Jul 29, 2022 - Podcasts

Biden vs. the bad vibes economy

The latest GDP numbers out yesterday showed a slowdown in the U.S. economy for the second quarter in a row, pushing a lot of pundits and some news outlets to declare that the U.S. is in a recession. But Fed chair Jerome Powell, President Biden and many economists say that’s not the case.

  • Plus: Kids in California can wake up later for school this year.
  • And: the new trend of edible utensils.

Guests: Axios' Neil Irwin, Hans Nichols and Jennifer Kingson.

Credits: Axios Today is produced by Niala Boodhoo, Emily Peck, Sara Kehaulani Goo, Alexandra Botti, Nuria Marquez Martinez, Lydia McMullen-Laird, Alex Sugiura, and Ben O'Brien. Music is composed by Evan Viola. You can reach us at [email protected]. You can text questions, comments and story ideas to Niala as a text or voice memo to 202-918-4893.

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EMILY: Good morning! Welcome to Axios Today.

It’s Friday, July 29th.

I’m Emily Peck, in for Niala Boodhoo.

Here’s what we’re watching today: Kids in California can wake up a bit later for school this year and other states are following suit. Plus: a new trend: edible utensils. Really.

But first, Biden vs. the bad vibes economy is today’s One Big Thing.

EMILY: The latest GDP numbers out yesterday showed a slowdown in the US economy for the second quarter in a row, pushing a lot of pundits and some news outlets to declare that the US is in a recession. But fed chair Jerome Powell, President Biden, and many economists say that's not the case. Axios chief economic correspondent, Neil Irwin, and political reporter, Hans Nichols. Join us now to break this down for us.

Neil, let's ignore the word recession, what do these GDP numbers tell us about the economy?

NEIL IRWIN: Look, there's clearly a slowdown happening, uh, at a bare minimum we're seeing negative numbers on housing, we're seeing negative numbers on a lot of business investment spending and consumer spending isn't growing the way it was. So even if we weren't having this debate, is it a recession is it not, it would be unquestionable that the US economy slowed down during the spring. The question is how far will it slow, how painful will that be?

EMILY: Hans, let's talk about the politics here. I mean, this has been the debate that Biden has not been able to avoid. What is he juggling here? I know there's some saying in politics, maybe that dates back to the eighties, like if you're explaining you're losing.

HANS NICHOLS: You can ding the White House for trying to get in front of the argument and argue that we're not technically in a recession in a lot of ways, they didn't have a choice. The bigger issue is how Americans feel. And Americans don't feel great about their economic prospects, their current economic reality. And there's not a lot of presidential rhetoric that can change that. And if the president tries too hard, pushes it too far in talking about how rosy the economy is, when Americans aren't feeling that warm, fuzzy, cuddly economy, they have a credibility problem.

NEIL: I think that's exactly right. And fundamentally the story here is inflation's 9%. Most people are not getting raises anything close to that. Most people are having a worse standard of living, seeing their real income decline. And as long as that's true, there's no spin for that, right? This is not a communications problem. It's a reality problem.

EMILY: Hans in a piece you wrote for Axios, you mentioned presidents can't really do much to solve the economy but they can set a tone. Can Biden set the tone, has he set a tone?

HANS: Presidents can generally set the country in a direction, right. But there's only, and all presidents struggle with this and Biden is no different. They get to the oval office and they realize they have limited powers. They have limited levers. And I think there's no place that's maybe more manifest where they find their limitations when they're trying to contain and deal with monetary policy. It's too harsh and it's too strong to say that Biden's a bystander to sort of the macroeconomic trends, but in some sense like a lot of the big decisions that were made, they're in the past. And there's not a lot he can do aside from the China tariff stuff, that the previous president, President Trump imposed on China. And so there's this big debate inside the white house that they haven't solved on how many of those tariffs to remove so you can lower the cost of things like bicycles or underwear. Again, that's on the margins. You're talking about, you know, maybe 0.2 percentage points. The big question on how quickly or slowly inflation's gonna come down is up to the Federal Reserve and whether or not I hate to say this, but whether or not we enter into a recession.

EMILY: Neil, you asked Jerome Powell this question at a press conference this week. He said, we're not, does his assessment matter for public perception?

