Transcript: Swamp Notes — Is it the economy, stupid?

This is an audio transcript of the FT News Briefing podcast episode: ‘Swamp Notes — Is it the economy, stupid?’

[MUSIC PLAYING]

Marc Filippino
The American economy is booming. Inflation is down, jobs are up, and the S&P 500 is continuing its joyride. And that must mean that voters are feeling pretty good about President Joe Biden, right? Right?

This is Swamp Notes, the weekly US politics podcast from the FT News Briefing, where we talk about all of the things happening in the 2024 US presidential election. I’m Marc Filippino, and this week we’re talking about the issues that will define the election and whether the US economy is one of them. Here with me today is James Politi. He’s our Washington bureau chief. Hi, James!

James Politi
Nice to be here. Hi, Marc!

Marc Filippino
And I’m also joined by Rana Foroohar. She’s our global business columnist. And she writes our Swamp Notes newsletter with Ed Luce. Hi, Rana!

Rana Foroohar
Hey, Marc. Nice to be here.

Marc Filippino
So, Rana, why don’t you kick us off? For people who might have missed it, how well is the US economy doing right now?

Rana Foroohar
Well, you know, the words that economists and analysts were using after the last jobs report were, stunning. I’m speechless. I mean, this is, this is a red hot economy. We just had jobs numbers come in at double what folks thought they were gonna be. There are now 1.4mn jobs open for every American who wants one. Inflation is under control relative to what it has been. Incomes are growing. And the markets are pretty much at record highs. So, hard to find something not to like right now.

Marc Filippino
And a much different economy than the one that Biden inherited when he took office in 2021. James, my question for you is: is he getting credit for this transformation?

James Politi
Well, the answer is no, he is not, even though the economy has reached this kind of holy grail of a soft landing, which is inflation’s coming down, but there’s been no recession, no big rise in unemployment. Consumer sentiment indicators have been going up. And yet, polls on Biden’s handling of the economy still show him with a very, very big deficit. Americans have not rewarded Biden for this rip-roaring economy.

Rana Foroohar
It’s interesting because, you know, although I completely agree with James, you are starting to see glimmerings. Some of the University of Michigan data on consumer confidence has been up for the last few months, and I’m hopeful that that’s gonna start trickling into voting, voting public. I think you’re seeing glimmers of it, but we’re not there yet.

Marc Filippino
And if it does trickle through, Rana, you make this case in one of your more recent Swamp Notes newsletters that the economy won’t be the defining issue of the 2024 election.

Rana Foroohar
Yeah, and that would be strange, right? I mean, the conventional wisdom for decades really has been, it’s the economy, stupid. And I’m arguing, what if it’s not the economy, stupid? And what if it’s, say, migration or the border or abortion? You know, these social and cultural issues that we know are huge but have been overshadowed certainly in the last few years with the pandemic, war in Ukraine, the economy tanking and then recovering so spectacularly. They’ve been not so much the focus of what people were thinking about in terms of polling and voting, but they could be right at the centre of the election.

Marc Filippino
James, I’m wondering how you feel about what Rana just said. Trump is the presumptive nominee for the Republican party. What do you think the issues are that he and Biden will be compared on?

James Politi
Well, I mean, I do think that other issues are gonna be front and centre in this election, and I think, Trump’s character, the future of American democracy, abortion and the issue of personal individual rights. But I also think that the economy is an important factor. It always is. And if Biden can improve his numbers on the economy in the next few months, then that will give him a lot of protection heading into the November race. And I think that it’s really important for the Biden team to get those numbers up. And they’re trying. But so far they seem, they seem to be inelastic. Voters do not seem to be responding to the economic improvement, and they’ve only got a few months left to crack that.

Rana Foroohar
You know, one of the things, I think, just to add on to what James is saying that is happening, is there are so many vectors in play, right? I mean, so it usually takes a year after bad news for confidence to rebound. But we’ve had not just bad news, but three years of just the pandemic, two hot wars, the decoupling, deglobalisation, an AI revolution, some major demographic shifts that are not playing out the way we thought they would. I mean, there . . . I’ve been doing this job for 33 years for my sins. I have never seen this much potential movement in the economy up and down quickly. That said, I think if we see another couple of quarters of what we’ve seen — no geopolitical shocks, strong market, strong labour numbers — I agree that Biden will be in a good place in November.

Marc Filippino
But why? I mean, how much credit should we actually be giving presidents for a strong economy?

Rana Foroohar
That’s actually an awesome point. I’m glad you brought it up. And the answer is we give them too much credit and too much blame, you know. I mean, we might be talking about the Fed right now. We could easily have a whole another podcast about monetary policy.

Marc Filippino
Oh, we will. Don’t worry, Rana, we will.

Rana Foroohar
(Laughter) Well, you know what? I’m gonna wait with bated breath for that. (Laughter) But, no, I mean, it’s, you know, Bidenomics is a big deal. It is a BFD, if you will, because it’s generational. It’s a 40-, 50-, 60-year shift. We really have not seen this kind of an infrastructure program since the Eisenhower administration. You know, the amount of fiscal spending and the shift in income-led growth versus just trying to, like, buoy the markets and have this sort of saccharine high — that’s really, really different but it’s tough to message. And also people are seeing things increasingly just raw data through a partisan lens.

