American Voters' Economic Discontent Shadows Biden Successor

"President Biden wanted to be a transformative president who expanded the state's role in American life as Lyndon B. Johnson had. To a striking extent, he succeeded, pushing through milestone legislation on infrastructure, semiconductor manufacturing and green energy.

But when the public thinks of Biden's economic record, they focus on something else: Inflation, which in 2022 hit a 40-year high before receding. Inflation endangered Biden's re-election even before concerns about his age emerged. Those concerns led him to announce Sunday he wouldn't seek re-election, and to endorse Vice President Kamala Harris as the Democratic nominee for president.

The question now is whether Harris, or any other Democrat, will be similarly burdened by public unhappiness about the economy -- or instead can pivot to focusing on the future, where the candidate stands a better chance against Republican nominee Donald Trump.

The Democratic nominee will have to contend with Biden's economic record. The $1.9 trillion American Rescue Plan that Biden signed shortly after he took office embodied both his ambition and overreach. Biden and his staff saw it as a vehicle for progressive goals such as a vastly expanded child tax credit. It was to be followed by "Build Back Better," which would shower billions more on green energy, universal prekindergarten, expanded healthcare subsidies, paid leave, child care, eldercare and public housing. And because the economy was in crisis, they reasoned, the more they spent, the better.

But the premise was wrong. The economy wasn't in crisis. It had been growing rapidly since mid-2020 thanks to stimulus passed under Trump, an end to social distancing, and vaccines. It wasn't being held back by inadequate demand, but inadequate supply, as the pandemic snarled logistics chains and drove millions from the labor force. The collision of new demand with constricted supply sent inflation soaring.

Build Back Better eventually foundered on opposition from moderate Democratic senator Joe Manchin of West Virginia. In retrospect, he may have done Biden a favor. His opposition headed off another potentially inflationary surge of spending. Meanwhile, smaller pieces of Biden's agenda passed separately as the Infrastructure and Investment Act, the Chips and Science Act, and the Inflation Reduction Act, the first two with Republican votes.

Their ultimate legacy remains to be seen. The Chips act is bringing to the U.S. the capacity to make advanced semiconductors that now exists exclusively in Asia. The Inflation Reduction Act has encouraged investment in solar energy, electric vehicles and batteries.

The legislation represents a major shift by the U.S. into industrial policy -- the use of state instruments to allocate capital to favored sectors. The shift seems likely to endure even if Trump, who shares Biden's skepticism of free trade and fondness for domestic manufacturing, returns to the White House next year.

Yet while all three laws were broadly popular, they have barely registered in the public's consciousness. Instead, poll after poll found abysmal approval of Biden's handling of the economy, a disconnect that frustrated Biden officials and perplexed outside observers. After all, in terms of growth in economic output and jobs, or the decline in unemployment, his record thus far ranks among the best of any presidential term since 1980.

Even inflation, while still higher than the 2% that prevailed before the pandemic, is now down to about 3%, and getting close enough to 2% that the Federal Reserve should soon lower interest rates.

That is overshadowed by the cumulative 20% increase in prices since Biden took office, the unaffordability of homes and the failure of wages to keep up with prices. Those factors contribute to a pervasive sense of instability fueled by changes to life and work brought on by the pandemic, high levels of unauthorized immigration, conflict in Ukraine and Gaza and intensifying polarization.

Historians will get to decide Biden's true economic legacy. For now, the more pressing question is whether public antipathy similarly drags down whoever takes his place as the Democratic nominee for president.

Harris will find it almost impossible to distance herself from Biden's record. In a similar way, Vice President Hubert Humphrey, who became the Democratic nominee in 1968 after Johnson declined to run, struggled to distance himself from the deeply unpopular Vietnam War, and went on to lose narrowly to Richard Nixon.

An outsider such as Pennsylvania Gov. Josh Shapiro or Michigan Gov. Gretchen Whitmer would carry less baggage than Harris but still bear the brunt of anti-incumbent ire. In 2008, Republican John McCain was close to Democrat Barack Obama in the polls until mid-September, when Lehman Brothers failed. McCain was running to succeed another Republican, George W. Bush, and voters blamed the ensuing crisis on the party that then held the White House.