NEIL: I don't think so. I think what Chair J. Powell was saying at this press conference was very much the conventional wisdom of professional economists, which is that as of right now, we've had strong enough job growth, enough good things happening in the economy that this is not technically a recession yet. Uh, the question I asked and the question he answered was, do you believe we are currently in a recession? That's not the same thing as do you think we will be in a few months. Um, nobody's quite sure where this goes in a few months, but right now the, the jobs numbers and other, uh, numbers have been too strong. What matters is how Americans feel, how they're able to earn an income, live their daily lives, not have kind of soul-crushing inflation that saos away their paychecks. Until that changes, I think that the vibes, whatever we wanna call it, are still gonna be bad and the communications is a second order issue.

HANS: The White House did have a pretty good vibey week in terms of politics and policy though, right? They got two major legislative victories across the line. They got this semiconductor chips bill, which Mitch McConnell was holding hostage and that's 280 billion that will allow members and Senators and lawmakers to talk about it. And it looks like they're gonna get a big climate tax and deficit reduction package that finally Joe Manchin has come on board. So if you were to ask the White House, would they take this week again, even with that negative print from on GDP, they would absolutely take this week. They liked the way the week ended and they liked their position heading into August.

Axios’ Hans Nichols and Neil Irwin – thanks so much.

NEIL: Thanks, Emily.

HANS: Thanks for having me.

EMILY: In a moment: the push for later school start times.

EMILY: Welcome back to Axios Today. I'm Emily Peck in for Niala Boodhoo. This school year California kids could start getting more sleep. That's because of a new law requiring schools to start later: high schools know earlier than 8:30 AM and middle schools know earlier than 8:00. Now, other states are looking to put similar laws in place after years of intense debate over this issue. We asked you what you think about school start times here are Harish and Michelle from New York State, which is considering similar legislation to California.

HARISH YERRAMSETTY: I'm a high school science teacher. Our high school starts at 9:00 am and has been doing so for many years now. And, uh, the students really enjoy it. So I think this is a good direction.

MICHELLE QUACKENBUSH: I know it will impact after school practice for drama or sports. And then if families have children in the lower grade levels as well, they will find themselves with some commute concerns.

EMILY: Axios’ Jennifer Kingson has been reporting on school start times. Hey, Jennifer.

JENNIFER: Hey Emily.

EMILY: First. Why do some people want schools to start later?

JENNIFER: Pediatricians and others view this as an important public health issue. It's not just the fact that teens like to sleep late. It's actually a biological imperative. Uh, this is reflected in academic performance. All kinds of areas when school starts later, kids do better. They're more awake and alert and healthier. This is settled science, but it is nonetheless controversial for a whole host of reasons.

EMILY: Yeah, let's talk about the other side of the argument. What are the reasons people don't want kids to go to school later? Are they just grumpy grinches?

JENNIFER: No, from the political perspective, school boards say that they should be able to control when kids go to school, not states. On the practical level, there's the matter of bus routes to consider. Bus drivers have certain hours, school boards often say it will cost too much to change those roots and change their patterns. When schedules change, not only do students wind up staying later, so do teachers who don't want their hours extended. There are also the working schedules of parents to consider.

EMILY: It seems like the energy moved on this issue in the pandemic as a lot of parents were home working remotely. Did this change the perception of this issue or give it any new momentum?

JENNIFER Absolutely. You're totally right. In a lot of communities, the pandemic shifted us to later start times to begin with and people started thinking, “well, given the mental health pressure that we've all been under, from the pandemic, why don't we give our kids a break and make this a permanent thing?”

EMILY: Okay, so Jennifer, I'm gonna do a total 180 here to end today and ask you about one fun thing from a totally different piece of reporting you did this week. Edible utensils is a new trend?

JENNIFER: Yes. A whole spate of new eco companies are making products like strawberry flavored straws, black pepper spoons that you pair with macaroni and cheese, even plates and bowls made out of wheat brand. This is so you don't use single-use plastics and throw them away anymore.

EMILY: Jennifer Kingson is chief correspondent for the Axios. What's Next newsletter. Thanks Jennifer.

JENNIFER: Thanks Emily. Now eat your vegetables and eat your plate.

EMILY: And that’s all for this week!

Axios Today is produced by Nuria Marquez Martinez and Lydia McMullen-Laird. Our sound engineer is Alex Sugiura. Alexandra Botti is our supervising producer. Sara Kehaulani Goo is Axios’ editor in chief. And special thanks Axios co-founder Mike Allen.

I’m Emily Peck, in for Niala Boodhoo. Erica Pandey is with you Monday – but you can keep up with me by subscribing to the daily Axios Markets newsletter.

Thanks for being with us, stay safe, and have a great weekend.

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