Do voters really want to re-up for four more years of Biden-Harris policies? This is the main question of the 2024 election, since Vice President and Democratic presidential nominee Kamala Harris has said she cannot think of a single thing she would do differently from President Biden.
Consider the mess Biden and Harris have created. Their outrageous federal spending delivered inflation at multi-decadal highs. This is now spawning worker pay hikes that could well spur a second round of price increases. The consumer is tapped out, and the jobs market is now softening. Meanwhile, North Korea has moved closer to Russia. Iran and Saudi Arabia are apparently set to host joint military exercises for the first time. Israel is under siege. Will voters elect Harris to deal with these problems, most of which her own administration created or let happen?
Inflation has come down, but the general Biden-Harris price increase of more than 20 percent is probably with us forever. And even now, further inflation hasn’t disappeared. The core Consumer Price Index (excluding food and energy) in September rose 3.3 percent from the year earlier, accelerating for the first time since 2023 and stubbornly higher than the 2 percent target set by the Federal Reserve. That’s why interest rates (and mortgage rates) have surprised investors by moving up, not down, despite a recent Fed rate cut.
Looking ahead, news that Boeing’s machinists have just turned down a contract offering a 35 percent pay hike over four years is concerning. The rejection of a nearly 9 percent annual pay increase confirms the warnings coming from a Strategas study showing that inflation surges are almost always followed by a second wave of price hikes. That’s partly because workers who see their real wages drop tend to demand that they be made whole.
East Coast dockworkers, whose crippling strike was halted only until January, are looking for a similar pay boost. Their prospective deal with a shipping group reportedly included a 61.5 percent wage increase over six years, as well as a ban on port automation, which they view as threatening their jobs. Those are unreasonable demands, but will a new president risk shutting down a large sector of the economy to push back?
In a bid to attract blue-collar votes, Joe Biden and Kamala Harris have encouraged labor groups to organize and, like the UAW, to negotiate for aggressive wage increases. Those demands are a ticking time bomb, as the costs will inevitably be passed along to consumers.
Meanwhile, Bloomberg reports that consumer debt is through the roof — up almost 50 percent in the last three years. Spending habits formed during the post-COVID Biden bonanza days are hard to squelch. Now they are being kept alive through massive borrowing, which is spawning rising delinquencies. Consumer sentiment, already depressed, is trending downward, as concerns about high prices and a softer job market escalate.
Eventually, the consumer will fold and the economy will stall.
It isn’t just consumers who have piled up debt, of course — so has the federal government. Our deficit rose to more than $1.8 trillion in the latest fiscal year, 8 percent above the fiscal 2023 total, even as post-pandemic it was meant to start coming down.
Economists and legislators are increasingly sounding the alarm: Budget-busting federal spending must end. As the BRIC nations convene and push for the creation of an alternative to the dollar, these concerns only become more acute.
Famed investor Paul Tudor Jones said on CNBC recently: “We are going to be broke really quickly unless we get serious about dealing with our spending issues.” Putting his money where his mouth is, Jones added, “Post election, I will own zero treasuries and will be shorting the long end of the curve.” This red flag is effectively a prediction that, down the road, there will be fewer buyers of our government debt.
If Congress takes action (unlikely) and begins to cut spending, or if Elon Musk actually makes the government more efficient and less costly, that would be a win for the U.S. — but also without doubt a drag on growth.
Meanwhile, while Joe Biden brags about bringing our allies closer, he has also knitted together what George W. Bush might have called a robust axis of evil. With his timid, limited backing of Ukraine, Biden has allowed its conflict against Russia to drag on with no end in sight. A million Russians and Ukrainians are said to have died because of Vladimir Putin’s aggression. But assuming that Russia would run out of money or troops while Ukraine plays defense has proven a fantasy. North Korea is reportedly sending highly trained regiments to Russia, buttressing its capabilities, while China’s ties to the Kremlin have never been more secure or more ominous.
In the Middle East, Biden’s insane adherence to Barack Obama’s coddling of Iran has led to the worst regional conflict in decades. The Biden-Harris White House failed to enforce the tough sanctions that Donald Trump imposed on the terror-backing regime, allowing Iran’s oil exports and income to expand exponentially. As a result, billions have gone toward arming and enabling Iran’s proxies, including Hezbollah, Hamas and the Houthis.
The U.S. is caught up in this conflict, and the path forward almost certainly entails more bloodshed and more outlays for the defense of Israel.
None of this had to happen. When Trump left office, the Gulf Arab nations were partnering with Israel, eager to provide a bulwark against Iran’s militancy. The Abraham Accords provided the most hopeful path toward Middle East peace in a generation; the agreements were squandered by an inept and wrong-headed White House.
These are just a few of the tests awaiting the next president. In addition, the influx of millions of migrants has stressed the budgets of cities and towns across the nation. Our open border has invited in hundreds on the terror watch list, creating a serious national security threat.
Is Harris, who has partnered with Biden in creating these problems for the past four years, able to deal with these challenges? Voters will soon decide.
Liz Peek is a former partner of major bracket Wall Street firm Wertheim and Company.