The “return to normalcy” in American life is starting to look something like the horizon: It recedes whenever you approach it. For President Joe Biden and congressional Democrats anxious about the November midterm elections, nothing could be more ominous.
Last summer’s Delta wave dashed hopes that the deployment of COVID vaccines would quickly carry the United States back to a pre-pandemic stasis. The persistence of inflation undermined expectations from the Biden administration and Federal Reserve Board that high prices would be a temporary inconvenience. The Omicron wave that surged over the winter defied any expectation that the country was past high caseloads, crowded hospitals, and pitched battles over masking, school closings, and other public-health protections. Each time social and economic normalcy seemed imminent, it dissolved.
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Now that may be happening again. With the Omicron wave rapidly receding in the U.S., many forecasters had projected a sharply reduced health threat and a strong economic performance through 2022, including a steady decline in the inflation rate that looms as a paramount danger to congressional Democrats in November.
But the war in Ukraine and the prospects of renewed supply-chain disruptions from COVID lockdowns across China, as well as worrisome signs that the latest Omicron subvariant may be fueling another surge in Europe, has upended those optimistic projections, especially about inflation. Once again Americans are justified in wondering exactly when—or even if—life will return to its familiar pre-pandemic rhythms.
“I think all of us feel this way—when will normalcy come? ” Leo Feler, a senior economist for the economic-forecasting project at the UCLA Anderson School of Management, told me. “I wouldn’t say this is just about Biden; it’s that we collectively, as a country, can’t get a break.”
The pandemic’s persistent disruptions to American life have neutralized what some expected to be one of Biden’s greatest political assets. When he took office shortly after the January 6 insurrection, many Democrats thought that no matter what else happened—whether, for instance, he succeeded in passing his legislative agenda or not—he was governing with a powerful tailwind. The expectation was that the nation, sometime early into Biden’s presidency, was on track to contain the coronavirus and enjoy a big economic rebound.
Encouraged by his administration’s early success in a formidable wartime-style mobilization to distribute vaccines, Biden leaned into those high expectations, portraying last July 4, 2021 as a kind of Independence Day from the virus and repeatedly promising that inflation would soon subside. Instead, the pandemic and inflation have lasted longer than most Americans expected, or at least hoped. That’s less because of Biden’s decisions than external factors, especially global disruptions to the supply chain and the refusal of a substantial number of Americans, particularly in Republican-leaning areas, to get vaccinated. But the sustained turbulence has left most Americans deeply uneasy about the country’s direction—an extremely dangerous dynamic for a party holding unified control of the White House and Congress, as Democrats do now.
The White House probably has most reason for optimism on the course of the virus itself. With the domestic caseload plummeting, red and blue states alike, as well as other institutions such as professional sports leagues, are dismantling public-health protections such as mask, vaccine, and testing requirements. Every state that imposed a mandate for indoor mask wearing has rescinded it. Recent polls have found that the majority of Americans believe the worst of the pandemic is over.
Some prominent experts are raising alarms that those expectations may soon collide with another spike. The greatest concern has been provoked by indications that caseloads and hospitalizations are rising again in Europe amid the spread of the latest variant of concern, but the limited analysis that’s conducted of U.S. wastewater systems is also finding evidence of wider presence.
For now, though, Americans seem less stressed that the lingering effects of the pandemic will threaten their health so much as it will menace their wallet. Jay Campbell, a Democratic pollster who conducts surveys on economic attitudes for CNBC, told me that most Americans at this point view higher prices, rather than health dangers or restrictions on their activities, as the virus’s principal impact on their life. When people think of the disruptions created by the outbreak, he says, they are most likely to ask, “Why are grocery prices ridiculous? Why is gas at $4.35 a gallon?”
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Earlier this year, many forecasters were optimistic that the American economy was heading for a “soft landing” in which inflation would abate but job creation and overall economic growth would remain high. (The Federal Reserve Board’s interest-rate hike announced Wednesday, its first since 2018, is intended to be an early step in that process.) But uncertainty about the economy’s trajectory is notable again, primarily because of the war in Ukraine, which has already roiled energy markets and could threaten global food supplies, but also because the upsurge of Omicron cases in China has forced lockdowns there that could pose renewed threats to supply chains.
“The fog is very thick, for sure,” Mark Zandi, the chief economist at Moody’s Analytics, told me. “And it doesn’t feel like it’s easing. It feels like it is intensifying.”
Both Zandi and Feler say that they remain generally confident 2022 will produce strong job numbers and overall growth. Even if the BA.2 subvariant now surging in Europe generates more cases here, Feler says, the private sector has learned how to weather such storms without significantly pausing economic activity. Companies and workers alike now “seem to have this foresight that even if there is a wave, it will ebb,” he said.
