A Recession Is ‘Not Inevitable,’ Biden Says
With recession fears rising and his approval rating continuing to slide, President Joe Biden sought to soothe the national psyche on Thursday.
In a 30-minute interview with the Associated Press — his first such one-on-one in months — Biden said that Americans are “really, really down,” an assessment reinforced by recent polling that found that 56% of U.S. adults say the country is already in a recession.
Biden blamed soaring gas prices and the coronavirus pandemic for the public’s sour assessment of the economy. But he said that a recession is “not inevitable” and argued that the United States is in a better position to fight inflation than any other country.
“We’re in a stronger position than any nation in the world to overcome this inflation,” he said, later adding, “Be confident, because I am confident we’re better positioned than any country in the world to own the second quarter of the 21st century. That’s not hyperbole, that’s a fact.”
Asked about the University of Michigan’s consumer sentiment survey, which has shown growing pessimism about the economy, Biden blamed the rising cost of gas, saying that until prices at the pump started going up, Americans “were much more optimistic.” But, he acknowledged, “if you want a direct barometer of what people are going to talk about at the kitchen table and the dining room table and whether things are going well, it’s the cost of food and what’s the cost of gasoline at the pump.”
Biden blamed Russia’s invasion of Ukraine for the surge in gas prices, and said that he had warned early on that helping Ukraine would come at a cost. “It’s not about my political survival. It’s about what’s best for the country,” he said, adding that he feared that if the United States and NATO turned away from Russia’s aggression, the result might have been “chaos in Europe,” with Russian President Vladimir Putin threatening other countries.
The president also pushed back on Republican criticisms that the $1.9 trillion American Rescue Plan Act passed in 2021 — and his policies in general — have fueled inflation.
“Isn't it kind of interesting? If it’s my fault, why is it the case in every other major industrial country in the world that inflation is higher?” he asked “If it’s a consequence of our spending, we’ve reduced the deficit. We’ve increased employment, increased pay.”
The facts on global inflation: Biden was overstating his case for U.S. inflation being tamer than in other developed countries. “An analysis of inflation across 111 countries from Deutsche Bank puts the U.S. near the middle of the pack,” Axios noted earlier this week.
On the other hand, a report released this week by the Pew Research Center makes clear that rising prices are a global phenomenon. The Pew analysis of 44 advanced economies finds that almost all have seen consumer prices rise since before the pandemic. “In 37 of these 44 nations, the average annual inflation rate in the first quarter of this year was at least twice what it was in the first quarter of 2020, as COVID-19 was beginning its deadly spread,” the report notes.
The United States saw the 13th highest change in the rate of inflation over the first quarter of this year, better than countries including Israel, Greece, Italy and Spain — but worse than Germany, the United Kingdom, Canada, France and others.
“Regardless of the absolute level of inflation in each country,” the report says, “most show variations on the same basic pattern: relatively low levels before the COVID-19 pandemic struck in the first quarter of 2020; flat or falling rates for the rest of that year and into 2021, as many governments sharply curtailed most economic activity; and rising rates starting in mid- to late 2021, as the world struggled to get back to something approaching normal.”
Hope for a domestic spending bill: Biden held out hope he’ll be able to pass other legislation to bring down costs for Americans. “I’m going to be able to get, God willing, the ability to pay for prescription drugs. There’s more than one way to bring down the cost for working folks,” he said. “Gasoline may be up to $5 a gallon, but somebody who has a child with stage two diabetes is paying up to a thousand bucks a month for the insulin. We can reduce it to 35 bucks a month and get it done. We have the votes to do it. We’re gonna get that done.”
Biden also expressed optimism that he’ll get the votes to enact a 15% minimum tax on corporations and raise taxes on the “super wealthy.” And he suggested that he could secure tax credits for winterizing homes and $57 billion in funding to boost the domestic semiconductor industry and mitigate supply chain problems.
The bottom line: Biden has been trying to show Americans that he feels their pain while still trying to talk up his record, and the economic gains made since he took office. Hit exhortation to “be confident” carries echoes of President Jimmy Carter’s famous “malaise” speech, delivered in the midst of an energy crisis and stagflation. But Biden has also weaved in another warning for voters: “What seems to be emerging from the past couple of weeks or maybe months is not just a Biden echo of former president Bill Clinton, who deployed that ‘pain’ line to great effect in 1992, but also a warning to voters that Republicans will make the pain worse,” The Washington Post’s Olivier Knox suggests.
