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The State of the Union in June 2024 - Part II

(Part II) (Con't)


I had an opportunity to spend a few hours with a friend at a café. He's independent-minded and tries to evaluate candidates based on their merits and proposals. He's not too partisan, but he claims that because the Republican party has moved further to the right (federal elections), he's currently aligned with the more progressive party. Being open-minded means, he can honestly and objectively critique both candidates for President. Because Joe Biden is currently the President, our focus in this article will be on Joe's accomplishments and challenges ahead. I appreciate his trustworthiness and impartiality – something I strive towards, too.


Me: What should Biden do, suggest an open Democratic Convention or go for it?

Chuck: I'd feel much better if Corey Booker or Gretchen Whitmer were the vice president because who knows if Biden will be mentally able to govern for the next four years. However, is Biden too loyal to Harris? He sometimes struggles with his speeches and reading teleprompters. President Biden may be in good shape, but when he shuffles his feet, that look doesn't project strength and competency.  


I'm not a fan of Kamala Harris, and I know many left-leaning individuals feel as strongly about this, if not more. My first exposure to Ms. Harris was during the first Democratic debate on June 27, 2019. It appeared because Joe Biden was the frontrunner, she called him out on the issue of race, stating that the way he described his past working relationships with two segregationist lawmakers was "hurtful." It appeared from that interaction that she "ambushed him" and it didn't come across as sincere at all.


When they first came to office, Biden tasked Harris with the Southern border issue. He may have provided guidance and support to help her with this issue. Harris is educated but not always poised, and she's an odd fit for the V.P. She's not a great public speaker and doesn't regularly project confidence in policy matters. Suppose someone in the Biden administration wanted to create some upheaval. In that case, he should appoint another minority as V.P. and make Harris the Attorney General or perhaps promise her a Supreme Court seat. She's more suited for that type of role instead of as V.P.


Now, she's been tasked with handling the abortion issue. They are foolish if they only run on the abortion controversy and Trump's dishonesty. That may not be the winning strategy – it may get them more votes but may not achieve the electoral college winning margin. Is Biden being given bad advice by his consultants and other democratic operatives?


Me: If he's too frail to run again, why doesn't his wife, Jill, convince him to drop out? How would an open convention look like in Chicago this summer?

Chuck: I am still trying to figure out the answer to this question, but taking commentary of left-leaning individuals who provide commentary on, they want him to drop out. I don't know how that would shake out. Would the newer individuals on the Democratic ticket have to be charismatic and charming to persuade enough of the electorate for support? Would Trump win in a landslide against more junior democrats on the democratic ticket? Now that Trump has been convicted of a felony it's still too close to call as MAGA supporters are the loyalists, and some argue (I'm not that foolish) that Trump will gain additional support (the only advantage, which may be temporary, is he'll increase his fundraising). Thinking out loud, replace VP Harris with a more inspiring person of color; let's say Corey Booker is a good starting point.

American Rescue Plan

Me: Some complain about higher food prices and housing, gas, and insurance costs. Is it fair to blame Biden?

Chuck: In terms of gasoline prices, the current world demand for oil is close to record highs, according to the IEA (International Energy Agency). Summer travel will increase demand, adversely affecting how much someone pays at the pump. China is also using more fuel; a 70% increase in oil demand may come from China moving forward. (I read recently that apparently OPEC doesn't control oil prices, that the oil market is controlled by supply and demand throughout the world.) To help Americans at the pump, the Biden administration will release one million barrels of gasoline from reserves. This should help reduce gas prices before the Fourth of July holiday and overall summer driving for Americans. This is temporary, depending on how you feel about dipping into our reserves. However, if car travel is extensive this summer, those reserves may have less impact on the overall price of gasoline.

I read that many homeowners are upset with the rising insurance costs. Again, it is outside of his control. Many in Florida have seen their rates triple over the last ten years. With climate change, this may be a regular occurrence, as most insurers are profit entities and will raise prices as they anticipate more severe weather events. For those who don't believe in climate change, will those individuals eventually have a change in heart as their insurance rates will continue to increase as a result of more hurricanes, wild fires and tornados (climate change)? I'm fearful that, moving forward, our weather will never be the same.


