Events Change Things

Last night, I gave a talk on running elections and polling data. The bottom line for you is that every pollster I have talked to agrees the polls are off. But they all also agree that trendlines in polling averages are still helpful and indicate an accurate trend.

Republican and Democrat polls have shown increasing, but still low, approval for President Biden. They’ve also shown a shift in voter sentiment towards the Democrats. But, as I have said repeatedly, events change things. Yesterday, such an event occurred.

As Democrats gathered at the White House to celebrate the Inflation Reduction Act, inflation went up more than expected despite gas prices falling. As a result, and in anticipation of higher interest rates, the markets plunged. Joe Biden did that.

The Right To Bear Memes @grandoldmemes

Update

Notably, after Biden celebrated the Inflation Reduction Act on the day inflation spiked, he flew to Delaware to vote in an election. Instead of casting an absentee ballot, the President of the United States got on board a Boeing 757, used two motorcades, and local police all to go cast a ballot in an election with no seriously contested races. Marie Antoinette anyone?

Jennifer Jacobs @JenniferJJacobs

Biden employed two motorcades, local police protection and the Boeing 757 version of Air Force One to fly from DC to Delaware vote in an election with no high-profile races on the ballot, @Jordanfabian and @jendeben report bloomberg.com/news/articles/…

Jenny Leonard @jendeben

On whether he’s worried about the market reaction to CPI numbers: “The stock market doesn’t necessarily reflect the state of the economy, as you well know. The economy is still strong, unemployment is low, jobs are up, manufacturing is good. So I think we’re gonna be fine.”

The wind at the Democrats’ backs turns out to be an economic hurricane building. We are already in a technical recession, and the recession of fundamentals is building. It’ll hit sometime in the first quarter of next year right as Democrats try to assess their future and Biden’s future. It will probably last for so long, with so much damage to the economy, that even once we are out of it, people will not feel good about things.

And right now, Democrats control everything in Washington and want to make the election about abortion and Donald Trump.

It’s the economy, stupid. It always has been. The GOP just needs to stay on message. Don’t look now, but Larry Summers, who every Democrat keeps an eye on, says the Fed going all the way to 4% with interest rates will not get inflation back down to 2%. They’ll have to go higher.

Lawrence H. Summers @LHSummers

With core inflation running above 7 percent this month and likely, given rent behavior, to remain elevated, I fear it is unlikely that a peak Fed funds rate around 4 will be enough to restore 2 percent inflation.