Ben Roback is Vice President of Public Affairs at Sard Verbinnen & Co.

The political strategist James Carville is by no means a household name, but the phrase he coined has become gospel in political campaigning. “The economy, stupid!” became a central pillar in Bill Clinton’s 1992 presidential campaign.

The unique economic context laid the groundwork for Clinton’s execution of Carville’s strategy. The recession of the early 1990s was gripping much of the western world and threatened not just their economies. Unemployment in Finland surpassed 20 per cent, riots spread across the United Kingdom, and in Canada forced Brian Mulroney’s resignation as Prime Minister.

As the debate around the state of the American economy rages, these are all consequences Joe Biden is desperate to avoid.

The opportunity to take credit for rebuilding the US economy following the pandemic is arguably the President’s greatest political strength when it comes to his (presumed) re-election campaign. But inflationary concerns, labour market shortages, and long-term supply chain problems could equally be not just his downfall, but also his party’s.

A pre-Thanksgiving speech last week gave an insight into the most pressing economic concerns at the top of Biden’s list.

First, inflation. Workers’ wages are up 4.9 per cent year on year, clear cause for celebration in the White House and around kitchen tables across the United States. But that only tells half the story. Wage growth has been offset by a meteoric increase in the cost of living: 6.2 per cent in the last year. The one figure published by the US Bureau of Labor Statistics that should worry the White House more than any other is 1.2 per cent, the amount by which average hourly earnings have decreased from October last year to this when inflation is taken into account.

There is not much that Biden and Donald Trump agree on, but one is placing faith in Jerome Powell to run the Federal Reserve. Last week, Biden nominated Powell for a second term as Chair of the Fed, a remit that includes financial regulation and managing inflation.

The decision was the latest example of progressive Democrats falling out with the White House. The left of the Party had lobbied for the appointment of Lael Brainard instead, citing Powell’s apparent weakness on climate change policy, income inequality, and banking power. Powell is, given his incumbency, the safe choice, but progressives in the Senate have threatened to oppose his nomination during the senate confirmation process, which must take place before February 2022.

Powell’s task is monumental, but he needs a disunited Democratic Party to come together if he is to even have the opportunity to carry it out.

Second, supply chains. Chronic supply chain issues have become one of the most critical political backlogs that the White House is desperate to clear, and fast. Ongoing supply-chain problems have helped contribute to inflation reaching its highest level in 30 years, erasing wage gains and denting consumer confidence.

The sight of shipping containers piled high on docksides awaiting processing has become depressingly familiar the world over. The United States is no exception, where ports like Los Angeles have become symbolic of the gummed-up system that threatens the supply of familiar Christmas favourites as the holiday season nears.

The Port Authority of LA has gone as far as threatening to fine businesses who do not process containers quickly enough, but that negates the wider supply chain shortages like insufficient truck driver numbers, lingering shipping delays caused by the Ever Given grounding in the Suez Canal, and perpetual COVID concerns.

The White House acknowledges the severity of the subject. Supply chain issues are complex in their very nature, making the problem a difficult one to solve, let alone explain to voters. This week, the President called in CEOs of major retailers and grocers to discuss these supply chain concerns amidst the customary frenzied period of shopping between Thanksgiving and Christmas. A snappily titled speech on ‘The economy, supply chains and lowering costs for the American people’ is expected later this week.

Biden has sought a delicate balance between optimism and caution thus far. At the roundtable, he said that Americans have “a little more hope” about the holidays compared to last year, which was about as confidence-building as Boris Johnson saying this Christmas will be “considerably better” than last year. The measure for comparison could hardly be lower.

It is not commonplace for the White House to have to reassure the American people that they will be able to buy Christmas presents and put food on the table. But White House press secretary Jen Psaki told reporters this week that “throughout the holidays, products will be on shelves and consumers will be able to purchase what they want and need.” ‘There is no need to panic buy’ usually prompts panic buying.

Soaring demand, supply chain delays, labour market deficiencies, shortages in key materials and logistics essentials like wood pallets – it is a vicious cycle that could limit consumer choice this holiday season and the American public will look for a political scapegoat. As George Bush found out to his chagrin, and Clinton to his benefit, under such circumstances the sitting president is usually in their sights.