Are you better off now than you were four years ago?
Ronald Reagan famously asked this question of voters to great effect when he ran against President Jimmy Carter in 1980. More than 40 years later, it looms for President Biden as he seeks reelection.
He got good news when the government reported surprisingly robust growth in Gross Domestic Product for the fourth quarter of 2023: up 3.3% from the year-ago quarter, higher than estimates of 2% growth.
That was followed by the University of Michigan index for consumer sentiment posting a 13% jump from December to the first half of January. The index is up 29% since November, the biggest two-month rise in more than 30 years.
Yet the index is at only 78.80, and this is 8% below the average for 70 years. It is 20% lower than before the Covid crisis of 2020, “and nearer to levels consistent with an economy just emerging from a downturn,” The Wall Street Journal reports.
Downturn? GDP growth hit an astounding 4.9% in the third quarter, and a projected 2.4% for the fourth quarter. Unemployment is near all-time lows at 3.7%. On Wall Street, in 2023 we saw stocks soar a stunning 43% for the Nasdaq and rise 24% for the S&P 500.
So, why the ennui? Back in the days of Jimmy Carter, it was a national “malaise,” and it applies here. The reason many of us feel things are worse since Biden assumed office is that the pulse points of our daily lives have turned into pain points under his watch.
Inflation is down from a peak of 9.1% in June 2022, but it still is up more than double from when President Trump left office (up from 1.4% in December 2020 to 3.4% in December 2023). Gasoline prices are up 29% under Biden (from $2.65 to $3.05 a gallon). A 30-year mortgage will cost you almost triple the rate when Trump exited (2.65% under Trump, 7.31% now). Median monthly rent is up 20% ($1150 to $1380).
Let’s say you wake up on a Saturday morning and want to go to the grocery store to buy ingredients for a hearty breakfast. My favorite, Brooklyn-style, is the classic “scrambled-bacon-cheese-on-a-toasted-roll,” said as one long word, really.
At the grocery counter, a gallon of milk will cost you 24% more than it did under President Trump ($3.31 a gallon then, now up to $4.09). A loaf of bread now is priced 39% higher ($1.45/loaf now at $2.02). Cheddar cheese costs 8% more under Biden.
Now let’s add the most important component of the whole thing: the eggs. They cost almost 90% more now than when Trump left the White House: up from $1.51 a dozen to almost $3. Bacon is up a bracing 31% to $7.30 per pound.
And if you want, say, steak and eggs, ribeye is up 150%, up to almost $30 a pound from just $11 under Trump. It is enough to get a red-meat fan to think about going vegetarian.
These jarring price increases have failed to come back down, so that even milder inflation is compounding atop a much higher level for all goods. Forcing prices back down would require deflation, and only a major recession, and a sudden dive in demand, would achieve this.
In the media, the informal definition of a recession is two quarters in a row of negative GDP growth, and now forecasts are that we may see this in the coming election year.
The Conference Board put out a statement on January 11 that should rattle the Biden campaign: “We anticipate a tepid start to 2024. … We forecast two quarters of slightly negative GDP growth in Q2 and Q3 2024 that will be broadly felt across the economy.” Thereafter, the group sees GDP growth at a poky less-than-2%, below average.
Only one U.S. president has been re-elected in a recession year, and this was in 1900: William McKinley. Four others lost reelection during a downturn, as Newsweek reports: William Taft in 1912, Herbert Hoover in 1932, Jimmy Carter in 1980, and George H.W. Bush in 1992.
HARD NUMBERS: TRUMP VS. BIDEN
INFLATION RATE: STILL MORE THAN DOUBLE
DEC 2020 1.4%
DEC 2023 3.4%
JUNE 2022 9.1% (PEAK)
Source: U.S. Bureau of Labor Statistics
30-YEAR MORTGAGE: UP ALMOST 3X
JAN 2021 2.65%
JAN 2023 7.31%
Source: Tradingeconomics.com
STILL ‘TOO DAMN HIGH’: UP 20%
Median Monthly Rent
JAN 2021 $1150
DEC 2023 $1380
Source: apartmentlist.com
GASPING AT GASOLINE: UP 29%
JAN 2021: $2.36/GAL
JAN 2024: $3.05/GAL
Source: https://www.finder.com/gas-prices
MILK IN THE LAND OF HONEY: UP 24%
JAN 2021 $3.31 a gallon
JAN 2024 $4.09
Source: usifnlationcalculator.com
A LOTTA DOUGH: UP 39%
2020 $1.45 FOR LOAF OF BREAD
2023 $2.02
Source: https://www.in2013dollars.com/White-bread/price-inflation
CHEDDAR FOR CHEDDAR: UP 8%
2020 $5.54 PER POUND.
2022 $5.99
https://www.statista.com/statistics/236863/retail-price-of-cheddar-cheese-in-the-united-states/
EGGS-ORBITANT! UP 89%
JAN. 2021 $1.51
DEC 2023 $2.85
Source: St. Louis Fed https://fred.stlouisfed.org/series/APU0000708111
POUND OF FLESH: BACON UP 31%
2020 $5.58/LB
2-23 $7.30
Source: usinflationcalculator.com
HERE’S THE BEEF! UP 154%
2021 $11/LB
NOW $28/LB
Source: USDA (https://www.ams.usda.gov/mnreports/lswbfrtl.pdf)
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Dennis Kneale is an award-winning journalist, media strategist, crisis advisor, writer, and host of the podcast “What’s Bugging Me” on @Ricochet.
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