Still, while any Democratic nominee has to shoulder Biden's record, he or she might at least do better defending it, and taking the attack to Trump, than Biden did in his disastrous June debate.

While the public remembers Trump's economy fondly, he has vulnerabilities.

His running mate, JD Vance, may sound populist pro-worker notes, but Trump's own rhetoric still emphasizes tax cuts and tariffs, neither of which are particularly popular. Economists believe his plan to raise tariffs, deport unauthorized immigrants and cut taxes will raise inflation, interest rates and deficits.

No one knows if they are right. But the more the Democratic nominee can talk about the future under Trump rather than the past under Biden, the better his or her chances will be." [1]

Asians will not produce the most advanced computer chips in America. There are no people in America who could work in those factories. The same situation is in infrastructure and green manufacturing. Democrats just used taxes of Americans to bribe companies who can do nothing good and trade unions who are hungry for cash and power. The train of the American economy is heading into a spectacular crash. Kamala Harris is right showing that she is a stupid smiling prosecutor who understands nothing.

1. U.S. News -- Analysis: Voters' Economic Discontent Shadows Biden Successor. Ip, Greg.  Wall Street Journal, Eastern edition; New York, N.Y.. 23 July 2024: A.3. 

A hall full of like-minded people came to support the "sovereign" avoiding military service: we will fight for him

 It is darkest before dawn. Until Trump is elected in November and everyone reconciles, Lithuanian conservatives will take to court ourchildren and grandchildren who do not want to kill anyone, pollute our nature with cluster bombs dangerous to civilians, buy a lot of unnecessary military junk with our tax money, scare, call names and attack everyone who thinks differently. Let's finally stop electing conservatives to the Lithuanian parliament - Seimas.

 

Karo tarnybos vengiančio „suvereno“ atėjo palaikyti pilna salė bendraminčių: už jį kausimės

Tamsiausia būna prieš aušrą. Iki Trumpo išrinkimo lapkričio mėnesį ir visų susitaikymo Lietuvos konservatoriai teis mūsų vaikus ir anūkus, nenorinčius nieko užmušinėti, terš mūsų gamtą civiliams pavojingomis kasetinėmis bombikėmis, pirks daugybę nereikalingo karinio šlamšto už mūsų mokesčių pinigus, baidys, pravardžiuos ir atakuos visus kitaip galvojančius. Nustokime, galų gale, rinkti konservatorius į Seimą.
 

Tikslas dekarbonizuoti JAV ekonomiką buvo tik Bideno apsimestinė afera, leidžianti duoti kyšius profesinėms sąjungoms ir kai kurioms įmonėms mainais už balsus rinkimuose. Bidenas niekada nenorėjo greitai dekarbonizuoti JAV

 

„Šiuo metu svarstymuose visą laiką elektra varomos transporto priemonės (EV). Didžiosios naujienos buvo prezidento Xi Jinpingo kelionė po Europą, kuri akivaizdžiai neapėmė Berlyno ar Briuselio, o jis išskrido į Paryžių, Budapeštą ir Belgradą po grasinimu dėl ES antisubsidijų muitų Kinijos elektromobiliams. Tai plačiai nuskambėjęs JAV prezidento Joe Bideno pranešimas apie tarifus elektromobiliams ir kitiems produktams.

 

 Xi yra EV mylėtojas

 

 (Tai daina.) Kodėl dabartinis prezidentas, kandidatuojantis į perrinkimą, likus šešiems mėnesiams iki rinkimų dienos nusprendė atskleisti iš esmės simbolinius tarifus, manau, niekada nesužinosime. Kaip daugelis žmonių jau teisingai pažymėjo prieš paskelbiant, net 100 procentų muitai JAV elektromobilių rinkai, kurioje Kinijos prekėms jau dabar leidžiama taikyti 27,5 procento tarifus,bei Infliacijos mažinimo įstatymo EV mokesčių lengvatų vartotojams, perkantiems kiniškas mašinas, beveik nieko nereikš.  Tikrasis veiksmas čia yra tas, ar Kinijos įmonės galės į JAV rinką įnešti automobilius per Meksiką.

