President Joe Biden goes into next year’s election with a vexing challenge: Just as the U.S. economy is getting stronger, people are still feeling horrible about it.
Pollsters and economists say there has never been as wide a gap between the underlying health of the economy and public perception. The divergence could be a decisive factor in whether the Democrat secures a second term next year. Republicans are seizing on the dissatisfaction to skewer Biden, while the White House is finding less success as it tries to highlight economic progress.
“Things are getting better and people think things are going to get worse — and that’s the most dangerous piece of this," said Democratic pollster Celinda Lake, who has worked with Biden. Lake said voters no longer want to just see inflation rates fall — rather, they want an outright decline in prices, something that last happened on a large scale during the Great Depression.
“Honestly, I’m kind of mystified by it,” she said.
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An element to this is that there are a lot of different statistics that can tell a lot of different stories depending on what bits of data you pick.
For instance, most people would probably say that the average person had less purchasing power in October of this year compared to October of 2022. They would actually be wrong, as inflation-adjusted hourly wages have actually increased slightly in that time period (by ten cents, admittedly, but the fact remains that wage growth has been outpacing inflation).
This does not mean that every person has seen a growth in purchasing power, and my loose understanding is that most of the growth has been occurring at the bottom of the labor market (which is arguably a good thing from an equity standpoint).
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I completely agree that it’s not going to win votes. I think the takeaway is that the average consumer is not a particularly rational actor (much to the chagrin of economists), and your messaging needs to address the actual source of their frustrations, which may very well be the mere fact that the numbers got higher even though their purchasing power hasn’t actually decreased.
I’d emphasize how you said that the average Americas is clearly not feeling the benefit, because I think that holds a really key part of this. Consumer sentiment does not necessarily track actual data, whether they’re high level metrics like GDP or more individual ones like inflation-adjusted wages.
I think the takeaway is that the average consumer is not a particularly rational actor (much to the chagrin of economists)
Any field of study that depends on people acting rationally should not be considered a science, nor used to drive policy decisions.
The models economics uses fail pretty much all the time so it definitely shouldn’t be considered science in the same way as physics or chemistry. If they were held to similar standards every economic ‘model’ would be tossed out after any rigorous testing (where success for the model would be accurate predictions). Instead they treat their models as ideal types and continue to base them on massive assumptions.
The popular conception of economics feels quite a bit like a religion. There’s the god of The Invisible Hand™, there’s a priesthood of economists, there’s the creation myth of barter, there’s people’s vehement insistence that they’re capitalists.
David Graeber’s books “Debt: The First 5,000 Years” and “The Dawn of Everything” do a really good job of showing different economic and political systems, and that ours isn’t some ideal end goal but one of many possible choices.
Graeber isn’t an economist and doesn’t present his books as a part of economics in any way, though. In fact he criticizes how economists have essentially made up fairy tales to explain things rather than to look at history and understand how the modern world came about in a factual manner.
Given that I find the economists roughly on par with weather forecasters, I really think we have to treat it that way. Like Climate change has thrown a huge wrench in existing weather models causing the forecasts to be much worse - I think if the models ever worked(and that’s a big if), things have sufficiently changed to break them pretty badly now.
Good thing modern macroeconomics doesn’t depend on that. People only have to be semi-rational. I. e. they may not examine all possible options in a market, just a few, and pick the best one. The results are almost the same.
It’s wrong to say that “consumers are not rational”. That implies that their choices are potentially random. We know that they’re not, because people are complaining about not having enough money. Which is rational.
It’s only rational if you accept that what they want is actually money. They don’t want money, they want a safe place to live, good food to eat, health care when they feel sick, someone to teach their kids, free time to pursue the things they love, and security that these things will be available for the rest of their lives.
The only reason they want money is because that’s how you get those things in our economic system. People don’t want money for the sake of money, at least for the most part.
No part of economics assumes that people “want money”. If that were true, there would be a lot more printed paper money in circulation.
Utility curves use prices for goods to find the maximum value of “happiness” or “satisfaction”. Rationality, in Economics, mean that people’s actions conform to their utility curves based on current prices.
