“It’s the economy, stupid.” That quip by a strategist running former US President Bill Clinton’s poll campaign in 1992 against incumbent George H.W. Bush was directed at Democrat activists and intended to corner Bush who, despite high popularity ratings in the wake of the Gulf War in 1991, saw his appeal among the electorate diminish dramatically as the economic recession began to hurt. In the event, Mr Clinton won a famous victory and Bush was a oneterm Republican president. Over three decades later, it’s still the economy which is the main issue in the US presidential poll. Only, the boot is on the other foot. The predicament for ruling Democrats in America as the country heads into election year with an increasingly frail President Joe Biden and a significant element of uncertainty about whether he will make a bid to be his party’s presidential candidate despite his advanced years, seems to be getting acute. For months, now, commentators point out, economic pundits and Biden administration officials have expressed their bewilderment at the persistently poor rating the US president has received for his management of the economy.

According to them, job growth has been robust, the country has been at or near full employment during the past year, and as increasing numbers of Americans have entered the workforce, the labour force participation rate has risen above the level that pessimists regarded as its ceiling. President Biden has also successfully negotiated landmark economic legislation to invest in infrastructure and advanced manufacturing. What’s not to like? The answer, says political analyst William Galston, may lie in a report released recently by the US Census Bureau. Corrected for inflation, the earnings of most US households declined significantly last year. For households in the middle of the economic distribution, the decline was 2.3 per cent, from $76,330 in 2021 to $74,580 in 2022. In all, about seven in 10 households, representing about three-quarters of the electorate, experienced reduced incomes.

What should be even more worrying for the administration, adds Galston, is that the decline was across the board: It included men as well as women; married couples as well as single-headed households; and full-time as well as part-time workers. The culprit for this state of affairs appears to be the rate of inflation, which at 7.8 per cent outstripped the rate of pay increases so that the income of most households did not buy as much as it had in the previous year. Americans noticed this decrease, and as the opinion polls indicate, they clearly did not like it. The way ahead for the Biden administration on the economic front with the USA now also pulled back into West Asia from which it spent the past decade trying to extricate itself even as the Ukraine War meanders on, is full of obstacles. Mr Biden’s pivot to a domestic political agenda with a laser-like focus on keeping inflation under control is a near-certainty by the end of the year.