It's still the economy, stupid

A large sign was prominently displayed at campaign headquarters with big bold letters: “It’s the economy, stupid.” James Carville, one of Bill Clinton’s primary advisors wanted all to stay focused on the primary issue in the 1992 election.
 
Voters say this is the main issue in 2024. Polls repeatedly reveal voters think Trump is better at handling the economy than Harris. Democrats have done a miserable job of addressing the economy, partly because you can’t fully explain it in a thirty second sound bite!
 
But Trump’s campaign team has wisely positioned this discussion on economics very simply. “In November 2020 a gallon of gas was $1.80 and mortgage rates were 2.5 percent. Are you better off than you were four years ago?”
 
Whenever an economist starts explaining even the simplest concept, people’s eyes glaze over. The charts and technical jargon they use leave even us who want to understand economics confused. Some pretty darn good economists have helped me. Let’s see if I can help explain.
 
Return with us to November 2020. COVID had struck America full force in March. People were sick and dying. Workers were sent home, stores and businesses closed, events like the ACC basketball tournament were cancelled. We were told to wear masks, wash our hands frequently and isolate ourselves. NOBODY WAS DRIVING! Roads were like deserts.
 
Economic principle #1: Gas and home mortgage rates are subject to the laws of supply and demand. When demand suddenly crashed, suppliers had millions of gallons of gas going unsold. And people staying home weren’t riding around looking at houses. The year before, in November 2019, a gallon of gas was $2.59 and home mortgages were 3.66 percent. I just paid $2.72 per gallon!
 
Back to 2020. The economy tanked. Leaders grew concerned about the existential threat of not just a recession, but a full-blown depression. Homeowners couldn’t pay their mortgages, consumers worried about affording groceries and necessities. Businesses were threatened with bankruptcy. Something had to be done head.
 
The consensus of political, economic and business leaders was that the economy needed to be stimulated. In March 2020 (Trump was President), the government sent stimulus checks of $1,200 to every tax filer and $500 per child. It helped, but not enough. In December 2020 (Trump was still President), the federal government sent an additional stimulus check of $600 per tax filer and $600 per child. Recovery was sluggish. More was needed. In March 2021(Biden was President), the federal government sent $1,400 per tax filer and $1,400 per child to residents. Billions of dollars were given to businesses, especially small businesses, nonprofits and to state and local governments.
 
The nation was literally awash with cash.  Remember our frustration of going to the grocery store and finding shelves empty of toilet paper, paper towels and other essentials? Ships were waiting offshore for weeks trying to unload goods, wholesalers were swamped with orders they couldn’t fill because of the lack of labor. It was maddening.
 
Economic principle #2: When the demand for goods and services is greater than the supply of those goods, prices rise. Call it inflation. And that’s what happened.
 
Trump claims that our nation’s inflation rate under Biden rose to the highest of all time. A BIG LIE. In 1946, following World War II, inflation was 18.10 percent. It hit 12.3 percent in 1974 following the Arab Oil Embargo, then 13.3 percent and 12.5 percent as we headed into the recession of 1980.
 
The highest monthly inflation rate in the US during 2021-24 was 9.1 percent in June of 2022. It started declining the next month. Last month it was 2.5% - almost at the target rate for the Federal Reserve of 2 percent.
 
Now being human, we want to find someone to blame for our problems. Rather than blame the Chinese (who were probably responsible for spreading COVID) or just blaming the disease, we blame the government.
 
But when your barn is on fire it doesn’t help to blame the wood and the straw that spread it.
 
And even though Mr. Trump has some culpability for his poor response to Covid, let’s be honest and say nobody knew exactly what to do. Our government probably put out too much money too fast, hoping to stave off a depression. They surely could have been more efficient deciding who got the cash and whether it was used correctly. But it worked.
 
Here’s my spin: If you carefully read this piece (and I hope you did) you can understand why a logical explanation isn’t easily explainable in one or two sentences. And even if you believed the explanation, it’s just easier to blame Biden.
 
Despite what you constantly hear from some, our economic recovery is stronger than any in the world and, with the Federal Reserve’s rate cuts, our economy should get even better.
 
You are better off than you were in November 2020!
 
Tom Campbell is a Hall of Fame North Carolina broadcaster and columnist who has covered North Carolina public policy issues since 1965.  Contact him at tomcamp@carolinabroadcasting.com