Here's How Inflation Became The Biggest Story Of The Midterms : The NPR Politics Podcast Trump and Biden signed off on historic amounts of stimulus money that helped the country's economy weather the pandemic, but — on top of supply chain straggles and shutdowns — that money may have come with a downside: increasing inflation. Now, as voters considered their midterm voter, rising costs are top of mind.

This episode: political correspondent Susan Davis and White House correspondent Asma Khalid.

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Here's How Inflation Became The Biggest Story Of The Midterms

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(SOUNDBITE OF THE BIGTOP ORCHESTRA'S "TEETER BOARD: FOLIES BERGERE (MARCH AND TWO-STEP)")

SUSAN DAVIS, HOST:

Hey there. It's the NPR POLITICS PODCAST. I'm Susan Davis. I cover politics.

ASMA KHALID, BYLINE: And I'm Asma Khalid. I cover the White House.

DAVIS: And we're doing something a little different on the podcast today and taking a deep dive into one of the defining issues of this election - inflation. Polls consistently show it's the top issue for most Americans. Housing, gas, food, travel - it all costs more than it did than when President Biden took office. But how voters are processing this economic reality and how they might vote because of it is complicated.

Asma, we are now days away from Election Day, but you have been talking to voters across the country for more than a year now about how inflation is impacting their lives. When did you realize that you needed to start paying attention to this issue more closely than any other?

KHALID: Well, Sue, I'll start by a bit of a personal anecdote. You probably know this. When you have a baby, you go into hibernation.

DAVIS: Yeah.

KHALID: And so I had a baby right after the election in 2020, didn't go out anywhere, reemerged in May, and it suddenly felt like life was more expensive. This was May, June of 2021. And so I went out on my first reporting trip shortly thereafter to Northampton County in Pennsylvania. You're probably familiar...

DAVIS: Sure.

KHALID: ...With this area. It's one of these really fascinating counties that went for President Obama, then for President Trump and then for President Biden. And I spent hours outside of Walmarts, Targets, just different grocery stores, talking to people. And to a T, Republicans, independents, even Democrats were enormously frustrated with how much they were spending for, you know, for anything - for chicken, for fruits, vegetables. And, one, this validated my own thinking. Like, OK; I'm not going crazy. Life actually has gotten more expensive, and data backs this up. And voters back this up as well. And I met this woman. Her name is Nazirah Lewis. She's a single mom of three, and she told me her paychecks just were no longer cutting it. Life was so, so expensive.

NAZIRAH LEWIS: Everything been going up. Everything is very expensive right now.

KHALID: What are you feeling it in?

LEWIS: The food went up.

KHALID: Like groceries?

LEWIS: Groceries went up - the gas.

(SOUNDBITE OF CAR HORN HONKING)

LEWIS: Insurance went up.

DAVIS: So couple this with your White House reporting. I mean, Washington sometimes is behind where the country actually is on issues. They can be slow to respond. At what point did the White House realize, we've got a real economic problem on our hands?

KHALID: You know, I think we've got to remember where the country was when Joe Biden literally stepped into the Oval Office, right? January, February of 2021 - the world was a different place.

(SOUNDBITE OF TV SHOW, "ABC WORLD NEWS TONIGHT WITH DAVID MUIR")

TOM LLAMAS: The coronavirus pandemic reaching more than 25 million cases here in the U.S...

KHALID: I think it was like 3% of the population, only, was vaccinated fully against COVID.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PERSON: I've been in line since 5 o'clock this morning.

KHALID: Unemployment was still high, at over 6%.

(SOUNDBITE OF TV SHOW, "NBC NIGHTLY NEWS WITH LESTER HOLT")

LESTER HOLT: ...To deliver more COVID relief to Americans who are desperately hanging on and facing questions...

KHALID: There were concerns about poverty, about hunger, about people being homeless - just being kicked out of their home with evictions.

(SOUNDBITE OF MONTAGE)

VANESSA YURKEVICH: The eviction crisis is just one of the economic disasters facing the Biden administration, including historic...

JOHN KING: It's a horrific time to become president. Saturday...

