson in 1952 or Humphrey in 1968. At least Whitmer is 52. Newsom is 56. They could deploy their relative youth against 77-year-old Trump. But, any last-minute Democratic Party replacement for Biden would still be weighed down by the same bad vibes about the economic outlook now plaguing the President’s campaign.
Even candidates running to succeed popular retiring presidents have failed – Nixon in 1960, Gore in 2000, Hillary Clinton in 2016. Only George H.W. Bush succeeded in 1988.
Bush lost in 1992 after one term as president because Americans grew unhappy about economic conditions. Jimmy Carter lost in 1980 in similar circumstances. For what it’s worth, my model shows that both Bush and Carter actually did better than projected given the degree of economic pessimism prevailing on election day. But, they still lost by large margins. It’s doubtful that any Democratic replacement candidate would have won in 1980 or that a Republican replacement could have won in 1992.
Voters are feeling negatively about the economy — just as in 1992 or 1980. If Biden goes down to defeat, we’ll never know if someone else could have done better. But, the record says that Klein’s plan to replace Biden would not help the Democrats defeat Donald Trump.
Postscript: Bret Stephens agrees with Klein
Bret Stephens and Ezra Klein are on opposite sides of many issues. But, in his latest opinion column in the New York Times (June 11), Stephens echoes Klein:
“Biden is sleepwalking to defeat against a felonious adversary …It all leaves the president with one option ... He can still choose not to run, to cede the field to a Democrat who can win — paging Josh Shapiro or Gretchen Whitmer”.
I agree with Stephens that:
Donald Trump would likely win an election held tomorrow.
Governor Shapiro may have the makings of a successful candidate some day.
But, Stephens is too pessimistic about Biden’s chances and overly optimistic that a replacement nominee can win in 2024. In similar circumstances, Stevenson did not win in 1952. Nor did Humphrey in 1968.
It’s still possible that the Fed will start reducing the short-term interest rate before the election. And, if the annual inflation rate falls below 3% before election day, Americans may start feeling better about both the economy and President Biden.