Economic Realities May Not Be As Dire As Current Perceptions

There's a line of thought in some media circles that says the great disconnect between what people think about the economy (it's not so great) and the economic data (we've rarely had it this good) boils down to social media brainwashing.

While such a thesis may make for interesting podcast fodder, and to be fair, social media is a self-reinforcing cesspool of nonsense, there are much bigger issues at work behind the divergence.

Ramesh Ponnuru wrote back in October that inflation is still a problem, even though the inflation rate has slowed. On that point, context matters:

Americans might be having a stronger negative reaction to today's inflation because of its context: a multiyear uptick after decades when it was, for the most part, low. Even real wage growth, then, might not be enough to diminish our displeasure from sticker shock. Inflation is falling but still high compared to our recent experience (and to the Federal Reserve's target inflation rate). So prices are high — the gap between the price level and its pre-pandemic path keeps increasing — and rising faster than normal. It might not be much comfort to consumers that the second derivative of prices is negative — which is what it means to say that inflation is falling.

Inflation, then can be two things at the same time: better than it was even a few months ago, but still much worse overall than it was before the pandemic. If Americans needed any further proof, they need look no further than their weekly grocery bills.

This may help explain why a recent Wall Street Journal poll found so many Americans think the economy is still in the tank. A Joe Biden is getting the blame:

Voters across the political spectrum single out inflation and high prices as a chief complaint about Biden's presidency, but some also are upset with his broader record on domestic and foreign policy. Many voters couldn't cite specific Biden administration policies they disliked, but instead channeled a pervasive malaise in the country that they said was difficult to pin down. Several said they were considering supporting an alternative to either party's front-runner or not voting at all.

That phrase – “a pervasive malaise” – should send shivers down the spines of Team Biden and incumbents everywhere. The reason: voters of a certain age of heard about malaise before…in 1979, with then President Jimmy Carter's “crisis of confidence” speech. Which became known as the “Carter malaise.”

America is nowhere near the same uncertain economic or political circumstances that gave rise to the “crisis of confidence.” But many people seem to feel it is…even though the data say otherwise.

It doesn't mean they are brainwashed or are the dupes of some nefarious narrative peddlers. 

What it does mean is they feel they've lost ground or, according to the Journal poll, feel Mr. Biden's policies have personally hurt them. And those feelings extend into Biden's base:

Liberal voters are angry about Biden's approach to Israel's war in Gaza, and complain that he hasn't done enough to enact the progressive policies he laid out during the 2020 campaign, including large-scale student loan forgiveness. Centrist voters want him to do more to secure the border, while left-leaning voters think his immigration policies have moved too far to the right.

Among Democrats and independents who lean that way, 45% say Biden's policies hurt them personally or had no impact on them, according to the Journal poll. Among voters overall, 53% of voters said Biden's policies hurt them, and less than a quarter—23%— said they were helped by his policies. Some 49% of voters said Trump's policies personally helped them, while just 37% said they hurt them.

None of these numbers are fatal to Biden's re-election chances. And, just as it was four years ago, Democrats are likely to have the most potent get-out-the-vote tool they've had in a generation: the specter of a Trump return to the Oval Office.

Is that enough to motivate those Democrats drifting toward a Biden malaise to shake it off and turn out again for Ol' Joe? We'll see.

It depends on whether Republicans have the good sense to offer a positive alternative. Right now? When the frontrunner is quoting Russian dictator Vladimir Putin favorably, it's a sign that the race will be much closer and more disheartening than it could be.

The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.