KHALID: And so inflation was not really at the forefront. It wasn't the top priority for folks. And so when Joe Biden comes into office, he immediately proposes this $1.9 trillion stimulus plan. And I will say, some alarm bells did start going off. People thought it was too much money, including Larry Summers, the very outspoken economist, who had worked in two previous Democratic administrations. He was warning that this amount of money could essentially lead to an inflation problem. The president essentially dismissed those concerns and said this money was needed to save the economy.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT JOE BIDEN: The way I see it, the biggest risk is not going too big. It's if we go too small.

DAVIS: Right. I mean, the pandemic was obviously mission critical for the Biden administration. You can't worry about the economy until you address the pandemic because they were so intertwined.

KHALID: Yeah. And it's hard - I mean, it's almost easy to forget that idea at this point.

DAVIS: Yeah. And how much panic the country was in over other issues at that time. But as the vaccines became more readily available, as life started to go back to, quote-unquote, "normal," inflation starts to take over as this new economic reality.

KHALID: It did. And it started to creep up in the spring of 2021. That was the time that I sort of started reemerging into the world, and I started going out on some reporting trips. And at that time, the White House kept insisting that this was not a long-term problem. And you heard this from President Biden, but also from a whole bunch of members of his staff, whether it was Treasury Secretary Janet Yellen or the former White House press secretary, Jen Psaki.

(SOUNDBITE OF MONTAGE)

JANET YELLEN: I expect all of this to be transitory. And I think...

BIDEN: The overwhelming consensus is it's going to bump up a little bit, and then go back down.

JEN PSAKI: Most economic analysts believe that it will have a temporary or transitory impact.

KHALID: And, Sue, we clearly know that is not exactly what happened. But...

DAVIS: Not even close.

KHALID: ...At the time, the White House insisted that this was temporary or, in their words, transitory. And I will say, what was interesting to me, Sue, is that around this time, voters were definitely frustrated by the economic situation, but I'm not convinced that they were politically hardened on what that meant.

DAVIS: Yeah.

KHALID: And the reason I mention this is there's a Republican man I met in Pennsylvania around this time. His name is Bob Bast. He votes Republican. And yet, he surprisingly did agree with some of what the White House was saying.

BOB BAST: I think it's part of the - maybe the pandemic. Industry's trying to catch up...

KHALID: Yeah.

BAST: ...To things like that. I think it will eventually somewhat sort itself out along the way.

KHALID: Just naturally, you feel like...

BAST: Yeah. Yeah, I think so.

KHALID: And, Sue, I would say that as inflation persisted, the partisan nature of how people interpreted this all really, really solidified.

DAVIS: But let's talk about politics about this for a second because I do think it's worth examining how much control President Biden or any president - but he's the president right now - has over the economy when it comes to issues like inflation. It's not like he has any singular power to do anything about the economy.

KHALID: Sue, I think it's complicated. So, you know, inflation, controlling inflation is largely in the hands of the Federal Reserve.

DAVIS: Which has raised interest rates accordingly...

KHALID: Correct - right.

DAVIS: ...Which has also had an economic impact on Americans.

KHALID: It has. It has, right? And so I would say the complicated thing for President Biden is that there was this massive stimulus plan, you know, nearly $2 trillion the Democrats passed. Not a single Republican had signed on to that bill. So now Republicans were very quickly able to point fingers and say it's actually that government spending that led to this. And, you know, I will say that that's a complicated argument in terms of who's actually right. It depends who you talk to. But certain economists like Larry Summers, who I've interviewed, says that, you know, you can strip away some of the other things that have happened. You could imagine a world in which Russia had not invaded Ukraine. But his argument is you would still have inflation because there was so much money poured into our economy.

DAVIS: It is politically convenient, I think, for Republicans to point to that spending as inflationary, which it may have had some inflationary effects on the economy, but also, let's not forget the trillions of dollars that many Republicans also did vote for during the pandemic, I mean, this was...

KHALID: Under the Trump administration.

