It’s the inflation, stupid: Why a ‘vibecession’ is hurting Biden – despite an economy which is the envy of Europe
In the circumstances, the numbers could hardly look much better.
A year or two ago, the conventional wisdom was that America was facing a terrific recession.
Instead, according to the latest data from the International Monetary Fund, the US has outperformed pretty much every other major economy in the world (including China).
In its latest World Economic Outlook report – the most closely-watched set of international forecasts – it upgraded the US more than nearly every other major economy.
From a European perspective, there is much to be jealous of about America’s recent performance (most European nations, including the UK, saw the IMF downgrade their growth forecasts).
Yet here’s the puzzle. Despite this comparatively strong economy, despite having seen a lower peak in inflation than most European nations (especially the UK), American consumer confidence remains in the doldrums.
It’s not just Europeans who find this perplexing. So too does the White House.
The White House worries it’s not getting credit for the strength of the economy with voters. Pic: Reuters
They pumped cash into the manufacturing sector at the very moment it needed it, via a series of expensive programmes including the CHIPS Act (to bring semiconductor manufacturing back home) and the Inflation Reduction Act (to encourage green technology firms to set up factories in the US).
The idea was that from the depths of the pandemic, America would “build back better” – that Biden would emulate Franklin D Roosevelt and his New Deal of the 1930s.
And most conventional statistics suggest that strategy is bearing fruit. Manufacturing employment is rising; factories are being constructed at the fastest rate in modern history. And gross domestic product – the most comprehensive measure of output – is rising. Unlike in the UK or Germany, there was no recession.
So why, then, is consumer confidence so weak? Why are Biden’s approval ratings – the key polling benchmark for the US leader – lower than pretty much any of his predecessors at this stage in their terms?
Travel around Pennsylvania, as we have done over the past few days, and you encounter all sorts of explanations.
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It’s the inflation, stupid
Food banks are getting busier; and while some businesses are beginning to see that federal money trickling down, many of the programmes are still at the approval stage. The money hasn’t arrived yet.
But, above all else, you hear one recurrent answer: it’s the cost of living. It’s food prices, it’s gas prices, it’s rents.
And there’s also a big gap here between life through an economic prism and the life lived on Main Street in places like Bethlehem PA – an old steel town trying to reinvigorate its economy.
Talk to an economist and they’ll remind you that inflation – the rate at which prices are changing over the past year – is finally beginning to drop. But while this is statistically true, it misses a couple of pragmatic realities.
First, prices aren’t going down; they’re just rising a bit less quickly than they were before. The squeeze hasn’t gone away.
Second, while economists often fixate on the change in the consumer price index over the past year (3.5% in March), what the rest of the population notices is the change in prices over a longer period.
Over the past two years prices are up around 9%. Over three years, they’re up 18%.
In other words, the explanation for the “vibecesssion”, as economists have christened it (there’s no formal recession but the vibes feel bad), might actually be exceptionally simple: It’s the inflation, stupid.
Summing up what voters care about, an adviser to Bill Clinton once said ‘it’s the economy, stupid’ during a 1990s US election race. Pic: Reuters
In Pennsylvania, perhaps the most critical of all the swing states in the US, the question is whether Donald Trump can capitalise on this disaffection to win over the citizens who abandoned him last time around.
In the meantime, the Biden White House is biding its time, hoping that those New Deal economic textbooks they followed when pumping cash into the economy are really to be trusted.
There are 161 people still missing in Texas in the aftermath of last weekend’s deadly flash floods, the state’s governor has said.
Speaking at a news conference on Tuesday, governor Gregg Abbot said the number of missing had risen markedly.
He said among the missing were five children and one counsellor from Camp Mystic – where at least 27 people were killed in the flash flooding.
At least 109 people are confirmed to have died in the floods, which took place on the 4 July weekend, but this figure has been steadily climbing ever since.
People comforted each other in Kerville. Pic: Jason Fochtman/Houston Chronicle via AP
The bulk of deaths, and the main search for additional bodies, have been concentrated in Kerr County and the city of Kerrville.
The area was transformed into a disaster zone when torrential rains struck the region early last Friday, unleashing deadly flooding along the Guadalupe River.
Travis County, Kendall County, Burnett County, Williamson County, and Tom Green County were also hit.
Mr Abbot said many of those who were unaccounted for were in the Texas Hill Country area, but had not registered at a camp or hotel, posing further challenges for authorities.
Camp Mystic
Mr Abbot planned to make another visit to Camp Mystic.
The century-old all-girls Christian summer camp was badly hit by the flash floods, with at least 27 campers and counsellors dying.
