BERNARD COLUMN: It’s the economy, stupid!

Published 10:30 am Thursday, February 17, 2022

By Jack Bernard
Bernard is a retired corporate executive

Remember that political slogan about the economy — “It’s the economy, stupid!”? James Carville, an astute Clinton advisor who understood the common person, came up with it in the 1992 election. And he was spot on. Bill Clinton used it very successfully against George Bush, defeating Bush’s run for a second term. But there was a big difference between 1992 and 2022. We were in the middle of a major recession then versus a roaring economy last year. 

In past columns, I have been vocal about how well the economy was doing in 2021. Factually, it was the best economy since 1984 (with the major exception of inflation for gas, groceries, etc. which is addressed below). GDP grew at 6.9%. Unemployment was at record low levels and is projected to be around 4% in 2022. Exports were way up, 4.6% — up from a drop of -0.1% and -13.6% in 2019 and 2020 under Trump. 

So, why hasn’t that success translated into political gains for the Democrats who control the House, the Senate and the presidency? 

Inflation and Covid (which will hopefully resolve itself) are the main factors. But extremely poor and confusing messaging is also a large part of the problem.   

The Democrats simply seem unable to convince the public of their success. They simply do not speak about positive things they accomplished and the benefits to citizens enough.   

And the very public, unnecessarily protracted Democratic in-fighting over the Build Back Better (BBB) bill has hurt them significantly … making them look like a disorganized bunch who cannot even get their party members to move in a straight line. Which is exactly what they are. Didn’t politically experienced Joe Biden know very early on that his buddy Joe Manchin had to buy in on every major item in BBB for it to pass? And that opposing big spending would help, not hurt, him at home in red West Virginia?   However, on a more basic level, we have to realize that the gains in the economy have been very uneven. The working people on the bottom have not done as well as the elites who made substantial gains in the stock market in 2021.   

Last year, inflation was nearly 7%. Wages were up 9%. But the distribution was unequal. A 12-23-21 Pew study examined this issue. Pew found that for agriculture, mining, construction, manufacturing (i.e., blue collar industries) wage increases were under 6% since the 2020 lockdown. But white-collar industries like IT, management and finance had increases between 10% to 12%.   

Accommodation and food services was the one outlier, with an 18% increase. However, wages in this sector were still the lowest of any sector even after the increase ($482/wk.). 

The Democrats were once the party of the white blue-collar working person. It can and should be once again. But it must be aware of the dinner table issues affecting the non-elites and remember “it’s the economy, stupid”. But how? 

Democrats need to focus on actions and bills related to inflation reduction and specific economic benefits for blue collar and swing voters, as well as voting rights But, the job will be monumental and bringing enough GOP Senators on board to pass these sorts of bills may not be possible.

McConnell wants to make Biden a one term President.   However, the only way for the Democrats to gain politically is for these types of key bills to pass.  Not by passing minor bipartisan bills that are very worthy (like ending closed-door arbitration, reforming the post office, banning stock trades) … but will not help Democrats in 2022 and 2024 elections. And, obviously, give up on extremely progressive bills with huge price tags and zero chance of getting 50 votes in the Senate, per the Build Back Better fiasco. Unless all 50 Democrats buy in (or some Republicans), don’t even waste your time and political capital.   Democrats usually have the right policies (with some notable exceptions) … but a consistently poor strategy for getting elected. The GOP is the exact opposite. Expect a route in 2022 and 2024 unless by some miracle the Democrats somehow change course.