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Economy – The Decider In The Midterms

The November midterm elections will be a referendum on Bidenomics, not Trump.

With Bidenflation running at 12.6%, Americans are hurting. Energy is up 43%, and food prices are up 15% since President Biden took office in January 2021.

To save his party in the midterm elections in November, the President wants to divert the public's attention from the financial misery. So, he gives a series of toxic speeches calling his opponent names such as semi-fascists, etc.

Has he been successful?

No, not at all.

Can he reposition the midterm from a referendum on ‘Bidenomics’ to a referendum against President Trump?

The chances are slim.

In the latest Investor’s Business Daily/TIPP Poll conducted in early September, we asked Americans to pick top-3 issues facing the country. The economy came as the top issue for most. It does not matter what party you are from; the sentiment is shared across the political spectrum.

The economy is the #1 issue for nearly half (48%) of the Americans who took part in the poll. It is important to 38% of Democrats, 63% of Republicans, and 46% of Independents.

The #2 issue is Gun violence/Gun control at a distant 27%. Democrats (37%) think it is important and it is ‘somewhat important’ to Independents (21%), but it has limited appeal to Republicans (15%).

Immigration and border security (24%) is the #3 issue. While immigration and border security is a critical issue for one-half (49%) of Republicans, only 21% of Independents think it is important.

Many Democratic politicians want to leverage abortion as a wedge issue, but it has only limited appeal. One in five (21%) think it is important, with 26% of Democrats and a similar share of Independents (25%). Only 13% of Republicans rated it as a top issue.

The FBI raid of Trump’s Mar-a-Lago, followed by leaks, dominated the recent news coverage. Only 8% think investigations of the Trump administration are a top priority. It gets only 4%  support from Independents.

Real Wages

As inflation rages like wildfire, wages have not kept pace. Most Americans (51%) say their earnings did not keep pace with inflation.

Real wages are wages adjusted for inflation, or, equivalently, wages in terms of the amount of goods and services that can be bought. This term is used in contrast to nominal wages or unadjusted wages.

Real average weekly earnings are down 3.4% year-over-year. The chart below shows that it has been down since April 2021 for 17 consecutive months, practically the entire duration of Biden’s presidency.

Food Challenges

Biden’s economy hurts Americans across the board. It is shocking to note that over one in five (21%) Americans have to skip meals to deal with higher food costs. And another 31% eat less.

Stagflation

The U.S. economy is in stagflation – high inflation combined with an economic slowdown. The National Bureau of Economic Research (NBER), the entity that dates the beginning and end of recessions, has yet to call the recession. Most Americans (59%) believe we are already in a recession.

The Federal Reserve, determined to slay inflation, increased the Fed funds rate by another 75 basis points on Wednesday. The Fed’s interest rate hikes have triggered mortgage rate increases, leading to a recession in the housing sector.

Biden’s Handling Of Economy

President Biden gets good grades from only one-third of Americans, with 47% giving him failing grades. Over the past 12 months, the measure moved between in the 25% to 37% range. In September, most Republicans (83%) and Independents (53%) gave him failing grades. Over one-half (54%) of Democrats give him good grades.

The President recently passed the Inflation Reduction Act, a spending bill that even a friendly media member called “Orwellian.” It was a sad sight to see the stock market plunging over 1,200 points on the Dow as the President celebrated the bill’s passing. The President came up with a waiver of $10K of student loans which most Americans see as a ploy to woo voters.

The President failed in his energy policy to please the far Left of his party. Many Americans believe Biden’s fiscal policy is a big reason for high inflation.

Americans are suffering, and no amount of diversionary tactics will work. November midterm will be a referendum on Bidenomics and Biden’s handling of the economy, nothing else.


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