Hero to political toast: The achievement Harris should keep quiet about

It’s a puzzle at the heart of US politics, and it occurs in Australian politics, too. Americans consistently say that by far the most important issue for them is the state of the economy. And when Joe Biden began his televised address from the Oval Office to the nation this week, he reminded them that he began his term when the country was in its worst downturn since the Great Depression.

He went on to boast: “Today we have the strongest economy in the world.” And the next morning the official report vindicated his claim. The economy had grown soundly in the three months to the end of June at an annualised rate of 2.8 per cent. “America’s economy roars,” as The Economist magazine put it.

On paper, the US economy is leading the world, but voters want more. Vice President Kamala Harris and President Joe Biden, who hopes she’ll take his place.Credit: AP

The Wall Street Journal summarised: “The US economy accelerated in the second quarter as consumers increased their spending, businesses invested more in equipment and stocked inventories, and inflation cooled.”

A headline earlier this year from the Axios news site continues to be true: “US winning world economic war.” Among the G7 wealthy democracies, America’s economy stands out.

Yet Biden’s economic boast came at the very moment he was political toast. His address to the nation was the beginning of his long goodbye. He was explaining why he’d decided to withdraw from the contest for re-election.

There’s “a time and a place for new voices, fresh voices, yes, younger voices”, he said. “And that time and place is now.” His economic jubilation was set amid his political humiliation.

We all saw it. His own political party forced him out, the first time since 1968 that a Democrat president has pulled out of the race for re-election in an election year.

Biden was an unpopular president for years before the much-publicised debate performance where he showcased his decrepitude. And despite all the hype about that debate, it didn’t much move the dial on Biden’s electoral standing; his post-debate poll slippage was in the margin of polling error.

The debate panicked the Democrats into forcing Biden off the ticket, but it didn’t make him unpopular with the American voter. He’d been there for years. If his economic performance had earned him hero status heading into the election, he’d likely still be on the ticket. This is the puzzle, and it’s not unique to America. How can a president, a government, deliver a solid economic performance yet receive little or no credit for it?

Performance without payoff challenges one of the greatest underlying assumptions of modern democratic politics.

Is this voteless boom because the growth was a natural post-COVID rebound, nothing to do with the government? No. “The great paradox” of a doddering president, according to London’s The Economist, “is that he has presided over perhaps the most energetic American government in nearly half a century.

“He unleashed a surge in spending that briefly slashed the childhood poverty rate in half. He breathed life into a beleaguered union movement. And he produced an industrial policy that aims to reshape the American economy.”

And it’s working. The magazine cites the boom in factory construction: “Even accounting for inflation, investment in manufacturing facilities has more than doubled under Mr Biden, soaring to its highest on record.”

Is it because the growth failed to deliver jobs, a so-called jobless recovery? Not at all. Biden was able to say, truthfully, that in his term the US had created “nearly 16 million new jobs – a record. Wages are up, inflation continues to come down, the racial wealth gap is the lowest it’s been in 20 years.”

America’s employment rate was in the 3 per cent range, and remained there for more than two years until just a couple of months ago, a purple patch for employment unseen since the 1960s. Bewildered and frustrated by the people’s persistent ingratitude, a progressive US economist, Dean Baker of the Centre for Economic and Policy Research, wrote last year: “We constantly see reports in the media that people are unhappy about the economy and they blame President Biden. I, along with many liberal/left colleagues, have been telling people to shut up and enjoy the good times.”

We now see how that turned out. Biden is the one being shut up by his own party, economic policy success notwithstanding. The Biden economy is like the hapless Rodney Dangerfield – “can’t get no respect”.

The electorate, of course, does have perfectly rational reasons for dissatisfaction with the economy. At the lived level, rather than the headline level. Pollster Celinda Lake, president of Lake Research Partners in the US, explains: “The aggregate economic numbers are a lot better than people feel personally, and the way they feel personally is driven by rising costs of food, gas and housing, so people feel like they’re really not keeping up.

“The second thing is that the economy has been so up and down that it feels very insecure and a substantial proportion of people feel there’s going to be a recession, and yeah, you can get jobs, but you need multiple jobs to keep up,” Lake tells me. “Voters are driven by the direction of the economy rather than the level, and they think it’s very up and down.”

And it’s here, on expectations for the future, that Americans are most disenchanted, says Lake. They’ve lost faith in the American Dream. “Now you have 65 per cent of people think their kids won’t be better off than their parents are, and they are very angry and upset about it. It’s just a fundamental violation of what America is supposed to be all about.”

Lake, a Democrat who’s currently working for the Democratic National Committee, says the party has three perception problems on economic policy in the electorate. “The first is they are seen as out of touch – ‘inflation is getting better, what planet are you on?’ Second is that over 60 per cent of people say the Democrats have no plan, and third, even if they had a plan they can’t deliver it.”

On a deeper level, a fascinating paper by three US academics and social advocates argues that the nexus between delivering material benefits to people and their political attitudes is completely broken. They title their paper “The Death of Deliverism”.

“Delivering for people on economic issues is an important goal in itself, but it is not an antivenom for the snakebite of authoritarianism,” sociologist Deepak Bhargava and his colleagues wrote last year in the journal Democracy. “The emotional alchemy of the authoritarian approach is so strong that it can override material reality.”

They argue that for an authoritarian – read Donald Trump – to succeed, he simply feeds on people’s unhappiness without needing to do anything to actually fix the sources of it.

But a progressive party – read the Democrats, or Labor – needs to make people feel happy in ways that include but transcend economic benefit, they argue: “Economic changes may be at the root of what ails us, but they are refracted through people’s lived experience with things like violence, addiction, mental health problems, social isolation, loneliness, and a sense of social disintegration.”

They cite the famous 1958 experiment by US psychologist Harry Harlow – known as “milk and cloth”. He offered orphaned rhesus monkeys a pair of surrogate parents. One wire construct held a milk bottle for feeding. The other was covered with a piece of terry cloth and offered no food or sustenance. The monkeys much preferred the comfort and reassurance of the cloth parent over the milk one. They’d go to the milk when hungry, but immediately returned to their comforting parent.

The moral of the tale? “Progressives have, too often, played the role of the wire monkey, expecting love in exchange for benefits that are vital but insufficient,” Bhargava and co write. “Safety, belonging, and dignity are fundamental to our humanity.”

Celinda Lake argues that the Democrat candidate for the presidency, Kamala Harris, gives the party “a new day” and that she’s positioned to represent the future versus Trump, who, she says, represents the past.

Specifically, Lake’s research leads her to advocate three particular campaign themes for Harris. One, mobilising voters on the highly emotive issue of abortion to offer women the prospect for more control over their choices. Two, being at least competitive on economic policy – “not where the economy is but where it’s headed”. Three, winning on the question of character.

Milk, yes, but cloth, too.

Peter Hartcher is political editor.