For Republican governors, all economic success is local

Posted at 8:47 PM, Aug 21, 2022

WASHINGTON (AP) — Gov. Greg Abbott, R-Texas, often knocks President Joe Biden for high inflation and a looming recession — a standard GOP argument going into the November elections.

But inflation is even worse in major Texas cities than across the nation as a whole. Government figures show inflation is 10.2% in the Houston area and 9.4% around Dallas, higher than the latest national average of 8.5%.

Abbott and other GOP leaders are making a paradoxical argument that the U.S. economy has slumped into a recession, but Republican-led parts of the country are still booming. Those officials are blaming Biden’s policies for sky-high gasoline and food prices, while taking credit for the job gains those same policies helped spur.

The Texas governor tweeted on July 28: “The U.S. economy is in a recession under Biden. Meanwhile, Texas was #1 in the nation for job growth in June & more Texans have jobs today than ever before in our state’s history.”

The Associated Press found a familiar pattern in 15 Republican-led states in which governors on Twitter would praise job growth in their states, while senators would simultaneously say the national economy as a whole was crashing. These seemingly conflicting claims were also repeated in public remarks.

GOP leaders say state policies such as low tax rates and keeping business open during the pandemic helped to fuel hiring and investment. But their claims tend to ignore how job growth was also boosted by a historic injection of federal money that began in March 2020 and continued under Biden with last year’s $1.9 trillion coronavirus relief package.

Biden and his fellow Democrats have acknowledged the pain caused by inflation that hit a 40-year high this summer. But the president has stressed that the United States has avoided a recession because of the low 3.5% unemployment rate. He argues that global factors such as the pandemic, fragile supply chains and Russia’s invasion of Ukraine caused prices to jump — and that he’s meeting the public’s needs with the economic and climate package signed into law on Tuesday.

“Too often we hand the biggest microphone to the critics and the cynics who delight in declaring failure while those committed to making real progress do the hard work of governing,” Biden said in a swipe at the GOP.

Multiple surveys do show that voters have a sense of foreboding about the economy and that most people fault the president. Researchers said there’s not a lot of academic analyses to show why many voters seem willing to blame inflation on White House policies and give a pass to statehouses, as inflation had been low in recent decades and less of a factor in elections than jobs.

Andrew Reeves, a political science professor at Washington University in St. Louis, said most voters likely judge the local and national economies by different standards. When it comes to state and local officials, voters form opinions through what they observe in their daily lives. But they often gauge the national economy through hard numbers and political ideologies.

“The ‘national economy’ is this nebulous thing that none of us actually experiences,” Reeves said. “It’s an abstract concept. We may be more willing to let our partisanship shade how we see what is going on nationally. Joe Biden is well into his term, so the honeymoon is over and he owns this economy — whether his policies are directly responsible for it or not.”

Republican governors such as Florida’s Ron DeSantis and Georgia’s Brian Kemp are largely unscathed on inflation, even though consumer prices are significantly above the national average in both of those states. Inflation is 10.6% in the Miami area, 11.2% in Tampa and 11.5% in Atlanta.

What many voters in Republican states are hearing is an economic argument similar to what Biden has attempted on a national scale — that job growth and government finances are strong enough to insulate people from a downturn.

DeSantis dismissed Biden’s claims that the U.S. economy remains healthy, calling that “Orwellian doublespeak.” The governor said at Florida’s Airports Council conference on Aug. 1 that his state’s budget surplus could insulate it from a downturn.

“We’re not immune to the inflation, we’re not immune to the energy prices,” DeSantis said. “Because Florida has been open, because Florida has excelled economically, we’re in the position where we’re going to be able to meet those needs of the state regardless of what Uncle Joe throws at us from Washington, D.C.”

Job growth has been broad across the country. Data released Friday by the Bureau of Statistic s found that employment increased in 43 states and was essentially unchanged in seven states over the past 12 months.

But the bipartisan research group EIG analyzed job growth in the three major Republican states (Texas, Arizona and Florida) and the three major Democratic ones (California, Illinois and New York). It found that the GOP areas have fully recovered and exceeded their pandemic job totals, while the recovery has been slower in Democratic states.

What seems to be the much more overarching priority among voters is not jobs but inflation, said John Lettieri, EIG’s president and CEO. At a time of political polarization, it’s striking to him how fears about prices are crossing generational, class, regional and partisan lines.

“There is strong unanimity that the economy is an issue, inflation is the No. 1 problem and Biden is to blame,” Lettieri said. “This cuts across all the divides. All those different ways we slice up the electorate, they’re all responding to this to one degree or another in strong ways.”

Inflation appears to be an inescapable challenge for Biden, even as other issues such as abortion rights appear to be rallying Democratic voters. Republicans are able promote job gains to say why they would be better at leading the economy, without having to list, as Biden has stressed in speeches, their own policies for reducing consumer prices.

Gabriel Lenz, a political science professor at the University of California Los Angeles, said the “best measure of what voters are personally experiencing” is a metric known as real disposable personal income. That figure looks at how much money people have after adjusting for taxes and inflation. Its changes over the past two years mirror those of Democratic political fortunes.

When Biden signed pandemic relief into law in March 2021, people’s real disposable income climbed 28.7% from a year ago. The aid helped the economy recover while some notable economists warned it could also be inflationary. As prices rose over the past year and much of the aid expired, real disposable income has tumbled 3.5% over the past 12 months as a result.

Based on that number, Lenz concluded: “It’s no surprise that people are gloomy.”