Tuesday, July 27, 2021

Sinking Fast?

Whoever is pulling the strings for Joe Biden must be getting a little nervous.


Credit: Greg Groesch, Washington Times


The American people are becoming increasingly uneasy and that usually portends trouble for the person in charge.

The biggest indicator is an ABC/IPSOS poll that was recently released that showed that only 45% of Americans are optimistic about where the country is headed over the next year. 55% are pessimistic.

In April, 64% were optimistic. That is a 19 point drop in three months.

Furthermore, a Rasmussen poll this week found that only 37% of likely U.S. voters think the U.S. is headed in the right direction.

The underlying numbers in the ABC/IPSOS poll reveal the dimensions of the problems mounting for Biden.

Only 39% approve of the way Biden is handling the crime problem.

Only 37% approve of the way immigration and the situation at the U.S.-Mexico border is being handled.

Only 37% approve of how Biden is addressing gun violence.

Biden does maintain majority support from Democrats on these issues. However, he only has the support of about one-third of Independents on these issues. His support from Republicans---about 10%.

If I were a Biden advisor I would be more concerned about the issues that Biden is receiving positive marks right now. 

Why? 

Storm clouds are already gathering on the horizon that could result in Biden's approval rating sinking fast.

Biden has a 63% approval for his handling of the Covid response. Cases are rising and there is increasing talk of reimposed mandates, booster shots and other measures. What happens to that approval number if cases numbers continue to rise?

55% approve of his handling of the Afghanistan withdrawal. The Taliban is already capturing large swaths of the country. What if Afghanistan is overtaken by turmoil and terrorists?

53% feel positive about the economic recovery. However, inflation risk seems to be everywhere. Biden and his advisors are saying this is temporary. What if it is not?

What I find interesting is that on all of the issues that Biden scores highest he inherited positive momentum from Trump.

Covid cases reached their peak on January 8, 2021 two weeks before Biden took office. Cases dropped 80% over the next two months. They leveled off for two months and then dropped further until bottoming out in mid-June. Cases have now rebounded to levels last seen in April.


Source: https://www.worldometers.info/coronavirus/country/us/


The prevailing narrative is that cases decreased due to vaccine distribution. However, the vaccines and the distribution began during the Trump administration.

Biden took over with the wind at this back.

Biden may soon be facing headwinds on Covid. Are the vaccines as effective as has been advertised? Does public opinion turn on Biden on Covid if there is bad news ahead on the virus?

The situation with Afghanistan is similar. Trump spent most of his four year pressuring the military to develop plans for a measured withdrawal from that country. Biden merely is following the plans that were established during the Trump administration.

The economy was also recovering nicely in the last months of the Trump administration. Most of the GDP lost in the second quarter of 2020 due to the Covid lockdowns was regained in the third quarter, 2020. Building on that were solid 4.3% gains in the fourth quarter, 2020 and the first quarter, 2021 that, in part, was on Trump's watch.


Source: https://www.bea.gov/data/gdp/gross-domestic-product


At the same time, inflation has been increasing every month since Biden took office.


Monthly Chained Inflation Rate in the USA (June 2020-June 2021)
Source: https://www.statista.com/statistics/191121/monthly-chained-inflation-rate-in-the-us/

The Biden administration claims that the inflation pressures are transitory and will only be temporary.

That might be true for lumber prices and used car prices. 

However, any wage inflation is not going to be reversed. Once a new pay scale is established it is rarely undone.

We will see what Biden's approval is on the economy if price inflation continues on the current trend. 

You put all of this together and Joe Biden is not in a place that anyone should envy.

Once the weight of these issues starts to accumulate, it is easy to start sinking fast.

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