Joe Biden’s ‘middle out’ means out in the cold
Hugo Gurdon
President Joe Biden has a problem with the rhetoric he uses about how he’ll grow the economy. After November’s consumer inflation number came in at 7.1%, he repeated his favorite line about how he’s “making progress building the economy from the bottom up and the middle out.”
It’s true that the awful November number was below the more dreadful 9% peak hit in June, and price hikes are lessening as the Federal Reserve turns the screws by raising interest rates. This could push America into recession. Some analysts expect a deep one.
But recession aside, Biden’s rhetoric is risky even for a man whose rhetorical currency has always been risky bravado.
Analysis by the Wall Street Journal finds that the very people Biden claims to be helping — the ones building from the middle out — have suffered most from the inflation he and his fellow Democrats unleashed with their multitrillion-dollar spending since the spring of 2021.
Consumer inflation has hit the middle class worse than the upper class or working class. Between May 2020 and May 2022, the middle fifth, sixth, and seventh deciles of earners saw prices rise 15.3%, 15.5%, and 15.4%. Top earners suffered a lesser 13.7%, and, at the bottom, the damage was 14.6%.
So, what has been building out for the middle class was what they must pay for goods and services. Their incomes are not keeping up.
It is a strange fact that most Americans, nearly nine out of every 10, think of themselves as middle class, even when they are among the highest or lowest earners. Attorneys might make seven-figure salaries but say they’re middle class, and so do people in jobs normally thought of as blue-collar and working class. But only 10% of people in this country identify as working class.
This is an interesting contrast to my native Great Britain, which has an odd aspiration downward, not upward, and where 47% of middle-class people say they are working class. It apparently has to do with identity going back further to old roots.
But in America, if 90% of people identify as middle class, it’s a problem for Biden and the Democrats that middle-class people are being hit worst by the inflation their economic policies caused.
It might be argued that what really counts is not how people identify themselves but what income decile they fall into, and what is actually happening to their buying power. But here, too, there is a gap between what Biden says and what people feel. Middle-class wealth peaked in March and has been declining ever since. This did not deliver the win Republicans expected in the midterm elections, but those in the middle are likelier to report difficulty in maintaining their standard of living — they’ve shifted to cheaper brands — and 77% said last June that they expected to be in recession by New Year.
Everyone is focused on what the economy will do in 2023, which is a sign of nervousness. And in politics, perceptions are as real as data. Biden is hoping, the Fed is hoping, and we’re all hoping it is a happy new year.