This week: The Briefing, Volume 10, issue 42
Biden’s inflation problem keeps getting worseHobbs continues to hide from debateHerschel Walker is still very much in it
Outlook
Inflation: Last week’s announcement of 8.2% inflation is bad for Joe Biden in more than one way.
First of all, the rise in prices is obviously putting pressure on working families, who are most likely to belong to the swing demographics in this election — a test of whether working-class white voters stick with Trump’s party, and whether and Hispanic voters go over to it.
The people most affected by inflation are those who rent instead of owning their homes, those who deal in cash a lot or live hand to mouth, and those who spend a significant proportion of their income on food, clothing, and shelter. For these people, inflation is not an abstraction — it is the reality they face when they go to the grocery store and beef has been marked up beyond what they can reasonably afford.
Their anger may decide this election. Both CPI inflation and core inflation are at or near 40-year records, meaning that gasoline, food, and everything else has been getting significantly more expensive each month. The recent resurgence of gas prices alone might be enough to sink Democrats, but combine that with everything else. For many Democratic candidates in competitive races, the rise in prices across the board is going to be too much for them to handle or cover up.
Recessionary fears: Persistent inflation creates another, longer-lasting political problem for Biden and Democrats, which may take until after the election to rear its head. It means that the Federal Reserve Bank has no choice but to keep raising interest rates — perhaps to raise them higher and faster than it would otherwise. And this deliberate destruction of demand, designed to wring inflation out of the economy, is going to cause some serious pain as borrowing becomes more difficult and more expensive for individuals and businesses.
In short, it means that the one part of the current recession that large numbers of people haven’t had to feel yet — that is, job-loss and job-insecurity — may be coming soon for a lot of people.
Meanwhile, given the higher interest rates, It will be increasingly difficult for homeowners to cash out equity. Home values will drop as a result of rising interest rates. Recall in 2009 and 2010, when underwater homeowners found themselves less mobile when the time came to pick up and look for a better local job market. That could happen again.
And although home values will probably moderate, the high interest rates will still make it very difficult for a lot of people to afford mortgages.
The job losses may not come in significant enough numbers or quickly enough to harm Biden’s party in next month’s election. But just as the inflation problem continues to haunt him through election day, the potential for a big recession will haunt his presidency afterward.
Governor 2022
Arizona: Secretary of State Katie Hobbs (D) continues to hide from her Republican opponent, refusing to debate, even though she is in one of the closest gubernatorial races in the country and in fact trails in most recent polls. It is an almost inexplicable decision on her part and one that will surely be revisited with a critical eye once the election is over.
Former news anchor Kari Lake (R) is increasingly aggressive, calling her a “coward” for it, and it is hard to argue. Lake is running what looks like a spectacular and disciplined campaign down the stretch, avoiding the sort of bizarre statements that plagued her earlier on. Republicans have not had much success in Arizona over the last five years, so a Lake win would be an amazing boost for the state party.
Lake’s campaign, win or lose, is a true master class in how to put Donald Trump’s most useful personality characteristics into action without actually being Trump. She is forceful and assertive, and seemingly always capable of putting her opponents into their place.
Meanwhile, an attempt by teachers unions to veto the state’s new school choice law by referendum was thwarted last month when they failed to gather the requisite number of signatures. Leftists’ failure to get that on the ballot could become a factor in overall voter turnout in Republicans’ favor. At this point, we narrowly favor Lake to win and keep the governorship in Republican hands, against the wishes of the current Republican incumbent. Leaning Republican retention.
Georgia: The fact that Herschel Walker’s Senate campaign has not collapsed as feared under the weight of recent allegations is also good news for Gov. Brian Kemp (R), who remains the favorite against election denier Stacey Abrams. Barring any last minute shenanigans, he should be able to avoid a runoff despite being massively outspent. Likely Republican retention.
House 2022
Next week, we will take a look at some of the most competitive House races in the country. In the meantime, however, It should be noted that every likely voter poll of the congressional generic ballot shows Republicans taking the lead. (For some reason, both Fox News and Politico have refused to move to a likely voter screen for their surveys even at this late date.) The RealClear average shows a 3-point surge for the GOP in the last week or two, to the party’s highest rating since February. This comes in tandem with a slight drop for Democrats, so it’s not just a case of the numbers chasing each other upward as pollsters push more undecided voters to take a position.
This generic ballot number, along with redistricting results, surveys and anecdotes from individual House races, points to a Republican majority once the dust clears. The big questions right now are how large that majority will be, and how deep into Democratic territory on the new state congressional maps Republicans can go.
Senate 2022
As of this writing, our overall Senate predictions still point to a one-seat net pickup by Republicans and a GOP Senate majority.
Arizona: Blake Masters (R) hasn’t turned the corner yet in his race against Sen. Mark Kelly (D), but he will have the resources to finish as strongly as he can. The same polling that shows Kari Lake taking the lead is showing that he has closed the race to within five points. This one is a map-expander, as Republicans did not have big expectations for Masters. Still, he performed well enough in the debate to show that he is a serious candidate. Kelly is rightly running scared and running hard, even though he remains the favorite.
You will know that Democrats are having a terrible night on Nov. 8 if It takes longer to call the winner in this race then it does in the governor’s race. And obviously, it will be a terrible night for Democrats if Kelly comes up short — that will almost guarantee a Republican takeover of the Senate. Leaning Democratic retention.
Georgia: Herschel Walker (R) performed relatively well in last week’s debate against Sen. Raphael Warnock (D). Between his own consistent denials of the October surprise allegation that he paid for an abortion, and the dirt that Republicans in the state have simultaneously put out on Warnock regarding domestic violence, tax avoidance, and corruption, Walker has already outperformed our expectations and might even survive a very nasty oppo research dump. This race looks increasingly likely to go to a runoff. Warnock’s chances remain slightly better than Walker’s. Leaning Democratic retention.
Wisconsin: Sen. Ron Johnson (R) always closes strong — as we have noted previously, he has outperformed all the polls on Election Day every time he has run. But this time, he seems to be clinching the race much sooner than in his last two races. He was supposed to lose in 2010, and there was a lot of doubt in 2016, when his early victory call presaged Trump carrying the Badger State.
Johnson’s six-point lead in the latest Marquette law school poll may be the biggest polling lead of his entire career, let alone in this race. Lt. Gov. Mandela Barnes is not an especially strong candidate at a moment when his pet causes, especially the defunding of the police, are under brutal rhetorical assault and getting terrible results in real life. Leaning Republican retention.