The Dow Jones Industrial Average closed above 40,000 points on Friday, after surpassing that mark for the first time in its 128-year history on Thursday. President Joe Biden's campaign was gloating that day, especially over former President Donald Trump's prediction that the stock market would collapse under a Biden administration. This victory lap was understandable. “The Dow has hit 40,000,” which means a “4% unemployment rate,” “15 million jobs created,” and other indications that Biden's economic performance is much stronger than his supposed opponent. can be added to many data points.
But while the Biden campaign is celebrating this week, news of the Dow's all-time high doesn't solve the reelection campaign's biggest problem. Americans' view of Biden's economy remains bleak. To fix that, the president will need to engage in class warfare.
The stock market's record rally is unlikely to change voters' minds, given that other indicators remain unchanged.
Of all the economic indicators that consume our daily news, the stock market least reflects the fortunes of most Americans. (More than 80% of Americans' stock holdings belong to the richest 10% of households.) Given that other indicators remain unchanged, the record stock market could change voters' minds. is low. After all, Americans' bleak view of the Biden economy remains despite other broader related policies holding steady (job creation) or improving from previous problems (inflation). in the process of.
Fortunately, diagnosis remains relatively simple. Voters don't like paying more for things. Jeffrey Pollack, the Biden campaign's head of polling, said in an interview with The New Republic earlier this week that the campaign's lack of votes in key Midwestern states was because “many voters have real economic challenges.” He said that this was because of the fact that If you ask people today, everyone knows that the number one problem is still inflation or the economy. ”
While the price trajectory for food, autos, and other essential goods has finally flattened, inflation statistics for rent and auto insurance continue to rise slightly. And it's no wonder Americans are still angry about the last price increase in the early days of the Biden administration. In addition, the Federal Reserve's interest rate hikes increased mortgage payments, car payments, and other interest payments. These rising costs are not reflected in inflation statistics, but they still hurt low- and middle-income Americans.
Unfortunately, Biden's policy options are limited. Republicans hold a majority in the House of Representatives, which blocks any legislation. And they can't force the Fed to cut rates at its next meeting, even though they really should.
This leaves the president with power, and more specifically, a bully pulpit. In late 2023 and early 2024, Biden gave several speeches, including the State of the Union, in which he attacked “corporate greed” and “shrinkflation.” However, since the speech was well-received, the president seems to have largely backed away from such attacks.
That's wrong. Mr. Biden should harshly condemn the exploitative corporations that play a role in siphoning Americans' pockets, and he should dare President Trump to do the same, confident that he will not.
Voters have already accepted this attack.
President Trump just gave Biden the perfect excuse to further emphasize this contrast. Earlier this month, the Washington Post reported that President Trump had demanded $1 billion from oil company executives. Instead, it will prioritize rolling back Biden-era regulations on the industry. The news comes less than a week after the Federal Trade Commission released evidence that Scott Sheffield, founder of shale giant Pioneer Oil, colluded with OPEC leaders to inflate oil prices. Ta. Pioneer, of course, denied this allegation as well as other price-fixing allegations in more than a dozen recent class-action lawsuits.
Democrats on the House Oversight Committee have already weighed in on what the ranking Democrat, Rep. Jamie Raskin, called “effectively selling U.S. energy and regulatory policy to commercial interests in exchange for large campaign contributions.” has published a survey. Mr. Biden has come forward and supported the effort, encouraging Senate Democrats (who, unlike House members, have subpoena power) to join the investigation and saying his administration is investigating allegations of price-fixing in the energy industry. It should be announced.
From there, Biden could give more speeches and release more clips on social media highlighting and expanding on his administration's efforts against monopolies, oligopolies and price gouging. (These speeches could also pair well with Trump's warnings about his inflation plans of across-the-board 10% tariffs.) The message is simple: Biden is fighting inflation, while Trump is profiting from it. They are protecting the people who are getting the benefits.
The data is on the president's side. According to an analysis by the Economic Policy Institute, 34% of price increases from mid-2020 to 2022 can be attributed to companies using pandemic-related disruptions as an excuse to raise prices. A 2023 study of more than 1,300 companies around the world found that corporate profits increased much faster than costs (with fossil fuel companies being the main culprits).
And there are many existing efforts by members of the Biden administration that the president can draw from. For example, the Department of Justice is currently investigating anticompetitive practices at LiveNation (Ticketmaster's parent company), Apple, and RealPage. These pricing software help landlords set rents, and the Justice Department says they collude with each other to raise rents.
Voters have already accepted this attack. A Financial Times/Michigan Ross poll conducted earlier this month found that 60% of Americans blamed “big corporations exploiting inflation” for rising prices, with a majority of respondents saying they were to blame. It turned out that he was the only one to blame. Even companies are starting to feel like they've gone too far. After McDonald's missed first-quarter sales estimates, the fast food giant recently announced $5 meal deals to lure back customers spooked by soaring prices. And unlike many issues, both Democratic and Republican voters are hostile to corporate monopolies.
Looking beyond political interests and shining a light on the true causes of inflation and other anti-consumer practices can yield surprising results. The power of Washington's various business lobbies cannot be overstated, but that power thrives in the dark like mushrooms. In April, the Department of Transportation finalized rules requiring airline passengers to be automatically reimbursed in cash if their flight is canceled without rebooking. The airline lobby quickly included language in the Federal Aviation Administration's reauthorization that would invalidate the new rules. But after Lever journalists understood the new language, Sens. Elizabeth Warren, D-Mass., and Josh Hawley, R-Missouri, who rarely see eye-to-eye on anything, decided to change the DOT rule. The bill was amended to codify it. .
Of course, business leaders won't be happy about Biden calling them out. Perhaps some potential donors will refrain from giving. But that doesn't have to worry the president. It's not just because the president already has a solid fundraising lead.
Nearly 90 years ago, just before the 1936 election, Franklin Delano Roosevelt spoke to a packed audience at New York's Madison Square Garden about the accomplishments of his first term. These four years brought about a revolution in both public services and regulation in this country, and earned Roosevelt the hatred of many business and financial leaders. “Never before have there been so many forces united against one candidate as they are today,” he told the audience. “They hate me with one accord, and I welcome their hatred.” Roosevelt won an even bigger landslide victory that year than in 1932.
Now it's Biden's turn to welcome that hatred and show voters that the same people who have skimmed Americans' pocketbooks for years want to put Donald Trump back in the White House.