COVID-19 impacted the housing situation for several years, with very few homes being built. It is better now, but baby boomers stay longer in their homes, and you have a demand-side issue. It may take years for the supply to equal the demand. Again, these industries are outside of his control or any president. But when people are upset with rising housing, gas, and insurance costs, someone will need to be the fall guy.


Me: Are the polls correct that Biden trailed Trump in the critical battleground states?

Chuck: I don't know. I'm curious about all the polls. I'm sick of reading about them, and it's only late May. It isn't easy to tell. Who are they polling? Is there science behind their polling? Are they reaching citizens outside of landlines? If they need to contact more people than a few years ago, doesn't that delay the latest horserace? If they reject Candidate A, do follow-up questions occur? Raw numbers from the latest poll would be incredibly effective if we had more accompanying feedback to help contextualize things. Can you elaborate more about why you feel a certain way? Specifically, was it hard to decide who to support? If you hate Biden, please give me accurate examples of why they hate. Comprehensive feedback and examples are helpful and need to be integrated with actual numeric data. Now, you have my attention.

Me: How would you gauge the economic situation of our country currently?

Chuck: In early 2021, the American Rescue Plan was implemented, so roughly $2 trillion would be spent to improve the economic picture. For two years, $5 trillion was spent, and some experts (in both parties) warned all this spending would eventually cause the economy to overheat, but officials in the Biden administration did not see the same concern. It was inevitable that too much money added to the economy would eventually have adverse effects on inflation (the most significant jump in consumer prices in 40 years).


Well, we touched on the inflation issue generally, but specifically, it's been a tough grind to get it under 3%. The Fed wants to allow borrowing to become less expensive, but with inflation slightly above 3%, they will be careful about a rate cut, which may be late in the fall of '24. The cost of borrowing is much more expensive than in the last 5-10 years, but historically, interest rates are manageable, especially considering the last 50 years. Unfortunately, most consumers don't have a perspective on the history of interest rates, so anything higher than 3-4% is unacceptable.

The Fed has stated recently that there will be two interest rate cuts later in '24. One may be late summer and the other is still up for debates. This may help to ease inflation pressures and their goal of 2% inflation is still their short-term objective.

Some of the electorate may need to realize that we are exporting more oil than ever. With geopolitical events throughout the world, crude oil prices can be volatile. Russia is exporting less crude oil than Saudi Arabia. As I mentioned earlier, the markets control oil prices internationally, so it's questionable that the Biden administration should blame them for high gas prices. With a busy summer travel schedule planned for Americans, that demand may help to push up the price paid at the pump.


Recently, the Biden administration canceled student debt for 160,000 more people. It was one of his campaign promises to seek relief for young borrowers who attempted to improve their financial situation by achieving an advanced degree. So far, the number of Americans who have benefited from Biden's commitment is 4.75 million. Indeed, it's a controversial issue as many are upset that students get a hall pass with this issue. I don't condone debt relief but the way this program was structured never was in the best interest of students. I understand those students who never incurred debt saying this is an unfair program. I get it. The only other thing I'll say is that the Biden administration estimates that 90% of the debt relief would go to those people making under $75,000 a year.

The stock market has performed well, but only half of the U.S. population invests there, so it would be insincere to say all Americans have benefited from the recent gains.


Wages have increased over the last few years but may not have kept pace with inflation. For several years, food items such as milk, eggs, and chicken saw significant increases, although that seems to have leveled off. Regardless, people still feel "squeezed" by the amount of inflation that has occurred since 2021.


The Inflation Reduction Act, which Democrats pushed through Congress in '22, makes ten drugs subject to price negotiations in Medicare. According to the Congressional Budget Office, the program is expected to save Medicare $98.5 billion over ten years. However, the negotiated prices take effect in 2026, although the drug industry has filed multiple lawsuits to derail the effort.


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