The political cost of inflation: A lesson from the US election
The Straits Times|November 11, 2024
Higher prices for basic foodstuff like eggs tend to linger in voters' minds. The Biden-Harris administration is not the only government to be punished for it at election time.
Linda Lim
The political cost of inflation: A lesson from the US election

As an economist living in Michigan, an electoral "swing state" in the United States, I have been asked by many Singaporeans what role the economy played in Donald Trump's victory - and what lies ahead.

From the perspective of economists, the US economy has been called "the envy of the world", enjoying robust gross domestic product growth, strong job creation, unemployment at near-record lows, wages rising faster than moderating inflation, a booming stock market, and world-leading technological innovation and productivity growth.

Despite this, in the run-up to the recent presidential election, voters have consistently said the economy is "bad". A majority of those citing this as their main concern voted for Trump.

This is because "ordinary people" are much more upset by rising prices (inflation) than they are mollified by rising real wages. Prices may be rising more slowly now, but they are in absolute terms much higher than they were four years ago, when President Joe Biden took office with Ms Kamala Harris as Vice-President.

WHAT'S BEHIND RISING PRICES Unlike economists, most voters may not understand that the president - much less the vice-president - has very limited control over the economy. The recent inflation, a global phenomenon, was the result of "exogenous shocks" pandemic-induced snarls in global supply chains, post-pandemic pent-up demand surges - all that "revenge" shopping, dining and travel - and the rise in food, energy and commodity prices stoked by the war in Ukraine. Aggressive fiscal stimulus contributed to the surge in prices. But it was begun under then-President Trump, and continued by President Biden, with bipartisan support in the US Congress. And it is also responsible for the strong growth and job creation that have accompanied rising prices - the three usually go together, reflecting strong demand.

Esta historia es de la edición November 11, 2024 de The Straits Times.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

Esta historia es de la edición November 11, 2024 de The Straits Times.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

MÁS HISTORIAS DE THE STRAITS TIMESVer todo
K-pop star Psy's home temporarily seized due to penalty arrears
The Straits Times

K-pop star Psy's home temporarily seized due to penalty arrears

Singer Psy recently had his luxury home in Seoul temporarily seized by the authorities after he failed to pay an administrative penalty imposed by the district office, local media outlets reported on Nov 25.

time-read
1 min  |
November 28, 2024
BTS' Jimin and Jung Kook face off at Billboard Music Awards
The Straits Times

BTS' Jimin and Jung Kook face off at Billboard Music Awards

K-pop supergroup BTS members Jimin and Jung Kook will face off at the upcoming Billboard Music Awards (BBMAs), which will take place on Dec 12.

time-read
3 minutos  |
November 28, 2024
Stefanie Sun fails to nab Taipei Arena for 2025 world tour
The Straits Times

Stefanie Sun fails to nab Taipei Arena for 2025 world tour

It has been a decade since homegrown Mandopop star Stefanie Sun last headlined her own tour, so when her upcoming world tour Aut Nihilo Sun Yanzi In Concert was announced recently, fans went into a frenzy.

time-read
2 minutos  |
November 28, 2024
Society is sick': Actor Ryan Lian after netizens laugh at him for being attacked
The Straits Times

Society is sick': Actor Ryan Lian after netizens laugh at him for being attacked

Local actor Ryan Lian has hit back at netizens who were unkind to him after learning that he was injured in a recent knife attack.

time-read
1 min  |
November 28, 2024
The Straits Times

Binge-worthy K-variety series is a celebration of tenacity and sisterhood

Iron Girls follows the trials and triumphs of four award-winning South Korean actresses who signed up for the toughest roles of their lives – participants of the 2024 World Triathlon Cup in Tongyeong.

time-read
2 minutos  |
November 28, 2024
Problemista's whimsy is wearying, Blitz a conventional WWII drama
The Straits Times

Problemista's whimsy is wearying, Blitz a conventional WWII drama

Alejandro (Julio Torres) from El Salvador is an aspiring toy designer in New York City. With time running out on his American work visa, he becomes personal assistant to an erratic art critic (Tilda Swinton) as his only hope for a sponsored residency.

time-read
2 minutos  |
November 28, 2024
Moana 2 charts familiar waters, but stays buoyant
The Straits Times

Moana 2 charts familiar waters, but stays buoyant

Disney's second voyage with Moana dives deeper into Pacific culture

time-read
2 minutos  |
November 28, 2024
Shrek director tackles animation taboo in Netflix fairy tale Spellbound
The Straits Times

Shrek director tackles animation taboo in Netflix fairy tale Spellbound

Animated films tackling parent separation and divorce are few and far between.

time-read
2 minutos  |
November 28, 2024
New head hopes to offer alternative to 'junk food'
The Straits Times

New head hopes to offer alternative to 'junk food'

General manager of SGIFF Jeremy Chua courts young viewers and social media

time-read
4 minutos  |
November 28, 2024
Music kings take back their crowns
The Straits Times

Music kings take back their crowns

Must-see MV: G-Dragon – 2024 Mama performance medley

time-read
2 minutos  |
November 28, 2024