Basically, if you like apples (or whatever) you should pay more for them than other goods, comparatively. That’s rational because your actions follow your preferences. Nothing to do with “liking money”.
So (excepting that the alternative is Trump for a minute) you’re thinking a rational actor should vote for the guy improving the economy for lower wage workers even if it didn’t benefit them individually?
I don’t hate that take.
I do think the formula we american kids were taught in school was more like
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Individuals vote in their selfish interests
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Selfish votes are tallied and hopefully if you average out people’s self-interested votes they elect a guy who is acting in the interests of a decent subset.
Americans don’t generally think in golden rule terms like “Whatever benefits the most workers is best for the country.”
I’d personally have to be shown evidence that a sizable portion of all these excessive (compared to manufacturing costs) profits are NOT lining the pockets of the rich before I would give out any economics gold stars.
Honestly, if people were rational actors about economics, they’d stop thinking the President can do much about how they feel about the economy. And using Gas prices as the measure is one of the most asinine things I’ve ever seen.
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And this story makes a claim that purchasing power is greater in October '23 than October '22 while omitting the 6.5% rate for '22 and the 7% rate the year prior. Inflation is down this year, but that doesn’t dig us out of hole created during the two prior years.
Whenever anyone says “the economy”, you can and should mentally substitute it with “rich people’s yacht money”.
Rich people’s yacht money doing well doesn’t do shit for 90% of the population. It doesn’t pay the rent, put food on the table or clothes on their back. They can’t afford to see a doctor or ride the damn bus.
And you want them to be happy because some stockbroker is getting a second holiday in the Maldives this year?
Stupid arrogant fucks.
That’s why they say “unemployment being too low is bad for the economy”. Low unemployment means higher negotiating power for workers, which means higher wages and better working conditions. The only way that statement makes any sense is if they’re exclusively talking about yacht money.
But the rules of supply and demand should only apply to the consumer, not the producer.
Don’t even start on the wage-inflation-spiral idea. It’s the workers’ fault for wanting higher wages as it allows service-oriented business to charge higher prices, driving inflation.
While the theory probably has roots in real-world pricing algorithms (eg how much can we charge people in X region for Netflix) that rise in cost contributes to inflation figures. The fact that wages have been stagnant for decades undermines the whole argument.
“Well the poors can afford it and the shareholders will love it!” FFS
Similarly, when they say NAIRU, you can and should mentally substitute “inexhaustible scab labour pool”.
Low unemployment means higher negotiating power for workers
Too bad all those “right to work” people have been actively fighting against negotiation powers for workers. But lets blame the ‘yacht owners’ and piss and moan about how they take advantage of the lopsided negotiation powers we voted in for them.
I know! We should put exclusively yacht owners in power! They’ll totally fix it. /s
When people say they’re not happy about the economy, this is the shit they’re talking about, not statistics.
Ordinary people get fucked in this economy, and there isn’t any party that can do anything about it.
The socialist party.
They’d like to do something about it. But they can’t get elected.
Unless there’s something else they’re planning.
'Murica had a chance in 2016 but the DNC decided “nah”.
I’ll say it an umpteenth time: good fash/bad fash afab.
Bernie would have won, and the last 8 years would have been vastly different.
Al Gore ran and would have won but republicans stole that one. It’s more complex than “DNC is icky”
My comment was in agreement.
No, if Bernie somehow won the nomination in 2016 then Hilary would have endorsed Trump to stop socialism.
Never underestimate Democrats.
Politics literally sets the rules. If you can get an elected majority you can certainly do something about it.
To fix things we would need one party to take over 153 separate branches of government.
Ezpz
What could possibly go wrong with a one-party state?
Not at all. You’re missing the forest for the trees lmao
The problem is that no matter how much inflation goes down, if the price gouging capitalists that own the grocery stores, the gas stations, and so on don’t stop.
It’s not about rich people’s yacht it’s about the American people being taken advantage of simply because they can. The economy is doing a lot better, record low unemployment for example is a huge metric here but what difference does that make when the grocery stores are selling less for more money?
