BERKELEY – The outcome of the US presidential election next year, like most before it, will almost certainly turn on domestic economic conditions, or, more precisely, on perceptions of economic conditions. And recent polling suggests that the disconnect between perception and reality may be President Joe Biden's biggest problem.

US President Joe Biden and his team get little credit for their management of the American economy. Aware that the 2024 presidential election, like most, will turn on economic conditions, or perceptions of economic conditions, the president has taken to the hustings, repeating his mantra that "Bidenomics is working." But while Bidenomics may be working, the message is not. A CBS/YouGov poll conducted between July 26 and 28 gave Biden just a 34% approval rating on the economy.

The explanation for this negative impression is straightforward: inflation. People rightly perceive inflation as a tax on their incomes. When unemployment is low and they succeed in finding work, they attribute their good fortune to diligence and individual initiative, not to their government's management of the economy. But when they confront higher prices at the grocery store or filling station, they regard that – not unreasonably – as someone else's fault.

The question, of course, is whose. And that question is complicated by the fact that America's recent bout of inflation had multiple causes. This doesn't let the Biden administration off the hook. Its American Rescue Plan, the $1.9 trillion stimulus package announced on January 20, 2021, the president's first day in office, provided vigorous support for spending.

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Barry Eichengreen, Professor of Economics and Political Science at the University of California, Berkeley, is a former senior policy adviser at the International Monetary Fund. He is the author of many books, including In Defense of Public Debt (Oxford University Press, 2021).