Kamala Harris has a penchant for odd philosophical musings that can leave you scratching your head. In a viral compilation video, the US vice-president and soon to be anointed Democratic presidential candidate is seen repeatedly urging Americans to imagine “what can be, unburdened by what has been”. The message, as far as I understand it, is not to let the past drag down your ambitions.
Harris must wish she could be unburdened by her past on economics. Her candidacy faces two competing strategies on economic policy, both littered with pitfalls. If she runs on continuity Bidenomics, she will confront its deep unpopularity with Americans. If she presents herself as a clean slate, Republicans will highlight her very left-wing pre-2021 record to scare swing voters about what a Harris presidency could bring.
Sure, the US macroeconomy might look strong today with low inflation, low unemployment and little sign of recession, but Americans remain deeply dissatisfied with President Biden’s term. Supporters of Bidenomics tout a transformative past four years, emphasising how green energy subsidies and efforts to reshore semiconductor manufacturing herald the return to a robust industrial policy for the working class. Unfortunately for them, the return the public remembers most is that of high inflation. And they hated it.
Even though headline inflation is now back near target, American food prices have shot up by 21 per cent and petrol prices by almost 50 per cent since Biden took office. In a gas-guzzling nation that likes to eat, it’s no surprise Donald Trump consistently outpolled Biden on the economy by ten points or more. Add in the fact that new 30-year fixed mortgage rates have nearly tripled to almost 7 per cent since 2021 and you sense how inflation’s fallout feels like a barrier to everyday Americans’ ambitions.
Of course, the Biden administration isn’t solely, or even primarily, to blame for high inflation. The Federal Reserve let the money supply run wild and the US economy was hit by the supply shocks of the pandemic and war in Ukraine, both of which pushed up prices.
Yet Biden’s $1.9 trillion American Rescue Plan stimulus in early 2021 and other spending bills afterwards added fuel to the fire when it was least needed, ramping up demand-side pressures that explain much more of the high inflation there than in the UK. Recent attempts by Biden and 16 Nobel prizewinning economists to credit that spending with delivering strong and inclusive growth while downplaying these inflationary effects have been given short shrift by voters.
Harris will thus struggle to credibly shake off this inflation albatross, especially given her own pandemic advocacy. Back in May 2020, as a US senator, she proposed giving most Americans and their dependants “crisis payments” of $2,000 each per month until three months after the Covid-19 emergency was over. The American Enterprise Institute estimates this would have ultimately cost $21 trillion, making Biden’s stimulus borrowing look like chump change.
This reveals what Republicans will emphasise about Harris over the coming months: her record is extremely left-wing. Bills she’s sponsored in the Senate include price controls during emergencies, rapid decarbonisation, subsidies for renters, unpopular student loan relief and a host of diversity, equity and inclusion laws, including provisions for a Climate and Environmental Equity Office.
Yes, legislative proposals are often more about signalling than actual intent. The issue is that Harris’s record signals “lefty California Democrat”, not someone with appeal to swing voters in a tight election. In her last failed presidential run, she even called for the abolition of private health insurance and supported the Green New Deal, an environmental Trojan horse for a radical plan to transform the entire US economy along progressive lines.
When voting in November, Americans will obviously consider more than just economic policy stances. What’s clear, however, is that economics will be a vulnerability for Harris, despite Trump’s own senseless protectionism and deportation promises.