Hanna Lawrence, left, and Rebecca Lawrence, right. Pic: John Lawrence/AP
Lila Bonner (L) and Eloise Peck both died in the flash floods at Camp Mystic, Texas. Pic: Family handout
Chloe Childress. Pic: Debra Alexander Photography via AP
Some of the victims include Hanna and Rebecca Lawrence, both eight, Chloe Childress, 19, who was among the counsellors at Camp Mystic when the flood hit, and Eloise Peck and Lila Bonner, both nine.
There were scenes of devastation at the camp as the flood water receded.
Outside the cabins where the girls had slept, mud-splattered blankets and pillows were scattered.
Also in the debris were pink, purple and light blue luggage, decorated with stickers.
A view inside a cabin at Camp Mystic after the flooding. Pic: Ronaldo Schemidt/AFP via Getty Images
Camper’s belongings lie on the ground following flooding on the Guadalupe River, at Camp Mystic.
Pic: Reuters
‘Everything looked flooded and broken’
One of the campers, 10-year-old Lucy Kennedy, told Sky’s US partner network, NBC News, that she woke up to the sound of thunder at around midnight before the floods struck.
“I couldn’t go back to sleep,” she said. “I just had a feeling that something really bad was about to happen.”
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She said the girls at the camp were told to grab blankets, pillows and water bottles and line up single file as the floodwater rose, before getting airlifted to safety.
Wynne Kennedy, Lucy’s mother, added: “When I saw her, she was wrapped up in a blanket, had a teddy bear.
“We just held each other tight, and I held her all night.”
Their home in Kerrville was also destroyed by the flash floods.
Lucy Kennedy, 10 who was rescued from Camp Mystic, and her mother Wynne. Pic: NBC
Political row
Meanwhile, a political row has unfolded parallel to the recovery efforts, with some questioning whether local authorities sent out warnings and alerts early enough.
Similarly, Democrats have criticised Donald Trump over cuts his Elon Musk-launched Department of Government Efficiency (DOGE) has made to the National Weather Service – but it isn’t clear whether these actually made any difference.
Read more:
Sisters killed in Texas flooding found holding hands
Why did deadly Texas floods catch people by surprise?
Wall of water
The flash floods erupted before daybreak on Friday, after massive amounts of rainfall caused the Guadalupe River to rise by eight metres in less than an hour.
The wall of water overwhelmed cabins, tents and trails along the river’s edge.
Some survivors were found clinging to trees.
Some of the campers had to swim out of their cabin windows to get to safety, while others clung to rope to make it to higher ground.
The date for Sean “Diddy” Combs’s sentencing hearing has been confirmed.
Following his high-profile trial, the hip-hop mogul was found guilty of two counts of transportation for prostitution by jurors in Manhattan, New York, last week – but was cleared of sex-trafficking and racketeering conspiracy.
Defence lawyers argued Combs, who has been in prison in Brooklyn since his arrest in September last year, should be bailed ahead of sentencing given the not guilty verdicts for the more serious charges, but Judge Arun Subramanian denied this – citing, among other things, the rapper’s own admissions of previous violent behaviour.
Sean ‘Diddy’ Combs in court after the verdict was delivered. Pic: Reuters/ Jane Rosenberg
The charges of sex-trafficking and racketeering conspiracy carried a potential life sentence. Combs still faces up to 20 years in prison for the prostitution-related offences, but is not expected to receive the maximum punishment.
After the verdict was delivered, the judge scheduled the sentencing hearing for 3 October. At a remote follow-up conference on Tuesday, with agreement from the defence and prosecution, the judge approved the date.
Combs joined the call but did not make any comment.
Any sentence will include credit for time already served – which will be just over a year by the time the hearing takes place.
During his trial, Combs was accused by prosecutors of abusing and coercing three alleged victims, including his former long-term partner, singer and model Cassie Ventura.
Jurors found the allegations did not amount to sex-trafficking or racketeering, or running a criminal enterprise – but they did find him guilty of transporting Cassie and another former girlfriend “Jane” for prostitution offences around the US, and paying male escorts to engage in sexual encounters.
Despite the guilty verdict on those charges, the 55-year-old’s team described it as “the victory of all victories”.
Read more:
How the trial unfolded
The rise and fall of Sean ‘Diddy’ Combs
In an interview over the weekend, defence lawyer Marc Agnifilo said Combs had received a standing ovation from fellow inmates when he returned to jail after being acquitted of the more serious charges.
“They all said, ‘We never get to see anyone who beats the government’,” he said.
Ahead of sentencing, Combs’s lawyers will file their recommendations by 19 September, with prosecutors likely to follow a week later.
Prosecutors previously said the rapper could face about four to five years in prison under federal sentencing guidelines, while the defence has suggested a two-year sentence.
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