The Importance of a Pocketbook President
By Ahmad Ali and Colin McAuliffe
Joe Biden should be a popular president — at least more popular than he is now. He oversaw the withdrawal of Armed Forces from Afghanistan and ended the longest war America has ever fought. His legislative agenda is set to reduce child poverty and provide the greatest investment our nation has ever made in clean energy. Several of the proposals included in the current Build Back Better Act are some of the most popular policies across party lines ever entertained by Congress, such as capping the out-of-pocket cost of insulin for insured Americans. The United States has seen an unprecedented economic recovery and growth during the ongoing coronavirus pandemic.
Why might his approval rating be low?
The recent hike in food and gas prices came at a time when Americans were already spending way more on goods than even before the pandemic. Distribution bottlenecks in our supply chains made headlines earlier as families geared for the holiday season. Consumer sentiment across party lines has also seen downward movement these past few months — despite retail sales climbing and real disposable income trending upward. Large corporations today are boasting some of their widest profit margins since the 1950s.
These circumstances might begin to explain the strong association between presidential job approval and what we call the “pocketbook anxieties'' of voters. Sweeping legislative accomplishments in Washington may take several years to manifest into material benefits for communities. Yet Americans today are paying more than they expect at the pump or register — and supply-chain-shortage notices in retail stores and price-per-gallon signs at gas stations are no help either. Spending more for the same thing is sure to upset people. We wrote a piece earlier on the directional relationship between presidential disapproval and rising gas prices; that relationship can still be observed today.
The rise of education polarization and postmaterialism has wrapped pocketbook issues even tighter around the throes of partisanship and expressive political identity. This might reflect the political economy of inflation itself. Yakov Feygin suggests that a growth economy is good for workers and profits, but the resulting inflation might be net-negative if you live off assets as income. Older Americans, specifically retirees, feel the weight of this kind of inflation strongly. Their disproportionate political power and engagement yields resultant backlash at the polls.
The current American homeownership rate is around 65%. Homeowners are another significant and overlapping share of the American population that is sensitive to price increases on food and gas; they do not actively feel the crushing weight of rent as it increases across the nation. Their current household budgets might also be tight and constrained. American homeowners often view their property as an appreciating asset that can be leveraged to compensate for falling wages. As Feygin writes:
Examining the current political landscape through the politics of inflation is illuminating: members of right wing populist movements, for example, are unified by a desire to preserve capital gains on asset ownership, whether they are CEOs of major banks or suburban homeowners needing to compensate for falling wages. The slogans of the Tea Party and the populist right in the United States against new spending clearly demonstrate this fear of inflation.
Beyond what Feygin suggests, it seems as though consumer attitudes and pandemic-influenced movement within our economy have disrupted American politics en masse. In the past few decades inflation was experienced most by disempowered Americans paying more in rent and healthcare costs; now inflation is hitting political and cultural groups that have more influence. Pocketbook issues are back with powerful force. The latest polling from Data for Progress finds that voters are overwhelmingly concerned inflation will increase and outpace wage growth in the upcoming year.
Addressing the simple problems voters face in their ordinary lives is good political intuition and has been for decades. Administrations throughout recent history have been keen to wield the power of the pocketbook presidency. Perhaps a Republican president says they will cut taxes across the board. Perhaps a Democratic president promises stability in our energy markets — meaning cheap retail gas — as their agenda brings America closer to a reliable clean energy economy.
Joe Biden understands the gravity of pocketbook issues. The White House has already made powerful steps towards addressing immediate rising costs and supply chain issues by increasing productivity at our ports and coordinating with other high-growth nations to release from the Strategic Petroleum Reserve, bringing down the price of retail gasoline.
And these commitments from President Biden extend well beyond pandemic-worsened inflation. They are also consistent with his message on bold domestic legislative priorities. Chief of Staff Ron Klain said during an interview last weekend that “our focus with Build Back Better right now is dealing with the pocketbook problems that Americans are having. The price of prescription drugs is too high; Build Back Better brings it down. The price of health care is too high; we are going to address that. The price of elder care — taking your kids to preschool — all high costs that are pinching people’s pocketbooks.” This reflects a greater realization in the Democratic Party: we must focus our priorities around the acute and chronic pocketbook anxieties that plague American working and middle class families.
President Biden must continue to promote measures that counter rising food and gas prices. Shelves must be stocked and supply chains must be decongested. The White House should further anticipate pocketbook issues before they become widely felt by voters. The pause on student loan repayments expires soon and the expanded Child Tax Credit is set to expire by the end of this year; making such relief permanent would change the lives of tens of millions of American families. Transitioning to clean energy will ensure Americans are free from volatility in gas prices at a time when clean energy and battery prices are already decreasing at incredible rates. Punishing pharmaceutical companies for raising drug prices three times faster than the rate of inflation could save families thousands of dollars over their lifetimes. Cutting down on corporate greed might prevent sudden price hikes that would otherwise be mistaken as simple inflation.
That is the power and importance of a pocketbook president like Joe Biden.
Ahmad Ali (@RealAhmadAli) is Press Secretary at Data for Progress.
Colin McAuliffe (@ColinJMcAuliffe) is a Co-Founder of Data for Progress.