You’re crying about rich people’s yachts when you should be crying about record price gouging without any cause. Those yachts don’t have impact on the average American’s QoL but price gouging absolutely does.
When investors do better, nobody else does better. The whole system is based on harvesting wealth from society as a whole, and concentrating it in the top 1%. Ever hear of the Gini coefficient?
Yes, price-gouging companies jacking up their prices and paying fuckall in wages are the direct instrument of suffering. But they do so in order to provide yacht money for the investor class, and in so doing they impoverish literally everyone else.
The uh… the yachts are payed for with price gouging my dude. 😕
Median income is up since before the pandemic, even when adjusting for inflation. The average person is better off.
“My rent is going up and food and gas are more expensive. My tooth hurts but I can’t afford to get it fixed, and now my check engine light is on.”
“ACTUALLY median income is up!”
Do you see how that’s not helping?
Gas is actually the one thing I’ve noticed that has been a lot better lately. But everything else is still expensive from the crazy greedflation every company was trying to pull when we were tolerating post-pandemic cost rises.
Gas prices are one of the few economic indicators most people are aware of, sometimes painfully. If Biden wants to turn sentiments around, lowering those more would probably be the most effective means.
Yes, Biden should pull the magic gas lever for Americans! What is he waiting for??
Health care is actually hugely underestimated, here. Health costs have been going up decade over decade and people’s health problems have been stacking up. While in the '70s and '80s people could get treatment, someone born in those years started out with the ability to get medical care but has increasingly lost access as they’ve gone through their lives.
Those people are getting older, now, and it’s getting to the point where they can’t just ignore the stuff they can’t afford. Conditions that would have been easy to treat (but often rare/expensive) are becoming chronic, fatal, or debilitating.
Life expectancy is starting to drop and while that drop is largely due to COVID (which, by itself, is an insane thing) it’s also a warning sign about what’s to come.
Prices go up every year, it’s by how much matters. For example, rent has been going up slower than inflation for a year now. For every person whose rent went up, there must be a lot of people who don’t go online to verify their rent did not go up
You’ve got numbers on the brain. Think like a human.
We’re living in some of the best economy of our lives. Was nobody here alive in 2009?
I was. The economy didn’t feel much different. Barely had anything left at the end of the month and a major expense would bankrupt me, just like today.
Except for all the people who lost their jobs back then, yeah, no different
Cost of living is outpacing it. Housing in particular.
Yeah every time I get a raise I think “finally I’ll be able to buy a house soon” then I look at the prices and see I’m still losing ground.
Wrong
Revealing article. When food prices jump 25% and rent 30%, then wages need to jump similarly to make up the difference or else people can’t afford to eat or live. But wage growth still hasn’t outpaced inflation and won’t until the end of next year. (I don’t know about anyone here but my salary certainly hasn’t caught up to inflation yet. Not even close.)
It is no wonder regular people are going hungry and think the economy is failing them. Because it has. Until more people can afford the absolute basics their perception isn’t going to change.
Definitely not true for me personally or anyone I know well enough to know their financial info. Most people I know are barely able to stay in place, with their ‘raises’ almost immediately consumed by inflation and higher rent everywhere.
They are not the median, then, but maybe in the lower half of the income which is not doing as well
Yeehaw! I don’t know anyuh them median’s neither! Any y’all met a median?
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Median by definition is not skewed by outliers. If there are 160 million workers, the 80 millionth worker is the median
the grocery stores and the rest of the capitalist pigs have yet to stop price gouging
Groceries really are the problem. I lived comfortably up until about a year ago. Now the checking account gets pretty low every couple weeks. And that’s with decent raises for me and my wife. I don’t even care about gas prices except in how they add to the cost of everything that gets shipped. Food prices are killing us.
Yeah I went from not having to really check prices when I shopped to having to be careful so I don’t accidentally spend $200/week.
A bag of ruffles, which I swear is only a tiny bit bigger than the size that used to exist between the snack size bags and the regular bags, was something like $6.75. It’s legitimately cheaper to get the gourmet kettle cooked chips.
Just stupid expensive for some things.