DAVIS: Exactly. And that this money was deemed universally necessary to saving the U.S. economy from utter collapse. I mean, money was just pumped into the economy, into small businesses, into unemployment, direct stimulus checks into people's pockets - unprecedented government spending. And it's hard for me to see how that couldn't have had some inflationary aspects. But I guess it's, like, was that just a necessary evil? Was the alternative to having some inflation economic collapse? Like, pick your poison.

KHALID: I mean, that is essentially the Biden White House's argument, right? What could you do? Could you see an economy that utterly collapsed, or do you say, all right; we don't exactly know how much risk there is, but it's necessary to prevent the U.S. economy from basically just collapsing.

DAVIS: All right. Let's take a quick break, and we'll talk more about this when we get back.

And we're back. And, Asma, so let's go back now. We're in the summer of 2021. Pandemic's getting better; inflation's getting worse. How is the White House adjusting to this reality?

KHALID: Well, to begin with, the White House stops using that phrase, transitory.

DAVIS: No longer transitory.

KHALID: It is no longer transitory.

(SOUNDBITE OF ARCHIVED RECORDING)

YELLEN: I'm ready to retire the word transitory.

KHALID: And the White House, the president, his team start trying to explain why this is happening.

(SOUNDBITE OF ARCHIVED RECORDING)

BIDEN: Why is inflation? Well, government's spending money. Well, that's not the reason for the inflation.

KHALID: I would say they've shifted much more into an explanatory phase. And there's a whole bunch of explanations they give, whether it's the pandemic...

(SOUNDBITE OF ARCHIVED RECORDING)

BIDEN: The bottom of it all is COVID.

KHALID: ...Whether it's supply chains that got snarled as a result of the pandemic...

(SOUNDBITE OF ARCHIVED RECORDING)

BIDEN: The inflation has everything to do with the supply chain.

KHALID: ...Whether it's greedy corporations, right?

(SOUNDBITE OF ARCHIVED RECORDING)

BIDEN: You want to bring down inflation, let's make sure the wealthiest corporations pay their fair share.

KHALID: And then we get to February of this year, and Russia invades Ukraine. And very quickly, we see gas prices spike, and the president and his team shift to a new explanation, which is Putin's price hike.

(SOUNDBITE OF ARCHIVED RECORDING)

BIDEN: Putin's price hike is hitting America hard.

DAVIS: And do voters buy it?

KHALID: Sue, that depends, again, on which voters you talk to, which I feel like is my explanation for every one of these inflation questions (laughter), which is, well, it depends who you talk to because it really - there isn't, I think, a universal assessment of what this all means. You know, the president did release a record amount, an unprecedented amount of oil from the Strategic Petroleum Reserves. That's one of the few tools he had to do something about gas prices. You know, around this time, Sue, I went out to Michigan - a really interesting area around Lansing. It's Elissa Slotkin's district...

DAVIS: Sure.

KHALID: ... So very competitive congressional district. And I met this voter, Sue. His name is Tom Moran. He's a bus driver. He felt like it was not President Biden's fault - what was going on. And he knew about the Strategic Petroleum Reserve - a very informed voter. He felt like there were other, broader global economic factors at play.

TOM MORAN: One president can't solve the inflation problems.

KHALID: So you don't think it's his fault?

MORAN: I don't think it's his fault. I think it's a supply chain thing happened because of COVID, because oil companies cut back on production, because people weren't driving as much. The price went down for a while during COVID so...

KHALID: And that is essentially what the White House was trying to explain to people. But nearby, I met this retired concrete contractor. His name is Garfield Bowman, and he had a far more partisan view of things.

GARFIELD BOWMAN: I think they're extremely too high, and if basement Joe would have not been so stupid, he wouldn't have...

KHALID: So by this time, I noticed that partisan feelings on the economy were growing deeper. Republicans were explicitly blaming President Biden's spending, his energy policy and his leadership, what was happening, regardless of whether or not the president and his policies were, indeed, actually at fault.

DAVIS: Then you have the summer we just went through, where inflation dominated the entire conversation, really.

KHALID: I mean, it reached levels that we had not seen in my lifetime, right? You're talking about a 40-year high, and I'm saying...

