For Republican governors, all economic success is local

WASHINGTON (AP) — Gov. Greg Abbott, R-Texas, often bashes President Joe Biden for high inflation and a looming recession, a popular GOP argument heading into the November election.

But inflation is even worse in Texas’ major cities than it is nationwide. Government figures show inflation is 10.2 percent in the Houston area and 9.4 percent around Dallas, higher than the latest national average of 8.5 percent.

Abbott and other GOP leaders make a paradoxical argument that the US economy has sunk into a recession, but Republican-led parts of the country are still booming. These officials blame Biden’s policies for skyrocketing gas and food prices, while acknowledging the job gains those same policies helped spur.

The governor of Texas he tweeted on July 28: “The US economy is in recession under Biden. Meanwhile, Texas was No. 1 in the nation in job growth in June, and more Texans have jobs today than ever before in our state’s history.”

The Associated Press found a familiar pattern in 15 Republican-led states in which governors would laud job growth in their states on Twitter, while senators would simultaneously say the national economy as a whole was crashing. These seemingly contradictory claims were also repeated in public statements.

GOP leaders say state policies, such as low tax rates and keeping businesses open during the pandemic, helped boost hiring and investment. But their claims tend to ignore how job growth was also boosted by a historic injection of federal money that began in March 2020 and continued under Biden with the $1.9 trillion coronavirus relief package. dollars from last year.

Biden and his fellow Democrats have acknowledged the pain caused by inflation that hit a 40-year high this summer. But the president has stressed that the United States has avoided a recession because of the low unemployment rate of 3.5%. He argues that global factors such as the pandemic, fragile supply chains and Russia’s invasion of Ukraine pushed prices up, and that he is meeting the public’s needs with the economic and climate package signed on Tuesday.

“Too often we hand the biggest microphone to critics and cynics who delight in declaring failure, while those committed to making real progress do the hard work of governing,” Biden said in a jab at the GOP.

Several polls show that voters have a foreboding feeling about the economy and that most people blame the president. The researchers said there isn’t much academic analysis to show why many voters seem willing to blame inflation on White House policies and give states a pass, given that inflation had been low in recent decades and a less important factor in elections than in workplaces.

Andrew Reeves, professor of political science at Washington University in St. Louis, said most voters likely judge local and national economies by different standards. When it comes to state and local officials, voters form opinions through what they observe in their daily lives. But they often evaluate the national economy through hard numbers and political ideologies.

“The ‘national economy’ is this nebulous thing that none of us really experience,” Reeves said. “It is an abstract concept. Maybe we’re more willing to let our partisanship overshadow how we see what’s happening nationally. Joe Biden is already in office, so the honeymoon is over, and he owns this economy, whether his policies are directly responsible for it or not.

Republican governors like Ron DeSantis of Florida and Brian Kemp of Georgia are largely unscathed by inflation, even though consumer prices are significantly above the national average in both states. Inflation is 10.6% in the Miami area, 11.2% in Tampa and 11.5% in Atlanta.

What many voters in Republican states are hearing is an economic argument similar to the one Biden has tried nationally: that job growth and government finances are strong enough to insulate people from a recession.

DeSantis dismissed Biden’s claims that the U.S. economy remains healthy, calling it “Orwellian doublespeak.” The governor told the Florida Airports Council conference on Aug. 1 that his state’s budget surplus could insulate it from a recession.

“We’re not immune to inflation, we’re not immune to energy prices,” DeSantis said. “Because Florida has been open, because Florida has excelled economically, we’re in a position where we’re going to be able to meet those needs of the state regardless of what Uncle Joe throws at us from Washington, DC.”

Employment growth has been broad throughout the country. Data published on Friday by the Statistics Office found that employment increased in 43 states and remained essentially unchanged in seven states over the past 12 months.

But the bipartisan research group EIG looked at job growth in the three major Republican states (Texas, Arizona and Florida) and the three major Democratic states (California, Illinois and New York). It found that GOP areas have fully recovered and surpassed pandemic job totals, while the recovery has been slower in Democratic states.

What appears to be the far more general priority among voters is not jobs but inflation, said John Lettieri, president and CEO of EIG. At a time of political polarization, he is struck by how fears about prices cut across generational, class, regional and partisan lines.

“There is strong unanimity that the economy is a problem, inflation is the No. 1 problem, and Biden is to blame,” Lettieri said. “This cuts across all divides. All these different ways of cutting across the electorate, they all respond to this in one way or another in a strong way.”

Inflation appears to be an inescapable challenge for Biden, although other issues such as abortion rights appear to be rallying Democratic voters. Republicans can promote job gains to say why they would be better at leading the economy, without having to list, as Biden has emphasized in speeches, their own policies to lower consumer prices.

Gabriel Lenz, a political science professor at the University of California, Los Angeles, said the “best measure of what voters are personally experiencing” is a metric known as real personal disposable income. This figure looks at how much money people have after adjusting for taxes and inflation. Its changes over the past two years mirror those of Democratic political fortunes.

When Biden signed the pandemic relief bill into law in March 2021, people’s real disposable income rose 28.7% from a year ago. The aid helped revive the economy, while some notable economists warned it could also be inflationary. As prices rose over the past year and much of the aid expired, real disposable income has fallen by 3.5% over the past 12 months as a result.

Based on this number, Lenz concluded, “No wonder people are sad.”


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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!