HomeWorldAP Interview: Biden says recession 'not inevitable'

AP Interview: Biden says recession ‘not inevitable’

By JOSH BOAK Associated Press

WASHINGTON (AP) — President Joe Biden said Thursday that the American people are “very, very depressed” after two tumultuous years with the coronavirus pandemic, volatility in the economy and now rising gasoline prices it is affecting family budgets. But he stressed that a recession was “not inevitable” and he held out hope of giving the country a greater sense of confidence.

Speaking to The Associated Press in a 30-minute Oval Office interview, the president emphasized the battered 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 plan was solely to blame for inflation hitting a 40-year high, calling that argument “strange.”

As for the American mentality in general, Biden said: “People are very, very depressed.”

“Their need for mental health in America has skyrocketed because people have seen everything altered,” Biden said. “Everything they have counted on is upsetting. But most of it is a consequence of what happened, what happened as a consequence of the COVID crisis.”

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That pessimism has carried over to the economy, as record prices at gas stations and persistent inflation have jeopardized Democrats’ ability to hold on to the House and Senate in midterm elections. Biden addressed warnings from economists that fighting inflation could push 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 beat this inflation.”

As for the causes of inflation, Biden was somewhat defensive about it. “If it’s my fault, why is inflation higher in every other major industrial country in the world? Do you wonder that? I’m not being a wise guy,” he said.

The president’s statement appeared to be about rising inflation around the world, not necessarily whether countries had higher rates than the US. Annual inflation in Japan, for example, has risen in recent months, though still it is at an annual rate of 2.4%, according to the Organization for Economic Cooperation and Development.

The president said he saw reason for optimism with the 3.6% unemployment rate and the relative strength of the United States in the world.

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

Biden’s Oval Office is filled with portraits of presidents who faced crises that endangered the country, and the president acknowledged there were parallels to his own situation. A picture of Franklin Delano Roosevelt hangs above his fireplace, prominently featured because historian Jon Meacham told Biden that no president had ever come to power 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.

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

The president said he wants to give the United States more energy, strength and courage.

“Be confident,” Biden said. “Because I am confident. We are better positioned than any other country in the world to own the second quarter of the 21st century.”

Biden’s bleak assessment of the national psyche comes as voters have resented his job performance and the direction of the country. Just 39% of American adults approve of Biden’s performance as president, according to a May poll by The Associated Press-NORC Center for Public Research, down from negative ratings the previous month.

Overall, only about 2 in 10 adults said the US is headed in the right direction or the economy is good, both down from about 3 in 10 in April. Those drops were concentrated among Democrats, with just 33% within the president’s party saying the country is headed in the right direction.

Biden said that Republican social policies were contributing to public anxiety. He suggested that Republican lawmakers could face consequences in the midterm elections if the Supreme Court overturns Roe v. Wade, possibly removing national protections for access to abortion. Voters will consider the “failure of this Republican Party to be willing” to respond to “the basic social concerns of the country,” the president said.

The president outlined some of the tough decisions he has faced, saying the US needed to stand up to Russian President Vladimir Putin for invading Ukraine in February, even though harsh sanctions imposed as a result of that war caused a spike in gasoline prices, which created a political situation. risk for Biden in an election year. He called on oil companies to think about the world’s short-term needs and increase production.

Asked why he ordered the financial sanctions against Moscow that have disrupted food and energy markets globally, Biden said he made his calculations as commander-in-chief and not as a politician thinking about elections.

“I am the president of the United States,” he said. “This is not about my political survival. It’s about what’s best for the country. Really. Really. So what happens? What happens if the strongest power, NATO, the organizational structure that we put together, turns away from Russian aggression?

Biden raised the possibility of chaos in Europe if an unfettered Russia continued to push deeper into the continent, China moved to seize Taiwan and North Korea became even more aggressive with its nuclear weapons ambitions.

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

“Don’t reward yourself,” he said.

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

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

“You could argue whether it had a marginal, minor impact on inflation,” he said. “I don’t think he did. And most economists don’t… But the idea that it caused inflation is strange.”

Still, high inflation has created a conundrum for Biden. She made it a priority to bring back millions of jobs and has seen the unemployment rate return to close to pre-pandemic levels. The Federal Reserve raised its benchmark interest rate on Wednesday, hoping to slow the economy and bring inflation down to its 2% target rate.

The Fed’s policy tightening sent financial markets tumbling and prompted many economists to warn of a possible recession next year. The president encouraged Americans to be patient.

“They shouldn’t believe a warning,” he said. “They should just say, ‘Let’s see. Let’s see which one is correct.'”

The president is still trying to steer his domestic agenda through Congress, after a previous iteration last year failed to pass 50-50 in the Senate. Biden said, “I think I have the votes” to lower prescription drug prices, lower utility bills for families with tax breaks and place a minimum 15% tax on corporations. He said his plans would cut spending for many Americans, though the measure would scale back from earlier intentions for an expanded child tax credit, universal pre-kindergarten and other programs.

“I will be able to get, God willing, the ability to pay for prescription drugs,” Biden said. “There is more than one way to reduce the cost for working people.”

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

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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