Pessimism about the course of public policies and leadership’s quality, weak economy, socio-political divisions, unstable alliances and multiple hybrid war precipices are unusually challenging issues to tackle while seeking the country’s highest office.

Public opinion surveys show that an overwhelming majority (about 75%) of Americans believe the country is on a wrong track, the president’s approval rating is at 42%, and sinking down to mid-30s when it comes to managing the economy.

That is a particularly serious problem, because the outlook for jobs and incomes is always the decisive factor in election decisions.

The evidence, however, does not support this negative view of the economy. Driven by a sharp rebound of private consumption, government spending and net exports, the GDP in the first quarter grew 1.8%, double the annual gain in the last three months of 2022.

The U.S. economic growth is also underpinned by a strong recovery of real disposable personal incomes -- +2.9% in the first quarter from the same period of last year – a stable unemployment rate at historically low levels (3.6% in June), and a near-certainty that credit tightening has peaked out as a result of a slowing inflation, measured by the core market-based PCE (personal consumption expenditure) index of 4.5% in May.

Unleashing energy supplies is a good move

The policy interest rate – aka the federal funds rate – should now be kept at its current level of 5.08% for several reasons. First, one must see the evidence of the lagged impact of interest rate increases from 0% to 5.08% since the beginning of last year. Second, the real federal funds rate (i.e., the nominal rate minus inflation rate) is now 0.5%. That means that there is no need to keep raising the policy rate as long as inflation remains relatively stable. Third, further interest rate hikes would increase the odds of a significant growth recession – and that would be a socially and politically unwelcome event during an election year.

Polls ending July 10, 2023, show Biden and Trump running even (at 42%). The big difference is that Trump is the Republican Party’s front runner for next year’s elections, while 71% of respondents in a recent poll, which also included Democrats, thought that Biden (80) was too old to seek a second term of office.

The election landscape would radically change if, for whatever reason, Biden were unable to run. There would be plenty of Democratic Party’s hopefuls to fill the void, but odds of Trump’s second coming would increase considerably.

In the realm of foreign policy, the key options could also change regardless of the ultimate choice of party’s standard bearers.

With China, Democrats now want to calm things down until the elections are over. One can see that in Washington’s frantic search for communication channels with China to prevent and manage the crises brewing in the South China Sea and on the Korean Peninsula.

The talking forums are sought not to offer any new and more conciliatory policies. No, they should be there to keep things in order -- ostensibly to avoid errors, miscalculations and “accidental” military clashes during the election period.

More introspection would be another good move

The Chinese understand that. And Washington also knows that Beijing is eager to restore “normal” trade relations with the U.S., without import tariffs, sanctions, discriminatory export regimes and what they call “suppressions” of Chinese firms on American and world markets.

It’s very unlikely that China will extract any of those concessions.

With regard to Russia, the contacts are in place to prevent a direct military confrontation with NATO in Ukraine and beyond. Ceasefires and peace talks are out of the question. At the moment, Russia is grinding down Ukrainian forces, but it’s not clear what Washington will do when Moscow moves into a devastatingly offensive mode.

On a trade front, that leaves a soaring Russia-China trade (+40.6% in the first half of this year) and a closer economic, political and security integration of a vast central and east Asia regions, including Iran and India.

The U.S. has lost Russia. And trade numbers are showing that Washington’s decoupling with China is very much under way.

Prodded by the U.S., the Europeans have been very active in severing ties with Russia. Some of them are now having second thoughts about that, but -- with America’s huge economic and military support -- the E.U.’s eastern front is still holding up.

Things are different with China. The European trading bloc wants to pursue its €856.3 ($960) billion business, while sheepishly muttering, to placate the U.S., about “de-risking,” or excessive dependence on China for trade and investments.

It's time for the U.S. to think again about its lonely, destructive and very costly political and military crusades. The country’s phenomenal material and intellectual resources should be used to improve living standards, consolidate the society, invest more in science and education and show the world that shining “City upon a Hill.”