Americans want anyone but Biden or Trump

With recession looming, the Republicans should be confident of returning to power but the nation is craving a new face.

US President Joe Biden. Picture: AFP

If you’re of an eschatological mindset, that heavy pounding you can hear is starting to sound a lot like the approach of an unwelcome quartet of horsemen.

In the last two years, three modern-day apocalyptic equestrians – Global Pandemic, War in Europe and Runaway Inflation – have already reported for duty. Now the signs are that their colleague, Recession, is tacking up, fastening his helmet and preparing to join the mayhem.

Having led the world for more than a year out of the brief recession caused by the Covid shutdown, the American economy may be going into reverse. Financial market indicators are signalling the rising probability of a recession. The Dow Jones Industrial Average is down almost 10 per cent from its peak at the start of the year. The Nasdaq, the showcase for the technology stocks that performed so well during the pandemic, is off almost 20 per cent.

More significantly, bond prices are flirting with numbers that have typically presaged recession in the past.

Former US President Donald Trump at the Conservative Political Action Conference in Florida in February. Picture: AFP

Investors pay particular attention to the difference – the spread – between the yield on long-term government bonds and short-term interest rates. As the gap narrows, it indicates rising expectations among investors of a slowdown in near-term economic activity. Earlier this month the spread between the yield on ten-year Treasury bonds and that on two-year Treasurys dipped into negative territory. On the last three occasions that happened, a recession followed within a year.

Companies that until a few months ago were under fire for their apparently untrammelled growth and unstoppable dominance over vast swathes of the US economy are under pressure. The market value of Meta Platforms, the parent company of Facebook, is down more than 40 per cent this year; the company reported its slowest revenue growth in a decade this week, despite adding users. Netflix is down 65 per cent and expecting to lose millions of users in the coming months. Even the mighty Alphabet, parent of Google, which also reported slowing revenue growth this week, is off 20 per cent.

On Thursday, official data showed that the US economy contracted at an annual rate of 1.4 per cent in the first three months of the year. The decline was the result of a number of special factors that may reverse in the current quarter, but news of the first contraction in gross domestic product since the start of the pandemic did nothing to calm nerves.

The spectre haunting the US is that recession is the price that may need to be paid to get accelerating prices under control. Having let inflation rip last year the Federal Reserve, the US central bank, is playing catch-up. Last month it raised interest rates for the first time since before the pandemic and has already acknowledged it needs to move much further, much faster. Last week, Jerome Powell, the Fed chairman, told a congressional hearing to expect the central bank to raise rates more aggressively, starting next month.

There has never been a time with inflation this high – consumer prices are rising at an annual rate of 8.5 per cent – when the Fed has been able to crush inflation without also crushing growth.

Apocalypses of course can end badly for a lot of people. Given the fractious state of America already, it’s almost too much to wonder what further damage a deep recession might do. But for the Democrats at least, fresh off their victory over Donald Trump 18 months ago, it seems Armageddon looms.

Joe Biden is already probing historic lows for presidential popularity. Soaring inflation, surging crime rates, chaotic misrule at the southern border, the disastrous exit from Afghanistan and widespread popular resistance to the authoritarian progressivism his party pushes in everything from the unsexing of human biology to the mandated flagellation of white culture and much of American history have turned off voters.

He gets tepid approval for his handling of the war in Ukraine but otherwise Biden’s presidency is about as popular as Covid. Add in a recession, and the risk of a generational electoral shift away from the governing Democrats rises higher.

Chief Executive Officer of My Pillow businessman Mike Lindell speaks during a rally in Delaware, Ohio, on April 23. Picture: AFP

According to the Real Clear Politics average of recent polls, his approval rating is locked down at 41 per cent. That’s marginally higher than the low scored by Donald Trump – but his predecessor’s popularity is hardly a benchmark Biden wants to aim at.

In the midterm elections, now just six months away, Republicans have an average poll lead of four percentage points. That may not sound like much but the Democrats led by six points just a year ago. In other words, signs continue to point to a blowout for Republicans in the midterm elections. But there’s still no guarantee of a longer term Republican ascendancy. Even as he consolidates his position as the de facto leader of the Republican Party, Trump continues to turn off independent voters.

In commenting on his latest Harvard/Harris monthly poll this week, Mark Penn, chief executive of media company Stagwell, finds that, despite widespread dismay at the Democrats’ record, voters are unenthused about either party: “Americans are looking for change in their political candidates. Majorities of voters don’t want either Joe Biden or Donald Trump to run in 2024.”

The poll found 37 per cent support among all voters for Biden to run again and 45 per cent for Trump. Fifty-eight per cent say they’re open to an independent candidate if the contenders from last time are the same two on offer.

As those four horsemen close in, Americans are looking for a white knight.

The Times