Silver linings to the GOP’s midterm shortfall

Are there any silver linings to the disappointing midterm elections for Republicans? Yes, at least three: President Biden wants to run again, Donald Trump has been dethroned and the GOP cannot be blamed for the recession that looms over 2023. Put together, the results might oddly have given the GOP better odds of winning in 2024 than if the much-anticipated “red wave” had materialized.

Does this sound absurdly Pollyannish? Maybe, but it is also true.

First, Biden seems to think the midterms were a positive referendum on his performance. In his follow-up press conference, he exulted that “we lost fewer seats in the House of Representatives than any Democratic President’s first midterm election in the last 40 years.”

He rattled off his many supposed accomplishments, including: “creating” 10 million new jobs, “taking on powerful interests to lower…energy bills” and making “historic investments” to encourage building new semiconductor factories. All that “while lowering the federal deficit in the two years by $1.7 trillion….No administration has ever cut the deficit that much.”

The report card is dishonest. But give Biden credit for convincing voters that the economy was actually in tatters when he took over (it was growing at 6 percent, thanks to large stimulus spending and because it was in great shape before COVID-19 hit), that he engineered a dramatic drop in the federal deficit (actually, he pumped it way up before by law it began to recede) and that he somehow drove oil companies to lower prices, while in fact he recklessly drew down our Strategic Petroleum Reserves. 

Polling shows voters don’t believe Joe Biden, but he does and, going forward, that’s what matters. It matters because the president appears more resolved than ever to run again in 2024. In the brief (and rare) encounter with the press, he said “my intention is that I run again” but that it would ultimately be a “family decision.” He followed with: “I think everybody wants me to run, but they’re go- — we’re going to have discussions about it.”

The bad news for Democrats, and good news for Republicans, is Biden’s further comment that: “And I don’t feel any — any hurry one way or another what — to — to make that judgment today, tomorrow, whenever, no matter what the — my predecessor does.” So, Biden will drag out what should be a slam-dunk decision to step back, gumming up the opportunity for restless members of his party to throw their hats in the ring.

Exit polls show more than two-thirds of voters, including more than half of Democrats and over 70 percent of independents, do not want Biden to run in 2024. The reasons are obvious: He is showing his age in uncomfortable ways, he cannot rally his party (many successful candidates chose not to campaign with Biden in the midterms) and his approval ratings remain terrible.

Democrats may credit Biden with their party outperforming expectations in the midterms, but that will not make him a successful 2024 candidate.

Meanwhile, on the other side of the aisle, former President Trump has adopted a scorched-earth approach to anyone who dares criticize him or challenge what he evidently considers his right to run again for the Oval Office. His absurd and childish attacks on Gov. Ron DeSantis (R-Fla.) are hurting him more than they are damaging the very popular (and enormously successful) Florida governor. Millions of Republicans who admired Trump’s policies and voted for him twice are appalled. His outbursts against DeSantis, Sen. Mitch McConnell (R-Ky.), Gov. Glenn Youngkin (R-Va.), conservative media outlets like the New York Post and anyone else who does not kowtow to his ongoing claim that he won the 2020 election will eventually render him inconsequential.

Ultimately, voters want winners. Trump wasn’t on the ballot in the midterms, but he helped pick a number of candidates, many of whom – Mehmet Oz, Don Bolduc, Doug Mastriano – lost in states where they should have won. Not only did he choose candidates for the wrong reasons, including fealty to his “stolen election” claims, but he then failed to give them the financial support they desperately needed.

As many have noted, Trump is all about Trump; he does not care about the Republican Party. America needs the GOP to succeed; the GOP needs a new leader.

Finally, despite a slightly more positive read on inflation contained in the newest consumer price index report, and the chance that the Federal Reserve may back off from its aggressive rate hikes in months to come, the damage is already done. The economy is slowing, which accounts for the lessening of price hikes.  

Indications of the impending slowdown include projections that seasonal hiring for holiday workers will drop by over 30 percent, declining year-over-year gains in consumer spending, low inventories having reached targeted levels, sizable layoffs in tech and on Wall Street, rising credit card debt, contracting overseas economies, including the UK, declining small business optimism and signs that Americans may scrimp on holiday purchases.

If the economy does indeed slump into recession next year, as most economists predict, Biden cannot blame Republicans, especially if they control only one chamber of Congress. Moreover, he promised during his presser that the results of his policies will become visible next year, saying “The interesting thing is that this is all going to really come into clear view for people in the months — in the months of January, February, March of next year.”

Biden was asked, “What in the next two years do you intend to do differently to change people’s opinion of the direction of the country…? He answered, “Nothing, because they’re just finding out what we’re doing.”

Yes, voters will get a better read on Biden’s disastrous economic policies, including escalating job losses and recession, in the new year. That will not set him up well for reelection.

Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.