The Biden administration’s aggressive economic recovery plan worked on paper, but high costs and bad vibes told a different story at the polls.
We’re still sifting through all the reasons that the 2024 presidential cycle turned out the way it did, but there’s clearly one factor that proved more potent than just about any other: costs. Groceries, housing, transport, recreation—everything that’s far more expensive now than it was before the pandemic recovery continued to weigh on the minds of voters of all demographics as they went to the polls. The roaring stock market, cooling inflation gauges, and positive employment metrics didn’t matter. The vibes of the so-called vibecession were very real.
It’s not hard to see why voters, time and time again, indicated that the economy was their top issue. U.S. consumers have experienced serious whiplash over the past four years, with a severe COVID recession in 2020 and inflation jumping to 5 percent the following year during a supply-chain crunch. By 2022, as the pandemic continued to ravage normal life in the U.S., Russia began its invasion of Ukraine, further pushing all-around inflation to about 8 percent—the highest level seen in the U.S. since 1981.
This has spurred a reckoning with the Biden administration’s aggressive post-COVID economic policy, which by all accounts engineered a remarkable comeback from pandemic-era hits to the economy. There were no further recessions, despite the panic from the financial press, and the labor market even came close to full employment. Yet the surge in prices was a worldwide phenomenon, with climate and war shocks adding to market woes everywhere. So much still felt unaffordable and out of reach for many Americans, even down to formerly cheap everyday goods. High interest rates, pumped up to slow down inflation, did not help with the massive debt burden that weighs on too many American families, from credit cards to mortgages to health care. Whatever the appropriate classification for this economic situation, inflation has become the catchall buzzword for a malaise as definitive and deadly now as it was early in Joe Biden’s term. To quote Isabella Weber, who helped mainstream the idea of corporate price hikes as an inflationary force: “Unemployment weakens governments. Inflation kills them.”
A quick glance back through American political history may seem to bear that out.
Nixon-era wartime inflation killed Gerald Ford post-Watergate, and “stagflation” killed his successor, Jimmy Carter. But then Ronald Reagan, who oversaw the “Volcker shock” from a Federal Reserve that escalated interest rates and threw the nation into recession in order to end high levels of inflation, was rewarded with a landslide reelection. Barack Obama’s purposefully slow-and-steady stimulus did not hurt his reelection bid in 2012, even as employment rates and general living standards continued to lag in the wake of the Great Recession.
Did Biden do the wrong thing on an electoral level, then, to pour billions of dollars into the U.S. economy through a corpus of massive legislation—the American Rescue Plan, an infrastructure bill, the Inflation Reduction Act, the CHIPS Act—and make sure people got back on their feet, instead of remaining jobless? Did a worldwide “cost-of-living crisis” trump the benefits of a working economy? Did none of it matter anyway, in light of the sheer disinformation that informed countless voters’ choices at the polls?
It’s complicated, according to Claudia Sahm, a former Federal Reserve economist, who told Slate that on paper the Biden administration made all the right moves to combat inflation. It’s dropped drastically over the past two years—it’s been about 2 percent through 2024—yet voters are still unhappy with the economy. However, there’s a silver lining: wage growth. Since September 2023, wage growth has outpaced inflation, while unemployment has also remained low. That’s a recipe for success.
“The good way to deal with inflation is to have people’s wages catch up,” Sahm explained. “We have seen inflation really start to slow down in the second half of 2023, and we had a strong labor market through much of the recovery.” Despite the Biden administration overseeing this positive trend, huge swaths of voters seemed to be looking for pre-pandemic prices that were last overseen by Donald Trump. According to Sahm, that’s unlikely to ever happen.
“A lot of people have this feeling, ‘Well, until prices go down, I’m not going to be happy.’ And you really want to be careful what you wish for,” Sahm said. “The only time prices go down in a broad way is during the Great Depression. We don’t want that.”
It comes down to consumer psychology: It takes time to get comfortable with higher price tags when you remember a time not so long ago when you didn’t have to pay so much for certain items or services. When this happens, Sahm notes that both people and the government point fingers for inflation. “The Fed blames them because they’re buying so much stuff and creating demand, but consumers want to blame someone so they’re going to blame either the government or businesses,” she said.
