The economy is great. Why are Americans blaming Biden?

The economy is doing remarkably well, though the Biden administration can’t shout about it for fear of seeming out of touch. Consumer price index inflation over 12 months rose to 9% in June 2022, up from 3.5% recently. Mr. The unemployment rate, which was 6.3% when Biden took office, has now been at or below 4% for 22 consecutive months. Job creation is still running above the rate needed to absorb labor force growth. Consumers are spending like crazy.

Yet the public is gagging about the economy — and they’re blaming Mr. Biden. On one level, this isn’t too surprising. When the economy is doing well, Americans give the president more credit than he deserves; When it performs poorly, they place more blame on him. The question is: why is it time to blame rather than debts?

Part of the answer is obvious. First, there are always setbacks in perception. People’s assessment of the economy is lagging, and inflation has been rising for a long time. Second, many Americans are feeling irritated about their country these days, and some of that irritation is rubbing off on the economy.

Third, you often hear that not everyone is doing well in this economy. That is true. But it is always true. Even in an exciting boom, some have sadly lagged behind. America has huge disparities. One might wish it wasn’t so, and in my view we should help the unfortunate more. But in a population of more than 330 million, some will always struggle.

Another part of the answer is that low inflation is not enough for many. Instead, they seem to want the prices of things like petrol and groceries to go back to where they were.

There’s a big difference between deflation, which we have, and inflation, which we don’t. Inflation is the rate at which average prices rise. When the Federal Reserve lowers the inflation rate to its 2% target, it will mark a major victory. But prices will not return to their old levels. They will still rise, albeit slowly.

Here’s the problem. While some prices—such as gasoline and food—go up and down a lot in a modern economy, most prices only go up. When these prices rise rapidly, as happened in 2022, there is high inflation. While they will rise more slowly, inflation will be lower than normal before the pandemic. But the aggregate price level, which is the average of all prices in the economy, almost never falls.

I almost said no. In fact, the price level fell during the Great Depression, and briefly during the Pandemic Depression. It takes a really sick economy to cause deflation.

Contrast this with the central bank’s efforts to engineer a soft landing. That means reducing inflation, not the price level, a mild recession or preferably nothing. Chairman Jerome Powell and his fellow central bankers never intended to cut rates — and they haven’t. They know how bad things have to get to create deflation.

The problem is that many people don’t do it. They yearn for the low prices they remember. But they didn’t think about the severe recession or depression that would be necessary to get back there.

What’s a bad policymaker to do? For a central bank whose decision-makers don’t stand for election, the answer is simple: strive for a soft landing, not deflation. It will make most people better off and the economy happier. Besides, this is the central bank’s legal mandate: to achieve low inflation and high employment.

It is not so easy for the President and others who have to stand for election in a year. The hard truth is that the president and Congress can’t do much to lower prices — other than using strategic petroleum reserves to lower oil prices and lowering drug prices. A deep recession might do the trick, but no one wants that.

Mr. Blinder is a professor of economics and public affairs at Princeton and a fellow at the Peterson Institute for International Economics. He served as Vice Chairman of the Federal Reserve from 1994-96.