If “the economy” doesn’t translate to the purchasing power of our labor, then it’s a useless metric.
it’s about capitalist scum pice gouging the fuck out of people for literally everything. The economy is doing better but we don’t see it directly because we’re still being abused as if the economy hasn’t upturned
But stock market go up! You’re welcome!
“We just don’t get it, our portfolios are performing so well! I just sit here and rake in money how can the
poorspeople not love this economy!?”
Pollsters and economists say there has never been as wide a gap between the underlying health of the economy and public perception.
There’s never been as wide a gap between the rich and the working class, either. Gee, I wonder if that could have something to do with it?!
I assumed that was true. The article, however, claims
Inequality has lessened somewhat in recent years as wage growth has favored poorer workers.
Ed: even if the article is correct, the gap is still massive. And so the increased profits (due to price gouging) may make some numbers look better, I can’t help but think many households are still struggling to catch up?
Supposedly pay has increased across the board but enough to catch us up to, say, 2019 buying power? The article claims households are better off than in 2020.
The article seems to want to blame those with dim views of the economy without a satisfactory explanation of the psychology, just a bunch of guesses that, to me, don’t seem convincing. The supporting evidence seems rather cherry picked.
If food is up 25% since the pandemic, have all wages also gone up that much? Ok, ok, sure, overall cost of living probably hasn’t gone up that much. But my wages most certainly have not even come close to catching up with the current COL.
So maybe it is the middle classes, rather than lowest earners, who are feeling shafted. Maybe those in charge aren’t looking at the right statistics to understand the perceptions.
Inequality has lessened somewhat in recent years as wage growth has favored poorer workers
Also that means pretty much nothing without also looking at how much more money the richest of us have. Their wealth increases by the trillions during covid. To say that inequality is now better because some of the lowest earning workers might be making a few thousand more each year is disingenuous at best.
Never been as wide a gap between pollsters and the public.
Wages have not kept up with inflation. Why is this so hard for the media to understand?
Wages have shot up like crazy over the past few years. But the FTC has not enforced antitrust regulations over the past 30 years which led to everything being owned by megacorps with no competition - so we’re getting the screws turned on us right now. The FTC is finally engaging in some antitrust measures, but it is too little, too late. It’s kind of hard to blame that on the current regime.
Shot up like crazy is a weird way to talk about how the federal minimum wage is still $7.25
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And tipping is spreading instead of dying off.
If you are not making the federal minimum after tips, your employer is obligated to pay the difference. Nobody is (legally) receiving only $2.13/hour. $7.25 obviously isn’t enough to live on though.
E: Downvoted for speaking the truth. If you aren’t making at least $7.25 after tips, and your employer is not paying the difference, they are breaking labor laws. Please report them. And stop parroting that a $2.13 wage is somehow legal. If people are being taken advantage of, they deserve to know that they should be making more.
immigrants seeking a better wage than at home have entered the chat
Labour laws don’t apply to labour that isn’t on the books. And the US is absolutely taking advantage of that.
Abso-fucking-lutely! But if we are now talking about off-the-book labor, how relevant is that to the stagnant minimum wage?
Wage theft beats out all other forms of theft combined. To act like it can’t happen because “that’s illegal” seems pretty naive.
It’s not naive to spread awareness. I’m sure a non-zero amount of the victims aren’t aware their employers are breaking labor laws.
You’re right that I should have phrased that comment a little differently, as it clearly happens. But if you say
people should just sit back and take itemployers should be able to get away with it, I couldn’t disagree more.
Making the customers pay your employees’ directly is just lying about your prices and should be illegal.
I can’t argue with that. Also, I hope it doesn’t sound like I’m advocating for a tipping culture. I just want everyone to know that they are entitled to at least (the very low bar of) minimum wage. Any separate tipped-employee minimum wage is a myth, repeatedly claimed by abusive employers.
Ah, fair enough.
Lawl try getting them to actually do that. If you make a stink you’ll just get fired for one thing or another. There are plenty of people willing to do that job, since it takes little skill to start.