Marc Filippino
OK. So I’m curious. If it’s not the economy and it could be any of these other issues or all of these other issues like abortion, like immigration, how is Biden’s track record there?

James Politi
I mean, the way I see this election at the moment, Democrats are behind on the economy. They’re behind on immigration, they’re behind on crime. They are increasingly behind on foreign policy, but they’re ahead on abortion. They’re ahead on personal freedoms. And they’re ahead on the issue of Trump and American democracy, which might be the most powerful force in American politics at the moment. So that could tip them over the edge.

Marc Filippino
You bring up a great point, James, that American democracy, that really feeds into voter emotion, right, which is such a strong element of how elections are won or lost.

Rana Foroohar
You know, Marc, I want to jump in on that because I had the most fascinating experience recently. I was driving up to give a talk at Colgate University, which is about five hours north of New York. And, you know, it’s very much a tale of two states, you know. New York and the surrounding areas is one economy. Upstate New York is another one — it’s very impoverished in certain areas. And my taxi driver was a retired engineer. And I asked him, I said, what do you think of all this Biden administration investment going into the chips industry in upstate New York? And I thought he’d be delighted. And in fact, he said, well, you know, we don’t like where they want to put the factories. They’re gonna take too much water. And, you know, I could sense he was a conservative. I saw Trump signs around as we were driving and I said, well, what do you think Trump is gonna do for the economy up here? And he said, well, we just don’t like people lying to us. The Democrats are lying to us. And I thought, wow, we’re not having a policy conversation. We’re having a psychological one.

James Politi
And I think the most frustrating thing for the Democrats is that they have sort of perfectly executed Bidenomics. They’ve gotten back to full employment within a year as they wanted. They’ve successfully enacted all this legislation to promote domestic manufacturing. This is supposed to help working class people over the long term, re-engineer the economy in a more kind of equitable, sustainable way. And yet we’re in a situation where the right policy isn’t leading to political benefits. And they really wanted to get that political credit because they knew that Trump and Trumpism was lurking in 2024. And so to find themselves in this spot, I think, is quite dispiriting. And they don’t have much time to change things.

Marc Filippino
All right. With that, we’re gonna take a quick break. And when we come back we’re gonna do Exit Poll.

[MUSIC PLAYING]

[UNHEDGED PODCAST TRAILER PLAYING]

Marc Filippino
Welcome back to Swamp Notes. This segment is called Exit Poll, where we take something from the news and we get our guests’ take on it.

Guys, I don’t know if you heard, but this week is a little game that we like to call the Super Bowl.

Rana Foroohar
Oh yeah. Chilli and cornbread.

Marc Filippino
Oh yeah. That’s right. That’s exactly what I’m cooking. Chilli and cornbread. That’s right.

Rana Foroohar
Not as good as mine.

Marc Filippino
(Laughter) So I guess the big question is, you know, we’ve got the San Francisco 49ers facing off against the Kansas City Chiefs. And I guess, you know, which one do you guys want to win and which one is better for Biden?

Rana Foroohar
I think Kansas City is gonna win. I also think it’s better for Biden. But what I’m watching is sports betting because 68mn Americans are gonna bet on Sunday’s game, and one of them is my 17-year-old who’s gotten dangerously into sports betting apps like all his friends.

Marc Filippino
I mean, how could you not? I mean, the advertisements for them are everywhere. James, who’re you rooting for?

James Politi
Well, I have this . . . I have a Swiftie in the house in the form of my 10-year-old daughter. There is only one answer to that question — Kansas City. But I also think probably San Francisco needs a boost after some of the bad press that it’s gotten in the last few years. And I’d like to point out that Biden, well, he was offered an interview on CBS, a pre-Super Bowl interview, and he declined it. And I think he could have used that time to talk to the American people, but decided not to. I think that’s a miss for him.

Marc Filippino
I guess you could say he punted on the opportunity. (Laughter) Wah wah.

All right, that was Swamp Notes. I want to thank our guests, James Politi, the FT’s Washington bureau chief. Thanks, James.

James Politi
Thanks, Marc!

Marc Filippino
And Rana Foroohar. She’s our global business columnist and she writes our Swamp Notes newsletter. Thanks, Rana.

Rana Foroohar
Thanks! Fun to be with you.

[MUSIC PLAYING]

Marc Filippino
This was Swamp Notes, the US politics show from the FT News Briefing. It’s produced by Lauren Fedor, Sonja Hutson, Ethan Plotkin and Jake Harper. Special thanks to Pierre Nicholson. I’m your host, Marc Filippino. Our executive producer is Topher Forhecz, and Cheryl Brumley is the FT’s global head of audio. Check back next week for more US political analysis from the Financial Times.

[MUSIC PLAYING]