 

 Taigi elektromobiliai prisijungia prie plieno „grynai fiktyvioje“ Bideno tarifų kategorijoje. Prezidentas neseniai pareiškė, kad padvigubins plieno tarifus, nors dėl dešimtmečius atkakliai taikomų antidempingo ir kompensacinių muitų Kinija užima panašiai mažą JAV plieno rinkos dalį.

 

 Nuspėjama, kad tarifai bus susiję su gana akivaizdžiu piktnaudžiavimu JAV prekybos teise. 301 skirsnio nuostatos, kuriomis remiasi Bidenas, buvo sukurtos, siekiant kovoti su konkrečiais nesąžiningo prekybos partnerių elgesio atvejais, o ne kaip visapusis pasiteisinimas varžovo sumušimui. ES bent jau daro savo antisubsidijų tarifus pagal knygą.

 

 Šis veiksmas taip pat rodo įdomų politinį skaičiavimą – simbolinis muitų padidinimas vertas tokio keršto rizikos, kokią grasino Kinija įvesti prancūziškam konjakui. Be keršto (arba, ko gero, vietoj) Pekinas galėtų iškelti Pasaulio prekybos organizacijos bylą arba pasitenkintų grubių žodžių šaukimu per USTR pašto dėžutę ir pabėgimu, o tai turėtų maždaug tą patį poveikį.

 

 Tačiau svarbiausias dalykas yra toks: Baltiesiems rūmams nerūpi tai, kaip greitai JAV priima elektromobilius.

 

 EV skverbtis į JAV automobilių rinką myliomis atsilieka nuo Kinijos ir, iš tikrųjų, ES.

 

 EV pardavimai JAV lėtėja, o JAV gamintojai pereina prie hibridinių. Ir vis tiek administracijai daugiausia rūpi JAV įmonių rinkos dalis, o ne rinkos dydis.

 

 Jau nuo Bideno administracijos pradžios buvo aišku, kad IRA ir kitos vyriausybės programos turėjo pasiekti įvairius tikslus vienu metu ir tam tikru momentu ji turės pasirinkti. Šių tikslų hierarchija dabar yra akivaizdi.

 

 Žaliosios technologijos (dar vienas pavyzdys yra saulės baterijos), kurias pagamintų JAV, pageidautina sąjungos darbo jėgos, yra daug svarbiau nei, iš tikrųjų sumažinti, kaitinančią Žemę, ekonomiką.

 

 Xi - elektromobilių mėgėjas

 

 (Kita daina, nors kiti pateko į šią pirmiau.) Tai atveda mus prie ES ir jos pačios EV problemų. Kinijos prezidento vizitas Europoje praėjusią savaitę sukėlė beveik tiek pat kalbų apie vidinį susiskaldymą, kiek ir Eurovizijos dainų konkursas, nors ir šiek tiek mažiau geopolitinių ginčų.

 

 Tačiau nepaisant visų kalbų apie „skaldyk ir valdyk“, Xi, praleisdamas savo laiką, iškilmingai pasirašydamas draugystės memorandumą su Vengrija ir meilę bombarduodamas Serbiją (7 mln. gyventojų, BVP mažesnis, nei Liuksemburgo, greitu metu nestojanti į ES), yra šiek tiek blogas nuosmukis nuo tų laikų, kai Kinija subūrė „17+1“ draugų grupę Vidurio ir Rytų Europoje.

 

 Tiesą sakant, Viktoro Orbano jaukinimasis su Xi nėra egzistencinė grėsmė ES, kaip ekonominiam ir prekybos blokui, kaip ir Vengrijos ministro pirmininko susikalbėjimas su prezidentu Vladimiru Putinu. Orbanas yra oportunistinis vadovas, kuris turi nuolat uždirbti pinigų savo klientų režimui finansuoti, o ne principingas euroskeptikas ar net antidemokratinis ideologas. Jo nuolatinė laikysena padėjo išlaikyti sanglaudos lėšas iš Briuselio, nepaisant teisinės valstybės sumetimų: tai nesukėlė rimtos grėsmės, kad ES galėtų iširti.