You don’t have to fight your employer directly. Go to the Department of Labor website and file a complaint online.
Then what happens?
Sorry, (raises hand) i downvoted you because i felt it had nothing to do with the matter at hand. No offense mate
No offense taken personally. I felt the same way about the $2.13 claim since, when comparing legal employers, is not possible. Of course, if we accept that some employers break the law, then the $7.25 wage isn’t very relevant anymore either.
I hope you have a pleasant day!
$15,950 per year with full time employment.
Which is why 37% of people have multiple jobs, which is why unemployment is down, which is why the wealthy/out of touch pretend the economy is fine, which is why people in power ignore the suffering of the working class.
- President George W. Bush to a divorced mother of three. Omaha, Nebraska - February 4, 2004
My wage has certainly gone up. I also can’t seem to go grocery shopping without spending $400 now. Literally everything is more expensive, bills included.
So if I look at my wage as 100%, rent and groceries and bills all take up a larger percentage of that then just five years ago.
Unless there are enforced laws around consumer pricing, every company on the planet is gonna raise prices when wages go up.
You literally use the term regime to describe yourself.
It really doesn’t help to have snooty liberal assholes telling those of us on fixed incomes that our financial situation is great because their 401k’s are appreciating and we’re just too stupid to realize how great the economy is.
The Hillary Clintonism runs strong. Bill at least pretended to give a fuck about people. The democratic pitch being “hey, at least we’re not doing a Gaza to you! Be happy with your scraps” needs a rework Stat.
Because they’re calling the stock market “the economy” instead of actually looking at the qol of the average American. It’s just more ammo for the government only cares about the rich and corps argument
No, no they aren’t, your comment is simplifying the issues here, not sure if you just don’t know what you’re talking about or what.
Things like record lows for unemployment for example, nothing to do with the stock market. There have been a lot of important wins for Americans.
with that said, the number one reason it hasn’t touched the QoL for the average American is because all of these capitalist pigs refuse to stop price gouging. That is where it hits us, the gas tank the grocery store, etc. they skyrocketed prices while shrinking sizes and all that because fuck you
Open your fucking eyes, the bigger problem is our out of control corporations
Unemployment is a bullshit number. There are a lot of ways you can be uncounted in those numbers.
Not saying I am aware of a better number, or if one even exists.
I don’t know either, but it’s absolute bullshit. As far as I know, unemployment only counts only those who are looking for work, but can’t find it. What about those unemployed, want to be employed, couldn’t find a job, and gave up?
Things like record lows for unemployment for example, nothing to do with the stock market. There have been a lot of important wins for Americans.
People are working two and three jobs to get by. And our unemployment figure doesn’t count people who have given up looking for work. Saying “unemployment is low” is not the flex you think it is.
The problem is that employment isn’t enough not that there isn’t enough employment.
You should write speeches for Biden
Just on a tangent here - I agree with everything you said except for the gas price part. Gas prices are at a 3 year low, and when you adjust for inflation we are not that far off from an all time historical low price of gas.
There are cars out there that get insanely good mpg now. 100-200 empg for EVs and even 57 mpg on a Prius. The fact that 90% of the cars on the road in the US are SUVs or trucks just shows how selfish people are. The average US driver drives 37 miles a day, at $3 a gallon & 57mpg that comes to a monthly gas expense of $58. A pretty minor expense when you compare it to rising costs at the grocery store.
“Things are getting better and people think things are going to get worse …
Because they are worse … because many people don’t have a well-paying job as a pollster … and it’s expected that the price of groceries will still rise in 2024 … and rent will still go up … and fires/droughts/storms/heatwaves will get worse … and electricity/water bills will still go up …
It always surprises me when otherwise intelligent people seem to set aside their critical thinking skills.
The problem is that lots of people think Trump will fix all of that rather than make it far worse.
He bullied the Feds into lowering the interest rates low for so long and extended the pandemic, so I content a lot of this is his fault to begin with.
Have you considered how much the green bar went up by paying you less? Please consider the poor corprate shareholders who will need to skimp on their mega yacht this year.
