Tom Minear: The lesson of Bidenomics for Anthony Albanese

Joe Biden has successfully tamed inflation but his poll numbers remain dire. Tom Minear argues there’s an important lesson in that for Anthony Albanese.

When inflation soared to the highest level in decades, Joe Biden and Anthony Albanese faced the same challenge: bringing it back down without crashing their economies.

What neither leader grasped is that succeeding would not guarantee their political success. In fact, if the President’s example is anything to go by, curbing inflation and boasting about it is a recipe for political pain. And if the Prime Minister is not careful, he risks making the same mistake.

The White House has spent months spruiking Bidenomics, the President’s agenda that has achieved what seemed impossible even a year ago: inflation under control, economic growth, low unemployment, and rising real wages.

US President Joe Biden has recently stopped referring to Bidenomics in his speeches. Picture: Andrew Caballero-Reynolds (AFP)

But Mr Biden has recently ditched the label as polls show Americans are so worried about the economy and so unhappy with his performance that Donald Trump is now the bookies’ favourite to win next year’s election – even after being arrested four times.

This contradiction, while it has befuddled economists and commentators, will be easy to understand for most of you. Inflation went up and now it’s coming down, but that does not mean prices are falling, only that they are increasing more slowly.

Here in New York, as is the case in Australia, the sticker shock remains real. We can’t believe what we pay for coffee; our power bills keep climbing; we grimace at real estate ads. Even if we receive a pay rise, it doesn’t feel like enough to cover what we spend.

Inflation took a welcome dip down under last week, and while it remains more stubborn in Australia, Mr Albanese may still match Mr Biden’s win of reining it in and avoiding a recession. At the same time, he has delivered responsible relief including cheaper medicines and childcare and power bill subsidies.

However, on the test the Prime Minister set for himself – that life will be better under Labor – this record is unlikely to be enough to pass. Fairly or not, that is the judgement many will make when they compare their rent payment or their supermarket receipt to a couple of years ago.

Mr Biden, perhaps to avoid looking out of touch by talking up the economy, has now changed his tune to blast “price gouging” companies that have not “brought their prices back down even as inflation has come down”.

This is deflation, and any economist will tell you it’s a bad thing. But maybe it’s the best our inflation-busting leaders can do to escape the blame for prices that will not fall.

Originally published as Tom Minear: The lesson of Bidenomics for Anthony Albanese