Yahoo Finance Senior Columnist Rick Newman describes the president's Bidenomics policies as "a flop" on the energy side of things, while also detailing how US consumers feel about the direction of inflation and recession risks.
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SEANA SMITH: And Rick, When you see what's playing out right now, gas prices and the price of food, obviously, Americans still feeling a lot of pain on both fronts, even though we have seen gas prices come down quite a bit.
RICK NEWMAN: I think the verdict is in. Bidenomics is a flop. The country is just completely unhappy. Everybody is and a foul mood. I mean, confidence levels are basically at recessionary levels. And I think something that we figured out about the American psyche is that Americans don't feel better when prices go up and then come down a little bit. They're not saying, oh, thank goodness, something cost 4% less than it did last year.
I think there's this psychological thing where people think the right price for something is the lowest that they ever paid. And then if it's higher than that, everything's terrible. So you know, gas prices got down to basically $2 a gallon during the COVID pandemic in 2020. I mean, that's when demand fell off a cliff, but they were in the twos for much of the Trump administration.
In the Biden presidency, they've been in the threes and, of course, in the fours in 2022. And people just think that's too high. I mean, so you know, gasoline prices are down by a lot. They're around $3.35 I think right now. I think that's actually fine because people don't spend as much on gasoline as they think. It's only like 3% of the typical household budget. But it's these psychological factors. And the country's just and a foul mood. Sorry about that.
JARED BLIKRE: Don't apologize at all. We're now less than a year away from the election and kind of a big deal there. We talk about presidential cycles and the stock market. But just in general, what kind of jawboning and what kind of maneuvers might we see that are purely political over the next year?
RICK NEWMAN: You cannot jawbone American consumers into thinking that they are better off than they want to feel. You just can't do this. Obama learned this lesson during the his first midterm election when Democrats got pummeled. And Obama kept saying, look at this great recovery we've had from the recession. And Americans are like, hey, things still stink. And there was a huge wipeout for Democrats that year.
So Biden has a couple of things going his way. Inflation is coming down. So that trend seems likely to continue. We're going to find out if we're going to have a recession in 2024. I mean, for what it's worth, one year ago, many economists were just sure we were going to have a recession in 2023. We didn't. So recession odds seem lower. So things are going Biden's way. But people have to feel it. They have to feel it in their budgets. And it's just not going to matter that the President tells them they should feel better.