Carter and Biden Commonalities
-
WSJ paywall so....
What Carter and Biden Have in Common
Summarize
Their presidencies were both undone by inflation and U.S. weakness abroad.The Editorial BoardJan. 2, 2025 at 5:39 pm
President Biden seems to have a special admiration for Jimmy Carter, and the feeling was mutual. Carter asked Mr. Biden to speak at his funeral on Jan. 9. But Carter’s death as Mr. Biden prepares to leave office is a reminder that the men are linked in history in another way: They share a fate as one-term Presidents undone by similar political troubles—inflation and the perception of growing U.S. weakness abroad. The broad similarities are striking, even if the historical details differ.
The two Democrats presided over the largest bouts of U.S. inflation in a half century. Carter’s inflation was worse, with annual price increases reaching 13.3% in 1979. The fault wasn’t his alone, as Carter inherited a world still adjusting to the collapse of the Bretton Woods dollar standard under Richard Nixon. Federal Reserve Chairman Arthur Burns accommodated Nixon’s desire for easy money in the early 1970s, eroding the dollar’s value and sending oil prices soaring.
Carter’s contributions included a Treasury that early-on pursued a weak-dollar policy and his appointment of G. William Miller to replace Burns at the Fed. A lawyer and corporate CEO, Miller was out of his depth on monetary policy. He refused to tighten money sufficiently even as the dollar plunged.
To stem financial worries, Carter felt obliged to replace Miller with Paul Volcker in 1979, but it was too late politically. Reagan campaigned against the Carter “stagflation,” which played a big role in Reagan’s 1980 victory.
The Biden inflation was largely his own creation. His March 2021 spending blowout, on top of the Covid spending of 2020, flooded the economy with money that chased too few goods. The Jerome Powell Fed kept interest rates near zero for far too long, and inflation soared, peaking at 9.1% in June 2022. While the rate of inflation later fell, the price increases meant voters saw no raise in average real wages across Mr. Biden’s term. Trump voters told pollsters inflation and border security were their top issues, and Kamala Harris was tied to both.
This similar history is a reminder that inflation is the Achilles’ heel of center-left governments. The progressive desire to tax and spend, combined with easy money to finance the spending, is the default policy of nearly every Democratic administration.
This neo-Keynesian model associated with the late Yale economist James Tobin had no policy answer for the inflation of the 1970s, and it failed to foresee the inflation surge of the 2020s. Even now, after Ms. Harris’s defeat, Keynesians like Peter Orszag blame inflation on anything but their own policies. Voters reached a different conclusion.
The other great Carter-Biden similarity is a world of adversaries on the march amid the failure of U.S. deterrence. Carter entered office seeking to engage the leaders of the Soviet Union with arms control and conciliatory rhetoric. He warned in his first months about an “inordinate fear of Communism” and negotiated a SALT II nuclear-arms treaty.
But the Senate failed to ratify the treaty because the Soviets didn’t reciprocate. They cheated on arms and spread revolution in Central America, Africa, the Middle East and Central Asia.
Carter awakened at the end of his term, especially after the Soviets invaded Afghanistan. He proposed an increase in defense spending, but again it was too late to change the perception of U.S. weakness at home and abroad, especially after Iran took Americans hostage and held them for 444 days. Reagan’s policy of peace through strength won the day.
Mr. Biden’s great blunder was the chaotic withdrawal from Afghanistan in August 2021 that capsized his approval rating. Vladimir Putin concluded he could get away with invading Ukraine, and Iran’s Ayatollahs activated their “ring of fire” strategy around Israel. A world aflame created the opening for Mr. Trump to run as a leader who would restore order by reviving U.S. credibility and strength.
This foreign-policy weakness has been a vulnerability for Democrats since the Vietnam era. The exception was after the Cold War ended under George H.W. Bush, and foreign affairs receded in salience. Bill Clinton inherited a moment of unprecedented U.S. military and diplomatic dominance that left the world largely at peace over his two terms.
Barack Obama won in 2008 amid the financial panic while exploiting discontent with the Iraq war. But his foreign policy of appeasement was a prelude to Mr. Biden’s failures. Mr. Obama failed to respond in a serious way to Mr. Putin’s first Ukraine land grab in 2014. And his nuclear deal with the Ayatollahs financed their Middle East imperialism.
Democrats trying to explain why they lost to Mr. Trump are citing woke policies and a lost working class. Those played a role, but the abiding truth about politics in a democracy is that prosperity and peace invariably carry the day. Jimmy Carter and Joe Biden failed to deliver on both.
-
INteresting (and a lot true) in that article.
