AP Interview: Biden says a recession is ‘not inevitable’ | Economic news


By JOSH BOAK, Associated Press

WASHINGTON (AP) — President Joe Biden said Thursday that the American people are “really, really depressed” after two tumultuous years with the coronavirus pandemic, a volatile economy and soaring gasoline prices making blow up family budgets. But he stressed that a recession was “not inevitable” and remained hopeful of giving the country a greater sense of confidence.

Speaking to The Associated Press in a 30-minute interview from the Oval Office, the president highlighted the struggling economy he inherited and the lingering psychological scars caused by a pandemic that has disrupted people’s sense of identity. . He bristled at claims by Republican lawmakers that last year’s COVID-19 relief package was entirely responsible for inflation hitting a 40-year high, calling the argument “bizarre.”

As for the general mood of Americans, Biden said, “People are really, really depressed.”

“The need for mental health in America, it skyrocketed, because people saw everything turned upside down,” Biden said. “Everything they counted on has been turned upside down. But most of it is the consequence of what happened, what happened as a result of the COVID crisis.”

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That pessimism spilled over into the economy as record high prices at the pumps and persistent inflation undermined Democrats’ ability to hold onto the House and Senate in midterm elections. Biden responded to warnings from economists that tackling inflation could tip the United States into recession.

“First of all, it’s not inevitable,” he said. “Second, we are in a stronger position than any nation in the world to overcome this inflation.”

As for the causes of inflation, Biden has been somewhat defensive in this regard. “If it’s my fault, why is it the case in all the other major industrialized countries in the world that inflation is higher? Are you wondering that? I am not a sage,” he said.

The president said he saw reason to be optimistic with the 3.6% unemployment rate and America’s relative strength in the world.

But so far restoring confidence has eluded Biden, whose approval ratings have been steadily declining as he has lost support from Democrats and has little evidence to show he could restore a sense of normalcy. bipartisan in Washington.

His Oval Office is filled with portraits of presidents who faced crises that imperiled the country, and Biden acknowledged there were parallels to his own situation. A picture of Franklin Delano Roosevelt hangs above his fireplace, a prominent place as historian Jon Meacham told Biden that no president came into office with the economy in such dire circumstances. There is also a painting of Abraham Lincoln, who became president with a nation brutally divided and on the brink of civil war.

Yet Biden’s remedy is not so different from the diagnosis made by former President Jimmy Carter in 1979, when the US economy was crippled by stagflation. Carter said the United States was suffering from a “crisis of confidence” and that the “erosion of our faith in the future threatens to destroy the social and political fabric of America.”

The president said he wanted to endow the United States with more verve, strength and courage.

“Be confident, because I am convinced that we are better positioned than any country in the world to own the second quarter of the 21st century,” Biden said. “That’s not hyperbole, that’s fact.”

Biden’s grim assessment of the national psyche comes as voters soured on his job performance and the direction of the country. Only 39% of American adults approve of Biden’s performance as president, according to a May poll from the Associated Press-NORC Center for Public Research, falling from already negative ratings a month earlier.

Overall, only about 2 in 10 adults said the United States is heading in the right direction or the economy is good, both down from about 3 in 10 in April. Those declines were concentrated among Democrats, with just 33% in the presidential party saying the country is heading in the right direction, down from 49% in April.

The president described some of the tough choices he faced, saying the United States must stand up to Russian President Vladimir Putin for invading Ukraine in February, even as tough sanctions imposed as a result of that war have drives up gasoline prices, creating a political crisis. risk for Biden in an election year. He called on oil companies to think about short-term global needs and increase production.

When asked why he ordered financial sanctions against Moscow that disrupted global food and energy markets, Biden said he made his calculations as commander-in-chief rather than as commander-in-chief. as a politician thinking about elections.

“I am the President of the United States,” he said. “It’s the best in the country. No kidding. No kidding. So what’s going on? What will happen if the strongest power in NATO, the organizational structure that we have put in place, moves away from Russian aggression? »

Biden created the possibility of chaos in Europe if an unfettered Russia continued to push deeper into the continent, China was encouraged to seize control of Taiwan, and North Korea grew even more aggressive with its ambitions to ‘nuclear weapons.

Biden reiterated his assertion that major oil companies have benefited from higher prices without increasing production as much as they should. He said companies need to think about the short-term world, not just their investors.

“Don’t just reward yourself,” he said.

Consumer prices jumped 8.6% over the past year, the biggest increase in more than 40 years. Republican lawmakers said Biden’s $1.9 trillion coronavirus relief package from last year sparked a spiral of price increases.

The president said there was “no evidence” for the claim, noting that other countries have suffered higher prices as economies reopened and people were vaccinated. Still, Biden acknowledged Treasury Secretary Janet Yellen’s assertion that the spending had a limited inflationary effect.

“One might wonder if this had a minor impact on inflation at the margin,” he said. “I don’t think that’s the case. And most economists don’t. But the idea that it caused inflation is bizarre.

Still, high inflation has created a conundrum for Biden. He prioritized restoring millions of jobs and saw the unemployment rate return to near pre-pandemic levels. The Federal Reserve raised its benchmark interest rate on Wednesday, hoping to slow the economy and bring inflation back to its target rate of 2%.

The Fed’s policy tightening caused financial markets to crash and led many economists to warn of a possible recession next year. The president encouraged Americans to remain patient.

“They shouldn’t believe a warning,” he said. “They should just say, ‘Let’s say, let’s see what’s correct. “”

The president is still trying to steer his national agenda through Congress, after a previous iteration last year failed to clear a 50-50 Senate. Biden said “I believe I have the votes” to lower prescription drug prices, lower family utility bills with tax incentives and impose a minimum corporate tax. He said his plans would cut spending for many Americans, though the measure is scaled back from previous intentions to expand the child tax credit, universal preschool and other programs.

“I’m going to be able to get, God willing, the ability to pay for prescription drugs,” Biden said. “There’s more than one way to cut costs for workers. Gas can cost up to $5 a gallon, but someone who has a child with stage 2 diabetes is paying up to $1,000 a gallon. dollars a month. We can cut it down to $35 a month and do it.”

And then, in recognition of the political constraints he faces, Biden added, “I can’t do everything.”

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