Economy

Opinion: The U.S. economy is riding high. So why is Joe Biden heading for election defeat? – The Globe and Mail

Published

6 months ago

March 12, 2024

There used to be a solid relationship between the state of the economy and a U.S. president’s popularity. The occupant of the White House got much of the credit for good times and much of the blame for bad times.

Not any more.

President Joe Biden came into office in early 2021 with an approval rating of more than 53 per cent, according to a running tally of polls compiled by the website 538. The honeymoon was brief. By the summer of 2022, his approval rating was 37.9 per cent.

And as the U.S. economy roared back from the pandemic, Mr. Biden’s own numbers barely budged. Today, the U.S. unemployment rate is just 3.9 per cent. There’s been widespread wage growth. Inflation had been wrestled down to 3.1 per cent as of January, with no recession. And Mr. Biden’s approval rating is stuck at 38 per cent.

Past U.S. presidents have had periods of low poll numbers but – with the exception of Donald Trump – almost never when the economy was doing well.

In early 1983, for example, Ronald Reagan’s approval rating was lower than Mr. Biden’s is today. But unemployment was at almost 11 per cent. And when the economy recovered, so did Mr. Reagan’s popularity. In the 1984 election, his Morning in America campaign won 49 of 50 states.

Mr. Biden’s approval rating is even below that of his predecessor. Four years ago this week, Mr. Trump’s score was four points higher.

What gives?

One theory is that we’re living in a world post-truth age. There’s no actual recession, just a vibe-cession. The economy may not be objectively awful, but people still feel awful.

The Michigan Consumer Sentiment Index reached its lowest level in history not in the depths of the pandemic, or the blackest days of the 2008 financial crisis, but in the summer of 2022. The index has risen since, but it’s still barely higher than it was in April, 2020 – when the unemployment rate was nearly 15 per cent.

A second issue bedevilling Mr. Biden’s popularity may be housing prices. As in Canada, though to a lesser extent, prices and rents in most U.S. markets are up since the start of the pandemic. The real estate site Zillow estimates that asking rates for rent have risen 30 per cent, and the share of median household income needed for rent has gone to 29 per cent from 27.3 per cent.

For homeowners with no plans to move, this may be a non-issue. But for millions of other Americans, their inflation rate doesn’t just feel higher than the consumer price index. It may be objectively higher.

A third explanation for what’s hurting Mr. Biden is related to the first: U.S. politics has become so polarized that one part of the electorate – Republicans – simply doesn’t believe good news associated with the other side.

You can get a taste of that in a recent New York Times/Siena poll. Among those surveyed, 51 per cent say that their personal financial situation is excellent or good – but only 26 per cent say the same about U.S. economic conditions. Just 17 per cent say their financial situation is poor, but 51 per cent say that overall economic conditions are poor.

Among voters who identify as Democrats, 27 per cent say that economic conditions are poor. But the figure among Republicans is 72 per cent.

Independent voters – the key to election victory – are vibing more in tune with Republicans. Fifty-two per cent of independents say the economy is poor, and 67 per cent say the economy is worse than four years ago.

Which brings me to the final explanation for what’s dogging Mr. Biden and the Democrats: cultural estrangement.

Or to rework Bill Clinton’s famous election slogan: Maybe it’s not the economy, stupid.

Democrats were once the party of the working class, while Republicans captured highly educated white voters. The parties have since flipped.

Mr. Biden, whose political identity was formed in that earlier era, still wants to be the president of blue-collar America. Unlike much of his party, his impulses are pre-woke. And his policies are focused on the working class – everything from subsidies for manufacturing to a campaign budget that promises higher taxes on business and the wealthy to pay for such things as better health-insurance subsidies, a poverty-reducing benefit for families modelled on a successful Trudeau government program, and a middle-class tax cut.

But blue-collar voters increasingly see the Democrats as the party of educated progressives. In the Times/Siena poll, Mr. Trump is 33 percentage points ahead of Mr. Biden among white voters without a college degree. Mr. Biden remains ahead among non-white voters without a degree, but by a mere six points.

The poll also has Mr. Trump winning the Hispanic vote, a group Democrats used to think of as immutably in their camp.

Mr. Biden gave an energetic State of the Union speech, but much of the electorate is having trouble hearing what he’s saying. He’s coming across like the Charlie Brown teacher’s talking trombone sound. His economic message is being drowned out by his own party’s cultural noise. More on that in my next column.

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Business

A timeline of events in the bread price-fixing scandal

Published

1 day ago

September 19, 2024

Anne Joseph

Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

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Economy

S&P/TSX composite up more than 250 points, U.S. stock markets also higher

Published

1 day ago

September 19, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

Published

2 days ago

September 18, 2024

Anne Joseph

VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

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