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WAUSAU, Wis. — The reminder, every time they drive down the street, of how high gasoline prices are. The delays in home construction and renovation because of supply-chain disruptions. The hike in the cost of a summertime respite at the lake. The ripple effects of a 5.4% increase in the price of dairy items on a state whose economy depends in large measure on that sector of the economy. To say nothing of the cost of groceries.
You think things are tough for the Democrats right now? That’s nothing. Wait till Tuesday.
Then things will really get bad. Think of it as the Republicans’ silent front-porch campaign, their most effective in decades.
Here’s why: On Tuesday — or maybe Wednesday in rural areas — Americans will go to their front porches. They will fish in their mailboxes and extract the daily post, which will include their 401(k) retirement-savings statements. The contents of those envelopes will be — metaphorically, of course, but stunningly — thinner.
This fall’s midterm congressional elections will be about many things. The Supreme Court last month thrust abortion rights to the front ranks of next month’s party primaries here and of November’s general election nationwide; nearly three-fifths of Wisconsin voters believe abortion should be legal in virtually every case, according to the respected Marquette University Law School Poll, which released its survey two days before the high court overturned Roe v. Wade late last month. Republicans this summer are choosing between construction executive Tim Michels, who has the endorsement of Donald Trump, and former Lt. Gov. Rebecca Kleefisch for the party’s gubernatorial nomination. The state’s voters will determine the future of GOP Sen. Ron Johnson, who has questioned the legitimacy of Joe Biden’s presidency.
But here, as elsewhere, it’s the economy.
The Dow Jones Industrial Average has lost an eighth of its value so far this year. A study conducted 14 years ago by the right-leaning Badger Institute found that more than four-fifths of Wisconsinites were invested in the stock market through stocks, mutual funds and retirement implements, a figure that has only grown since then. That means not only the retirement outlook but also the financial well-being of Wisconsin families have been hit, and hard.
The combination of eroded savings and investment portfolios and inflation is a body blow to the Democrats, who already faced a difficult environment in this year’s midterms — and it signals real jeopardy for Biden, whose advanced age gives him especially sharp perspective on the peril presidents face in such circumstances.
The president knows gasoline prices and inflation are dangerous for an incumbent president. He went to Washington, D.C., in 1973, during the early energy crisis. In his first decade on Capitol Hill, he watched inflation soar and saw Gerald R. Ford struggle with it. He witnessed how it led to the presidency of Jimmy Carter, which in turn also fell victim to inflation and to a presidential candidate, former Gov. Ronald Reagan, who knew the answer when he asked the famous question in his 1980 debate with Carter: “Are you better off today than you were four years ago?”
That is a question Biden will face if he seeks reelection.
Almost exactly a year ago this week, he confronted the prospect that inflation might flare and said — perhaps hopefully, perhaps reflecting the information his economic advisers had provided him — that the price increases “are expected to be temporary.”
They usually aren’t. And they usually inject a sense of inevitability into the public. It certainly did the last time inflation became a national preoccupation.
“There was a feeling there was nothing we regular Americans could do about it the last time around,” Gary Hart of Colorado, who entered the Senate in 1973, when inflation averaged 6.16%, recalled in a telephone conversation the other day. “We felt helplessness as prices rose.”
A baby boomer memory is a millennium conundrum. “No one under 60 has experienced anything like this in their adult life,” Michael J. Boskin, chairman of the Council of Economic Advisers in the George H.W. Bush administration, wrote of inflation late last month. “Worse, the odds of a recession are growing.”
All the indicators signal trouble for the Democrats on the economy. Nearly three-fifths of Americans now think that rising prices are a crisis, not just a problem. That’s up from 49% in a late April 2022 Quinnipiac Poll. A University of Michigan consumer sentiment study reached its lowest level since it began surveying in 1952, with four-fifths of Americans expressing pessimism about the economy. A study by Civic Science found that more than 9 of 10 American adults are at least somewhat concerned about inflation — and that nearly two-thirds are saying they are “very concerned.” Two-fifths believe the Biden administration is the biggest cause of this distress.
Of all the crises battering the Democrats, inflation may be the most dangerous. The Republicans won’t have to reach far for their evidence. It’s in a Bureau of Labor Statistics report, and it makes for sobering reading:
Fuel oil up 10.7% year to year. Gasoline up 48.7%. Groceries up 11.9%. Housing up 5.5%. Retail sales were down in May for the first time this year. In all, inflation is up 8.6% nationally year over year. In the Midwest region that includes Wisconsin, the figure is 8%, with prices in the energy sector here growing by 13.2% in May alone.
“Inflation isn’t just about rising prices — it’s about rising anxiety,” says Christine Whelan, director of the Money, Relationships and Equality Initiative at the University of Wisconsin. “Inflation, and the Fed’s response to combat it, will compound our uncertainties about the future.”
The public-opinion specialists Seymour Martin Lipset and William Schneider learned this while examining how inflation, which in 1960 was at a mere 1.4%, jumped to 13.3% in a two-decade period. The effect of that rise was staggering. “A high rate of inflation,” they wrote, “appears to lower the public expectations of the future in all respects: for their own lives, for the country as a whole, or the economy.”
So rising gas prices mean folks here are driving on cruise control at 50 mph to save a few cents on gas during the morning commute. “Looking for a steak for your summer barbecue?” Whelan asks. “Hold on to your wallet.”