DAVIS: No president likes being compared to Jimmy Carter.

KHALID: And that is right. I mean, it's - you know, during this time, I would say from the spring into the summer, we kept hearing President Biden tell Americans that it was his top priority to get inflation under control.

(SOUNDBITE OF ARCHIVED RECORDING)

BIDEN: The bottom line is this. My top priority is fighting inflation.

KHALID: But then, you know, in June, you saw inflation really reach these historic levels. And at that point - I would say, June, July, August - it has been leveling off. And the White House, in that, sees a bit of hope. But I think it is a very awkward message to sell to the public ahead of the midterms that, hey, look - ostensibly, inflation is no longer getting worse. Sure, it is still higher than it was before the pandemic, but it's evening off.

DAVIS: Is this a unique-to-the-U.S. problem? I mean, our economy is so international now. I mean, is the world seeing inflationary effects, or is the U.S. an outlier?

KHALID: The U.S. is not an outlier at all. I mean, if anything, you'll hear the White House say - and this is accurate - that inflation is a global phenomenon, and inflation rates here in the United States are, in fact, quite a bit lower than they are in some other countries. And, you know, the White House's message is that, in some ways, the United States is better able to withstand inflation because other economic data points are actually doing pretty well, right? Unemployment has dropped. Wages have risen. GDP is, you know, had grown during President Biden's first year in office. And so the White House points to all of those things and says, well, look; even if inflation is bad here, it's bad everywhere, and at least other aspects of the U.S. economy are doing pretty well.

DAVIS: OK. Let's take another break, and we'll talk more about this when we get back.

And we're back. And, Asma, we're days away from the midterm elections. Midterm elections are, especially in the first term of a president, are seen as a referendum on the White House. We should note, more than - millions of Americans have already cast their ballots. So what is Biden's closing pitch on the economy right now?

KHALID: Well, late in the summer, Sue, the president resurrected this legislative package known as the Inflation Reduction Act.

(SOUNDBITE OF ARCHIVED RECORDING)

BIDEN: ...And offered my support for a historic agreement to fight inflation and lower costs for American families.

KHALID: It is arguable whether it actually will immediately have any impact on inflation, but this is how Democrats branded it. And they have been arguing that it will help curb health care costs, help cut prescription drug costs. And now the president's message, Democrats' message, is essentially trying to spin the inflation argument on its head and say, hey; look. It's Republicans who will make inflation worse if you let them take control of Congress. And the way they're trying to argue that is by saying that the GOP intends to repeal the Inflation Reduction Act.

(SOUNDBITE OF ARCHIVED RECORDING)

BIDEN: If they take control, they said their first aim is to get rid of the Inflation Reduction Act, and inflation is going to go up, not down.

DAVIS: Look, I think that is a very hard sell to voters, and here's why. I think there is structurally some advantages that the two parties have. And I think that this country tends to trust Democrats when it comes to issues like health care, broadly speaking. And when I think you ask voters, broadly speaking, who do you trust more on the economy, consistently, voters will lean right - lean Republican on that. And in this particular climate - I mean, I've been out talking to voters, too. I just got back from Nevada - a huge-working class population in that state. I just am skeptical that people who are feeling real economic hardship are going to have much sympathy for the party in power right now when it comes to their own lives.

KHALID: And I do think it depends - we were talking to voters in the country, right? So I just got back from Georgia. I was in some fairly affluent suburbs outside of Atlanta, and I spoke to a whole bunch of voters. Early voting had already started there, and one thing I was struck by is that it does seem like Republicans, Democrats, independents are concerned broadly about the economy, but I'm not convinced it is the reason everybody is voting, right? So I met this couple in a county about an hour's drive north of Atlanta, Somesh and Mousumi Karanjee. They voted for Democrats, and, you know, frankly, there were other issues - like honesty, democracy, abortion - that mattered more to Democrats.

SOMESH KARANJEE: The economy, I don't think, has a direct relationship with politics. It's - if economy is bad here, it's globally bad. And the previous two years has been a very important factor - the COVID situation, supply chain situation - that I don't think politics has anything to do with it.

