Last week we received another fantastic report Work (39 consecutive months of job growth) and almost nobody seems to notice. In particular, it is unclear whether the gospel will affect the more widespread but false narrative President Joe Biden Presides over a poor economy.
Let's start with the facts: Job creation under the Biden administration has been truly astounding, especially when you remember those optimistic but wrong recession predictions. Four years ago, the economy was hit by the Covid-19 pandemic, but we are more than recovering. Four years after the 2007-2009 recession, total employment is still down by more than 5 million; Now it has increased to almost 6 million. The unemployment rate has been below 4% for 26 months, the longest streak since the 1960s.
Inflation has picked up in 2021-22, although this increase has moderated considerably. But most workers' incomes have increased in real terms. Over the past four years, wages for unsupervised workers, who make up more than 80% of private employment, have risen by about 24%, while consumer prices have risen by less than 20%.
So why do so many Americans continue to tell pollsters that the economy is in bad shape?
For the most part, anyone who argues that we are in a “Vibration”, in which public opinion is at odds with economic reality, out of touch with people's real-life experience, and labeled elitist. If you look closely at the data, there is a whole range of opinions that show that the economy is really bad.
But that comment is an attempt to explain something that didn't happen. Undoubtedly, there are Americans who suffer financially; Unfortunately, this will always be true to some degree, especially given the weakness of America's social safety net. But overall, Americans are relatively confident about their own finances.
I recently wrote about a pair of Quinnipiac swing state polls that asked registered voters about the economy and their personal finances. In both Michigan and Pennsylvania (states critical to the outcome of this year's presidential election), more than 60% of respondents rated the economy as very good or bad; A similar percentage said their own situation was excellent or good.
Americans are optimistic not only about their own circumstances; They are also optimistic about their local economy. A recent Wall Street Journal poll of swing state voters found that voters have negative views of the national economy but significantly more positive views of their state's economy. This is consistent with the Federal Reserve's report on economic well-being for 2022 (released in 2023), which showed that a much larger percentage of Americans rated their local economy as good or better than the same percentage who said the national economy.
Basically, Americans are saying, “I'm fine, the people I know are fine, but bad things are happening somewhere.” As the Journal's Greg Ip wrote: “When it comes to economics, emotions are at war with facts.”
What explains this disconnect? Inflation certainly contributes to bad feelings about the economy. New research by Harvard University's Stephanie Stancheva confirms an old idea: When both wages and prices rise, people believe they've earned a raise, but inflation has robbed them of their hard work.
However, hatred of inflation does not explain why people think their state is doing well, but the nation is a disaster.
The elephant in the room — and it's mainly an elephant, though a bit of a donkey — is discrimination. Today, Americans' views on the economy are determined more by political connections than the other way around.
This is true for both parties, but statistical analysis shows that the partisan effect on economic views is strongest for Republicans, who have been negative about the economy for much of the past year, as in the 2008 financial crisis. Any discussion of economic sentiments that does not take this factor into account misses a large part of the picture.
It is not difficult to see where this asymmetry comes from. Republican politicians and the media have united in trashing Biden's economy, which Donald Trump says is “collapsing into ruins” with “out-of-stock stores,” which is not true. Democrats, on the other hand, are divided, with some progressives disparaging the economy because they fear acknowledging the gospel will undermine the case for strengthening that fragile social safety net.
In my opinion, more progressives should celebrate the current economy, not only to help re-elect Biden, but economic success demonstrates a progressive vision. I will say that Biden deserves some credit for the good news, but the most important thing is that policies like the Obamacare expansion and student loan relief, contrary to conservative predictions, did not drag down the economy, which is okay to call. Further
The reality is that the American economy is a remarkable success story. Don't let anyone tell you it isn't.