 

 Orbánas niekada nepaliks ES ir nesunaikins jos, nes tie pinigai išnyks kartu su brangiais Vengrijos darbais Vokietijos automobilių tiekimo grandinėje. (Anksčiau buvo kalbėta, kad Vengrija yra labiau Audi-okratija nei autokratija.) Jis taip pat neperša savo svorio ES diskusijose Pekino vardu. ES sukūrė daugybę prekybos priemonių, skirtų panaudoti prieš Kiniją, kurių Vengrija rimtai nebandė blokuoti.

 

 Bet ar nebus tie vokiški automobilių darbai pakeisti kiniškais automobilių darbais? BYD, siekianti iki 2030 m. parduoti daugiau nei „Tesla“ ES, Vengrijoje stato pirmąją ES gamyklą. Na, čia yra daugiau nei politinės ir reguliavimo rizikos. Kaip jau rašiau praėjusią savaitę, jei Europos Komisija pasinaudos Užsienio subsidijų reglamentu (FSR) prieš Kinijos įmonių Europoje statomas elektrinių transporto priemonių gamyklas, viskas gali tapti labai pikantiška.

 

 Pasirinkdama, ar priešintis valstybės subsidijuojamoms Kinijos elektromobilių gamykloms Europoje, ES susiduria su savo dilema. Ar ji nori padaryti ekologiškesnę savo ekonomiką labiau, nei nori, kad elektromobilius Europai gamintų tik Europos gamintojai?

 

 Skirtingai, nei JAV, ji jau beveik priėmė tokį sprendimą dėl saulės baterijų ir pasirinko ankstesnį variantą, importuodama Kinijos saulės energijos gaminius didžiuliu mastu.

 

 FSR tyrimas dėl Kinijos automobilių gamyklos Vengrijoje iš tikrųjų būtų ES politinio klausimo užtaisas. Tai taip pat ne taip tolima ateitis. BYD nori, kad gamykla pradėtų veikti per trejus metus. Ponios ir ponai, atlikite statymus!" [1]

 

Kai JAV sėdi už EV tarifų sienų, Kinijos elektromobiliai perima pasaulio rinką. Netrukus, jau labai greitai, JAV liks be automobilių pramonės. Įmonės ir sąjungos, kurios dabar ima Bideno kyšius, išnyks kaip išnyko Solyndra. Koks amerikietiško talento ir amerikietiškų mokesčių švaistymas.

 

1. US is skulking behind EV tariff walls. Beattie, Alan.  FT.com; London (May 13, 2024). 

The goal to decarbonize US economy was Biden's a pretend scam allowing to give some pork to the trade unions and companies in exchange for their votes in election time. Biden didn't want to decarbonize US anytime soon

"Welcome to Trade Secrets. Right now in the trade world it’s all electric vehicles all the time. The big news was President Xi Jinping’s tour of Europe, which conspicuously didn’t take in Berlin or Brussels but did alight on Paris, Budapest and Belgrade, with the threat of EU anti-subsidy duties on Chinese EVs providing some tasty context. It’s the widely trailed announcement of US tariffs on EVs and other products by President Joe Biden. Charted waters is on governments losing fuel tax revenue as consumers switch away from conventional cars.

Xi’s an EV lover

(It’s a song.) Why an incumbent president running for re-election has chosen to unveil largely symbolic tariffs six months before polling day I guess we’ll never know. As lots of people have already correctly pointed out ahead of the announcement, duties even of 100 per cent will mean almost nothing to the US EV market, where Chinese goods are already kept out by a combination of 27.5 per cent tariffs, plus exclusion from the Inflation Reduction Act’s EV tax breaks for consumers. The real action here is whether Chinese companies will be able to sneak autos into the US market via Mexico.