MOUSUMI KARANJEE: I mean, economy is always - like, it has its ups and downs.

KHALID: On the flipside, though, Sue, I would say, the Republicans I talk to seem to be very energized about inflation. I met this couple, Darrell and Velvet Sheets. They told me they were extremely worried about the economy. And even though there were other issues, like abortion - which the wife in particular told me she didn't really sit where the Republican Party sat - they were voting on inflation.

VELVET SHEETS: We never run out of milk, right? We always keep milk in the refrigerator. And it just seems like it just keeps getting higher and higher and higher. Eggs - same thing.

DARRELL SHEETS: Our 401(k)s are down by 25% to 35%. There's, you know, one party controlling what's going on politically. You have to assign that to somebody.

KHALID: So Sue, I mean, it kind of confirms this idea that, as inflation persisted in the country, people's partisan views of the economy crystallized only deeper. I mean, the key question I have, though, is - what happens to the very, very tiny percentage of people in the middle - which we talk about - the independents? And there are actually...

DAVIS: The elusive swing voter.

KHALID: Right.

DAVIS: Yeah.

KHALID: But they exist. I mean, they're hard to find, but I did meet some who actually were voting, you know, for a Democrat, say, in the Senate, but a Republican in the governor's race.

DAVIS: Yeah. I mean, I think that a lot of times, too - I think of these voters as the late breakers. These are the people that don't pay attention to politics as intensely as we do, and they make up their minds in the final days and weeks of the election. History would tell us that late breakers in election years like this tend to break hard for one party or the other. And that history would also indicate to us that that's not good news for Democrats right now - that they tend to break at the party that they're mad at, and the party in power tends to be the one that you're going to be more mad at if your life isn't going so well.

KHALID: That's right, Sue, and I think the one unknown, though, in that situation to me - and you've talked so much about this, Sue, in the podcast - is this idea of candidate quality.

DAVIS: Yeah.

KHALID: And that came up a lot in Georgia, specifically with the Republican, Herschel Walker, who's running for Senate there. You know, you look at what matters to independent voters. The No. 1 issue is inflation - the economy - but the No. 2 issue is abortion. And so, you know, when Democrats are saying now, in the closing days, that Republicans will make the economy worse, that isn't an argument for Democratic base voters.

DAVIS: Yeah.

KHALID: They already are going to vote on other issues, like abortion or democracy, right?

DAVIS: They're with you already, yeah.

KHALID: That is a play to get that tiny percentage of gettable voters. There may not be a ton of them, like we said. But, you know, I met this voter, Lillian Pinot. She said she was an independent. Her only Democratic vote, though, this election cycle was for the Democratic incumbent there for Senate, Raphael Warnock, in Georgia. She thought the Republican candidate, Herschel Walker, was too extreme, particularly on abortion, and she was worried about having a senator there in Georgia who's so closely tied to former president Donald Trump.

LILLIAN PINOT: I just had to say I don't want someone that is a shadow of Trump being in here with that kind of thinking or...

KHALID: Where I see the potential for Democrats here is, if candidate quality...

DAVIS: Rises above.

KHALID: ...Particularly on the issue of abortion...

DAVIS: Yeah.

KHALID: ...Rises above people's economic concerns, those are the tiny percentage of voters who are willing to vote for a Democrat.

DAVIS: All right. That's a wrap for today. This episode was written and produced by our colleague, Lexie Schapitl. Thanks so much, Lexie. Our executive producer is Muthoni Muturi. Our editors are Eric McDaniel and Krishnadev Calamur. Our producers are Casey Morell, Elena Moore and Lexie Schapitl. Thanks to Brandon Carter, Katherine Swartz and Juma Sei.

I'm Susan Davis. I cover politics.

KHALID: And I'm Asma Khalid. I cover the White House.

DAVIS: And thanks for listening to the NPR POLITICS PODCAST.

(SOUNDBITE OF THE BIGTOP ORCHESTRA'S "TEETER BOARD: FOLIES BERGERE (MARCH AND TWO-STEP)")

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