Inflation, inflation, inflation. It’s practically all we hear about from Republicans on the campaign trail, but Democrats need to point out the GOP’s ant-inflation strategies won’t make voters happy, as I noted at New York:
It’s now pretty clear that if current trends showing Republicans locking down control of the House and making gains in Senate races continue through Election Day, it will mostly be because of increasingly concentrated public concern about the economy and particularly inflation.
It’s not exactly news that sharp increases in the cost of living are deadly to governing political parties. Indeed, current international polling shows that parties unlucky enough to be in control of governments right now — whether they’re on the left, right, or center — are suffering major losses of popularity, as John Halpin of the Center for American Progress wrote at the Liberal Patriot website:
“As recent Global Progress/YouGov data from 11 leading democratic countries shows, inflation is a political wrecking ball for incumbent governments. Although citizens don’t have a consistent idea of what should be done about inflation — and many opposition parties have no clear alternative policy ideas on the matter — most voters don’t like the situation and are apt to punish sitting parties for rising costs regardless of their actions.
“Respondents in the survey were given three options about inflation and asked which one best reflects their own view. Across all 11 countries, 62 percent of citizens say they lack confidence in their own government’s ability to get inflation under control. In contrast, one-tenth of global citizens believe not much can be done on inflation and about another fifth say they have confidence in their government on inflation. ”
That’s part of the reason why Republicans in the United States are licking their chops in anticipation of Election Day. But you have to wonder how the voters inclined to reward the GOP with power thanks to inflation fears would actually feel about Republican policies aimed at fighting inflation.
As Halpin notes, it’s clear in virtually all the advanced societies battling inflation that voters do not support what used to be called “austerity” measures, like cutting public spending benefitting low-to-moderate income people, raising interest rates, or raising broad-based tax rates:
“[L]arge majorities of citizens across all 11 countries say they would oppose their own government taking action to reduce consumer prices if it means that ‘rent and mortgage payments increase’; ‘taxes paid by people like you increase’; or that ‘unemployment increases.’ The only consequence that global citizens are willing to stomach to reduce inflation is ‘rich people pay more taxes’ — an idea backed by two-thirds of people across the 11 countries.”
This does not augur well for how Republican anti-inflation plans will be received in this country. As CNN reports, far and away the most common GOP anti-inflation talking point is that “runaway Democrat spending” is responsible for today’s price hikes, and “cutting wasteful spending” is the way to rein it in:
“In mid-July, Minority Leader Rep. Kevin McCarthy tweeted, ‘Inflation is running rampant due in part to out-of-control spending from President Biden and Speaker Pelosi.”
“About two weeks later, the chair of the House Republican Conference, Rep. Elise Stefanik, went a step further in blaming Democrats, saying in a press conference that ‘inflation is skyrocketing because of Democrats reckless and wasteful spending’ and ‘this rampant inflation is a result of Democrats reckless tax and spend policies.’
“Later that day, in an interview with Newsmax, Republican Sen. Ted Cruz suggested Republicans should not support Democrat-led initiatives that call for more spending and cited Biden’s several trillion dollar proposed budget, claiming ‘when it comes to spending, spending trillions is what is driving inflation.'”
Nobody, of course, likes “wasteful spending.” But the problem Republicans will eventually run into is that the “Democrat policies” most associated with stimulating (and possibly overstimulating) consumer demand and thus reigniting inflation have been wildly popular. The direct “stimulus” payments that were supported by both parties in 2020 and continued by Democrats in 2021 are a case in point: According to Data for Progress polling in March of 2021, Americans supported the final “stimulus checks” by a 78-16 margin; supported increased funding for state and local governments by a 76-17 margin; and supported increased family tax credits by a 68-21 margin.
But more problematic for Republicans is that their anti-spending plans invariably wind up threatening programs that are even more popular than stimulus checks: Social Security, Medicare, and Medicaid. Part of Donald Trump’s appeal was that he was the first major Republican politician in a long while who did not talk about “entitlement reform” (though the health-care plan he unsuccessfully promoted to replace Obamacare did indeed hammer Medicaid). But the itch to mess with the New Deal and Great Society legacy programs never goes away in the Republican Party. And as my colleague Jonathan Chait points out, House Republican leaders are already talking about using a mandatory debt-limit vote to extort “entitlement reform” from Joe Biden and congressional Democrats:
“Republicans are committed to scaling back the safety net. But they realize this agenda is toxically unpopular — even less popular than defunding the police, a policy Democrats have repudiated en masse.
“They could try to accomplish this through compromise — the previous two Democratic presidents showed some willingness to trade social-spending cuts for higher taxes on the rich. But higher taxes on the rich are completely verboten in the GOP. And so their strategy is to force Democratic presidents to sign spending cuts into law against their will.”
Other than attacking “wasteful” — and popular — spending, what else might Republicans propose to fight inflation? As Chait noted, the most popular solution here and globally — paying for relief for regular folks by taxing the rich — is off the table until the end of time. Maybe they can have some success with expanding fossil-fuel production to reduce transportation and heating/air-conditioning prices, at the expense of the global climate. But the most effective yet politically dangerous weapon in their arsenal is to lead cheers for the interest-rate hikes that the Fed is already in the process of aggressively implementing.
The GOP’s taste for tight-credit policies is one of its dirty little secrets, dating all the way back to the 19th-century days when “hard money” defined its economic worldview. It is for many conservatives a fundamentally moral issue, fed by disdain for interest rates that let those people borrow money and live beyond their means (the fundamental complaint in the Rick Santelli rant that touched off the tea-party movement). But even on pure economic-policy grounds, Republicans have regularly groused about the Fed loosening credit to battle or head off unemployment instead of monomaniacally making inflation-fighting its only goal. And occasionally they are plain about wanting high interest rates, as conservative columnist Henry Olsen called for in March of this year:
“Rapidly rising interest rates will increase the returns to saving, which will cause some people to stop spending. But that’s in the purview of the Federal Reserve, not Congress. Congressional Republicans should call loudly for rapid interest rate hikes and pledge to conduct oversight hearings of the Fed to monitor its activity.”
You won’t hear Republican candidates specifically praising higher mortgage and car-loan costs, but it’s the predictable product of an austerity strategy for fighting inflation, along with the serious risk of a recession that is already spooking investors.
To be clear, Republicans would have to be a lot more dangerously specific about their policies on inflation if Democrats challenged them to a highly visible debate instead of changing the subject to abortion or threats to democracy, important as those topics undoubtedly are. That’s what Democratic pollster Stan Greenberg has been arguing:
“Democrats cannot be the custodians of the status quo. This insight informs Greenberg’s advice to candidates about the all-important inflation issue. Instead of boasting about signs of progress or discussing macroeconomic statistics, Democrats should recognize that the living standards of wage earners have been deteriorating for years and focus on those who are grinding them down by both holding down wages and boosting prices: rich and powerful corporations.”
At the very least, a populist counterattack on the inflation issue could force Republicans to oppose anti-inflation measures that are actually popular and admit their reliance on policies that are politically toxic. But it’s getting late in the day for that when it comes to the 2022 midterms. Democrats should at least get ready to join the inflation debate in earnest before 2024, when control of the whole federal government will be at stake.