EVs thus join steel in the “purely performative” category of Biden tariffs. The president recently said he would triple steel tariffs, but because of decades of assiduous use of anti-dumping and countervailing duties, China has a similarly tiny share of the US steel market.

Predictably, the tariffs will involve a pretty blatant misuse of US trade law. The Section 301 provisions Biden is invoking were designed to counter specific instances of unfair treatment by trading partners, not serve as a catch-all excuse for bashing a rival. The EU is at least doing its anti-subsidy tariffs by the book.

The action also shows an interesting political calculation — that symbolic increases in tariffs are worth the risk of retaliation of the kind China has threatened to impose on French cognac. As well as (or, improbably, instead of) retaliation, Beijing could bring a World Trade Organization case — or it could just content itself with shouting rude words through USTR’s letterbox and running away, which would have about the same effect.

But the most important thing is this: the White House isn’t mainly bothered how quickly the US adopts EVs. 

EV penetration of the US car market is miles behind that of China, and indeed the EU. 

Sales of EVs in the US are slowing and US manufacturers are switching to hybrids. And still the administration is mainly concerned with US companies’ market share, not the size of the market.

It was clear right from the beginning of the Biden administration that the IRA and other government programmes were supposed to hit a variety of different goals simultaneously and it would at some point have to choose. The hierarchy of those goals is now evident. 

Having green tech (solar panels being another example) made in the US, preferably by unionised workforces, turns out to be far more important than actually decarbonising the economy.

Xi’s electric

(Another song, though others got to this one first.) Which brings us to the EU and its own EV issues. The Chinese president’s Europe visit last week caused almost as much talk of internal divisions as the Eurovision Song Contest, though if anything with a bit less geopolitical argy-bargy.

But for all the talk of divide-and-rule, Xi spending his time solemnly signing a memorandum of comradeship with Hungary and love-bombing Serbia (population 7mn, GDP smaller than Luxembourg, not joining the EU any time soon) is a bit of a comedown from the days when China assembled the “17+1” grouping of pals in central and eastern Europe.

In reality Viktor Orbán’s cosying up to Xi isn’t an existential threat to the EU as an economic and trading bloc, any more than the Hungarian prime minister’s bromance with President Vladimir Putin. Orbán is an opportunist chancer who needs to keep generating cash to finance his clientelist regime, not a principled Eurosceptic nor even an anti-democracy ideologue. His posture-striking down the years has helped to keep the cohesion money rolling in from Brussels despite rule-of-law considerations: it has not created a serious threat of breaking up the EU.

Orbán will never leave or destroy the EU because that money would disappear, along with Hungary’s precious jobs in the German auto supply chain. (It’s been said before that Hungary is an Audi-ocracy more than an autocracy.) Nor does he particularly throw his weight around in EU debates on Beijing’s behalf. The EU has created a bunch of trade tools to use against China that Hungary has not seriously attempted to block.

But won’t those German car jobs get replaced by Chinese car jobs? BYD, which is aiming to outsell Tesla in the EU by 2030, is building its first EU plant in Hungary. Well, there’s more than a touch of political and regulatory risk there. As I wrote last week, if the European Commission uses the Foreign Subsidies Regulation (FSR) against the EV manufacturing plants Chinese companies are building in Europe, things could get very spicy indeed.

In choosing whether to move against state-subsidised Chinese EV factories in Europe, the EU faces its own dilemma. Does it want to green its economy more than it wants EVs to be built by European-owned manufacturers? 

Unlike the US, it has already pretty much made that decision with solar panels and gone for the former option, importing Chinese solar products on a massive scale.

An FSR investigation against a Chinese auto plant in Hungary really would be a corker of a political question for the EU to face. It’s not that far in the future either. BYD wants the plant up and running in three years. Ladies and gentlemen, place your bets please!" [1]

When US is sitting behind EV tariff walls, Chinese EV take over the world market. Soon, very soon, US will be left without auto industry.  The companies and the unions taking Biden's pork now will disappear like Solyndra did. What a waste of American talent and American taxes.

1. US is skulking behind EV tariff walls. Beattie, Alan.  FT.com; London (May 13, 2024).