Greg Ip asks again today: Why are Americans so sour about the economy? He acknowledges that it's all very odd, with unemployment low and inflation dropping. He concludes that the only solution to the mystery is "referred pain." That is, people feel bad about the world and they're taking that out on the economy.
But I'll make a pitch once again for a simpler answer: It's Republicans who are sour about the economy, not Americans in general. Here is Republican economic sentiment over the past few years:
Republican optimism about the economy plummeted starting precisely when Joe Biden won the 2020 election—that's before Ukraine, before inflation, before the American Rescue Plan, before COVID vaccines—and has stayed in the basement ever since, regardless of anything else happening in the world.
This did not happen among Democrats or Independents. Indies stayed the same throughout the election period and then dropped a bit when inflation started to bite. Democrats got more optimistic after Biden's inauguration and then fluctuated depending on conditions.
Only Republicans showed this pattern: a steep drop immediately upon Biden's election and virtually no change since then. All they care about is the fact that Joe Biden is in the White House. Fox News has been saying since Election Day—and ever since—that Biden will wreck the economy, and Republicans believe it regardless of what their own eyes and ears tell them.
Very true. They bitch about inflation everyday. They can’t seem to figure nothing is really going up the last 6 months. It’s like they expect thst when inflation cools it will mean deflation. Morons. All of them.
It truly amazes me to hear all the complaining about gas prices.
"Only Republicans showed this pattern: .."
The graph should include the other groups too.
+1
You know they're purposely being disingenuous because 2021 was a pretty damn good year for the economy (GDP, stock market, jobs,etc.).
Yeah and next GOP president will flip it the other way. I know because when I remind some libs the economy under Trump was basically fine I am regularly treated to unhinged rants.
"CNN said in September 2020 that annual average GDP growth was 4.1% under Democratic US Presidents and 2.5% under Republican US Presidents. The New York Times said in February 2021 that since 1933, annual average GDP growth was 4.6% under Democratic US Presidents and 2.4% under Republican US Presidents."
Wiki https://simple.wikipedia.org/wiki/U.S._economic_performance_under_Democratic_and_Republican_presidents#:~:text=CNN%20said%20in%20September%202020,2.4%25%20under%20Republican%20US%20Presidents.
I wish Kevin had posted the numbers for Democrats and Independents in the Trump years (or the Biden years) but as I recall it's not an exact mirror of Kevin's chart above. I think "some liberals" is not the same as practically 100% of Republicans. I had this exact same conversation with my Trump supporting friend. When I agreed that many of the signs of economic health were positive in the first 3 years of his Presidency but also suggested that some of the positive trends were inherited from the previous administration he went ballistic in denial. Nope it's all Trump. So, no, I don't think this is a good comparison. Once again "both sides" distorts clear understanding .
Ignoring the elephant in the room that is Covid....
The economy was fine under Trump--he was riding on Obama's work. He didn't get to blow it up as much as he'd like and the deficits he created wouldn't come home to roost for a while.
Adam Strange had a good post on Kevin's Blog back in October (22nd), and I'll re-post it here:
"In 2008, Larry Beinhart wrote, "The raw truth is that the economy has grown faster when taxes were higher, but how can we explain that phenomenon? "
You can find his explanation here: https://www.alternet.org/amp/why_the_economy_grows_like_crazy_amid_high_taxes-2647193811
I run a small business, and Beinhart's explanation is spot-on as it applies to me. I live it every day."
A brief summary of the explanation is that under low tax environments, business owners do not invest in their businesses to grow them, but take money out while the taking is good. Writ large, that leads to funds buying up viable companies and strip them of assets to take as much money out as quickly as possible. They get rich and the economy suffers. But this will take time to kick in and show up is the data.
Involution is why Americans are gloomy about their prospects for equality from the economy.
I had to look up involution. And I think you are correct. Each group has it's own reasons, but they are all looking inward. This is the exact opposite of our beliefs and actions when the nation was formed and spread across the continent. Maybe it's just natural course of things. I hope not.
Polls are useless now. People lie. All the time. Especially in surveys.
Concur. They SAY they're pessimistic because (1) they want the pollster to hear it and (2) it's a mark of tribal loyalty.
Pre Covid, Trump economy, there was a huge partisan divide on the economy. I don't think this is just a Biden and the GOP thing....
Can you give us a citation ? My recollection is that the partisan divide is less extreme from the Dem. side of the field.
Kevin has shown this in the past:
https://jabberwocking.com/republican-hysteria-over-the-economy-has-reached-record-levels/
They just want to have a parade. We should give them one! An annual Republican Day parade where can we can all line the streets and cheer about all the good things Republicans have done for our country and all humanity.
It would be invigorating, and it would make them happy and contented as a bed of clams.
I for one will volunteer to hand out large quantities of rotten produce along the parade route. I feel it's the least I could do.
I don't know, anecdotally there are people across the spectrum who aren't happy about the economy, especially given how unbalanced growth has been.
Stock market flat or down...so not so great for 401K's.
High housing pricing makes it hard for kids starting out.
There are many reasons for current generally high housing prices. One is higher (but not historically high) interest rates per the Fed using the only effective tool there is in controlling the COVID related and worldwide inflation increase (which worked). Another is higher building material costs also caused by COVID pandemic dislocations and well down from their peak. The rest of the reasons have little to do with the federal government unless you count long term historical support for highways instead of mass transit, minimal federal fuel taxes that are half what they were because of inflation over decades etc.
Not sure what is meant by 'unbalanced growth', but what we have seen since 2019 (pre-covid) is that the middle and lower class has seen stronger growth in wealth, jobs and wages when compared to wealthier groups.
This is perhaps unbalanced, but it is historically unusual for the unbalance to go in this direction.
This type of unbalanced growth shouldnt be responsible for large numbers of people being upset about the economy and its the reason why a solid majority feel that their personal economic situation is improving. Its how they view everyone else that is hard to explain.
Polarization didn't start with Biden. Here is the University of Michigan Index of Consumer Expectation, by party:
https://www.skeptometrics.org/ConsumerExpect.png
The split started getting bad in the Obama administration, then got really ridiculous in the Trump administration. Democrats are also polarized, but not as much. The overall pessimism is not explained by the net party difference. Probably pessimism is more contagious than optimism.
"Republicans believe it regardless of what their own eyes and ears tell them"
Do their own eyes and ears actually tell them anything ? Or is it all down to Fox et al, and if they aren't told by Murdoch, then it just hasn't happened.
That's it. Fox News and the rest propaganda, and remembering how it cost half as much to fill the 36 gallon tank on their $60K truck back in the Golden Age of Trump - when no one was driving anywhere because of COVID.
I'm still waiting for the economic collapse Bob Dole predicted from Clinton's tax bill.
I'm sure it will be along any day now.