Biden’s Achilles Heel is Healing

The economy’s summer performance is shoring up the president’s biggest weakness

While our attention has been focused on the heat wave, Barbenheimer and the monthly set of fresh charges against Trump’, have Joe Biden’s chances for re-election been quietly rising in the background?

As hard as right wing media are desperately trying to tie Joe to his son in a Hunter Biden investigation that’s lasted twice as long as Robert Mueller’s; as hard as they combine racism, sexism and ageism to tie Biden’s re-election to empowering his vice president; Biden’s No. 1 vulnerability is the economy.

Two months ago, I wrote a piece on just how bad consumer confidence was and how important it was to Biden that it improve for him to have a decent chance at re-election.

Continued job growth, a year of declining inflation, an economy that continues to resist recession predictions, and - just maybe - a few stories that the massive infrastructure Biden pushed through Congress is leading to a surprisingly quick burst of private investment might be finally bearing fruit. The University of Michigan Consumer Confidence Index rose from 64.4 to 71.6 in July.

Let me put that rise in perspective. Let’s assume the index doesn’t budge for two months, meaning the 7.2 point jump this month also would be a 7.2 point jump for the July-September quarter of 2023. Since 1978, only 14% of all quarters have managed a 5-point or higher jump, the highest being 16.5 points in spring 1983, as Reaganomics and the Federal Reserve began to pull the nation out of a multi-year slump.

So a 7.2 point jump for the quarter would be remarkable. It would, in fact, be the highest quarterly bump in more than a decade, since a 10.8 point rise in the first three months of 2012.

Still, this jump is more like a promising first step than mission accomplished. As my previous post pointed out, the incumbent president’s party has won re-election with a U of Michigan index less than 90 only once since 1980 - Obama’s 2012 re-election with the index at 79.4. So Biden needs an additional 8 point bump just to get to that modest level.

In other words, Biden has to hope July’s big rise creates some momentum that leads to higher and higher consumer confidence. What are the odds of that?

Not great. Of the 26 previous times we saw a 5-point or more bump in the index, the following quarter averaged a 2-point drop. It managed a modest follow-up bump - 4 points or more - only 3 times. People’s opinion of the economy resists sharp swings in either direction.

And people’s opinion of Biden haven’t changed much, either. Biden’s consensus job approval rating is still 13 points underwater (unfavorable opinions minus favorable opinions), according to Five Thirty Eight, only 3 points better than Trump‘s net rating.

So why did I suggest in this post’s lead paragraph that Biden’s chances for re-election might have improved? I think there’s good reason to believe the historic standard (a consumer confidence index in the 90s or better to get re-elected) won’t apply to Biden in 2024. An index in the 70s might well be enough, and anything

above 80 should make Biden a formidable opponent, absent some disastrous news (a surge in Russia’s fortunes in the Ukraine war, a Biden health scare a la Mitch McConnell, real evidence tying Joe to Hunter and millions of ill-gotten dollars).

The index will be pose a kinder, gentler standard for Biden because Biden has a not-so-secret weapon. Let’s save that discussion for part II.