After Biden’s first year, the US economy is surprisingly healthy. His prospects are not

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Despite victories from Covid to climate change, the president is hamstrung and the nation as divided as ever

At the 12-month mark, the obituaries for the Biden administration are being written. The polls are terrible. Biden’s marquee legislation is stalled. In recent weeks, even appeals by the president to the hallowed legacy of civil rights have failed to move the Democratic party’s holdouts in the Senate – Joe Manchin and Kyrsten Sinema – thus blocking the passage of voting rights legislation. While the president invoked Abraham Lincoln and Martin Luther King, Manchin countered with the need to preserve the 232-year tradition of conservative stability in the Senate. Not for nothing, 2022 starts with talk about civil war.

It is a depressing picture. It is, however, worth reminding ourselves of where the nation was 12 months ago. As 2021 began, it was an open question whether the United States still had a functioning government. There was no orderly transition. The Trump administration simply gave up on Covid. As we now know, America’s senior soldiers were deeply concerned about the nuclear command chain. Then on 6 January there was the riot in the Capitol – now a morbid obsession of the Democrats – and the news from Georgia of the double Democrat win in the Senate runoff. It is on that thin basis that the Biden administration has since attempted to govern.

The restoration of normality that followed in the spring of 2021 was undeniably a relief, affirmed by the rapid rollout of vaccines. In foreign policy, Biden announced that the US was back. America rejoined the Paris climate treaty. Biden reasserted presidential control of the military command chain, insisting on his policy of withdrawal from Afghanistan, whatever the price. There were to be no distractions. All America’s resources were to be concerted around the competition with China. He was even open to a deal with Russia.

In March 2021, the passage of the $1.9tn American rescue plan was a big win. On top of the two other stimulus packages carried by the Democratic majority in 2020, the rescue plan has catapulted the US to the most rapid economic recovery on record. So large is the rebound that it has stretched global supply chains and engendered fears of a wage-price spiral. The inflation talk is now so deafening that it is worth reminding oneself that achieving a tight labour market was the point. As Biden remarked when employers complained about not being able to find workers: “Pay them more.” The problem for Biden, if there is one, is not that wages are increasing, but that they are not increasing rapidly enough. It is the erosion of real household purchasing power that makes inflation unpopular and means that Biden is not getting the credit you might expect given the surprisingly healthy state of the economy.

Read the full article at The Guardian

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