But the Ukraine war and China lockdowns, both say, will likely erase the earlier expectations that inflation would steadily decline this year. Each had forecast that by this fall, year-over-year inflation would tumble to about 3.5 percent—less than half its current level. Zandi said he thought that, come Election Day, inflation “would still be high but everyone could see the trend lines, and it wouldn’t be the cudgel that could be used in any kind of political debate to the degree it is now.”
Both men now believe inflation could rise further in the near term, and not decline as fast through the fall; Zandi thinks it will come in at about 5 percent by then, and Feler’s projection is also in that range. (Larry Summers, the Treasury Secretary under President Bill Clinton, who was among the first to sound the alarm about possible inflation last year, this week also wrote that the latest developments in Russia and China are creating “major new inflation pressures.”) By Election Day, inflation “will be better,” Zandi said, “but it will be hard to convince people that it is.”
That’s a daunting forecast for Democrats. Polls this winter made clear that voter discontent over inflation is eclipsing the benefits Biden and his party might enjoy from the positive economic trends, such as job and wage growth.
In a maneuver that many Democrats praised, Biden, in his State of the Union address, recast his stalled Build Back Better economic plan as a blueprint to help families manage their daily expenses through help on prescription-drug, child-care, health-insurance, and utility costs. Yet the continued resistance of Senator Joe Manchin of West Virginia to any broader economic package makes it uncertain whether Biden can enact those policies.
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Some Democratic strategists believe the party can get as much electoral benefit in this fall’s campaign from simply advocating for those ideas as from actually passing them. But Campbell is dubious. “When you are the party in quasi-full control of government, it’s the expectation that you can actually do it,” he said. “You can’t say, ‘Hey if you elect us, we’ll do this’; you’ve already been elected to do this.” By preventing Biden and congressional Democrats from passing policies that respond to voters’ top concerns, “Joe Manchin is doing immeasurable damage to the party,” Campbell said.
The inability of Biden and Democratic leaders to steer their agenda past the opposition of Manchin (and on some fronts, Senator Kyrsten Sinema of Arizona) captures the larger problem Biden faces at such an unsettled moment in history. Pollsters in both parties say that voters do not unrealistically expect a president to defang all of these threats or untangle all of these uncertainties. But they do expect him to demonstrate that he is focused on them and has a plan to make them better. And many voters don’t see that in Biden, as indicated by the surveys consistently reporting that a significant majority do not consider him a strong leader.
Voters “don’t want the Jerry Springer show” that Donald Trump’s inescapable visibility gave them, “but they would like the fireside chat,” Celinda Lake, who polled for Biden during the 2020 campaign, told me. “They want Dad to tell them what’s going on and what he’s going to do about this mess.”
With these latest international disruptions once again pushing back any “return to normalcy” timeline, economists and pollsters alike tell me it may soon be too late for anything to significantly improve Americans’ views of the country’s direction before the November election. The polling averages maintained by RealClearPolitics show that the share of Americans who said the country is moving in the right direction improved hardly at all from March through November during the midterm election years of 2010 and 2014 and rose just slightly during the 2018 campaign. (Only about three in 10 Americans say things are going well now, about the same as in 2014, and slightly lower than in 2010 or 2018—all elections in which the party holding the White House suffered significant midterm losses.)
“Things could improve, but perception lags reality,” Glen Bolger, a GOP pollster, told me. “There’s a point at which you can’t change the narrative going into the midterm election. We’re not there yet, but you can see it from here.”
Zandi said that even if the turmoil in Ukraine and China prevents economic improvements before November, conditions could look much better well before the 2024 presidential election. “You get to the other side of this and you could see inflation decline very rapidly,” he said. “Obviously Russia-Ukraine makes 2022 very vexed from a political perspective, but by 2024, I think these very positive developments are more than likely to be happening.”
But, as throughout Biden’s tempest-tossed presidency, the questions of when the nation (and the world) reaches “the other side of this” and in what shape when it does, are the crucial ones. Zandi said he now thinks there’s about a one-in-three chance the American economy could sink into a full-scale recession, depending on what happens internationally. That’s about double the odds he would have placed on that possibility last year. Feler said that although he also considers continued growth a more likely outcome, he too is more worried than he was a few months ago about a downturn. “Will we have a recession? Will we have 4 percent growth?” Feler asked, identifying the utterly divergent outcomes now swirling as possibilities. “It really depends on what happens with Omicron and China, and the future of COVID and … Russia and the Ukraine war.”
For Biden, and congressional Democrats who may rise and fall with him, the scariest thing about these challenges may be how little they are within his control.