Not going to disagree, however, do you think adding 7 trillion dollars to the economy, avoiding any climate change action or corporate price gouging has had any effect on workers frustrations? It takes time to resolve these problems. We have been digging this hole ever since Reagan. Do we want to elect the alternative to dig faster?
If the message was “things are slowly getting better, but there’s a ways to go, and we’ll keep pushing if you elect us” it would be one thing.
But when the message is “What’s wrong with you ungrateful plebs?!” it tends to piss people off.
Of course the prices will increase. The only thing that matters is whether the wages increase faster. We’ve had inflation for over a hundred years now. Nobody should be shocked at prices going up
Wages have basically always trailed behind inflation
Stronger economy for who?
The people selling missiles to Israel
voters no longer want to just see inflation rates fall — rather, they want an outright decline in prices, something that last happened on a large scale during the Great Depression.
“Honestly, I’m kind of mystified by it,” she said.
Why the fuck would anyone be “mystified” by the fact that shit is still way more expensive than it used to be, and we’re still only getting paid what we used to be?
Fucking liberals.
The people who bought homes at 3% interest rates are doing fairly ok. The increases in Healthcare, food, and utilities really suck but are mostly manageable if your housing cost is fixed.
Until we see policy makers talking about how rent prices are outstripping any wage increases, a large portion of the population will continue to feel increasingly crushed and disenfranchised. Averages cease being useful measures when the difference between the budgeting with a fixed mortgage vs variable rent is so significant.
Fortunately, I am in the first group, but had been renting for a long time before that. A lot of people I care about are still renters or stuck living with family. Even though I’m comfortable, I can’t take anyone seriously who says this economy is healthy without addressing the millions of people struggling to make ends meet.
I really wish we’d see policy makers shift to measures of quality of life, including financial security, over raw economic metrics. Those metrics are even sometimes at odds to each other. For example, people fully owning durable homes and cars that don’t need much maintenance would increase their quality of life, but decrease measures of economic activity.
I really wish we’d see policy makers shift to measures of quality of life, including financial security, over raw economic metrics.
Companies make the same mistake all the time: They optimize for the wrong metrics and then wonder why things break.
I don’t know how anyone can call this a strong economy when 20,000 people filed for bankruptcy for medical expenses last year, and twelve million kids face food insecurity.
I agree completely. 1/5 children are food insecure in my area. 20%. That’s insane. We are a wealthy country and I’m in a major metropolitan area and yet, 20% of kids don’t know where their next meal is coming from.
Until we see policy makers talking about how rent prices are outstripping any wage increases, a large portion of the population will continue to feel increasingly crushed and disenfranchised.
Need to bring back the mustache mayoral candidate guy.
Second, Biden recently started to blame inflation on corporations that hiked prices when they saw an opportunity to improve their profits, bringing more prominence to an argument first used when gasoline prices spiked. The president’s argument is suspicious to many economists, yet the intended message to voters is that Biden is fighting for them against those he blames for fueling inflation.
“Let me be clear: Any corporation that is not passing these savings on to the consumers needs to stop their price gouging,” Biden said recently in Pueblo, Colorado. “The American people are tired of being played for suckers.”
Wow. There’s no question who’s side the reporter is on.
“Let me be clear: Any corporation that is not passing these savings on to the consumers needs to stop their price gouging,” Biden said recently in Pueblo, Colorado. “The American people are tired of being played for suckers.”
Then do something about it.
He isn’t a dictator. He needs at least another branch of government to get the most effective solutions in place.
He has been insanely effective despite having a broken Congress and brazenly corrupt Supreme Court.
If he can’t do anything but he shouldn’t be running his mouth. It just makes him look weak when he says this shit, corporations keep price gouging, and nothing happens to them. He needs to back it with force.
Why would he do anything about it if all he has to say are words, and people would still vote for him? As long as the Republicans are hard-fascists, the blue fascists can’t lose!
One party is actually running on getting rid of undesirables, the other is milquetoast supporters of regulated capitalism with no real changes in personal freedoms. It’s ridiculous to call both fascists.
Capitalism is fascism.
You help nobody but fascists with that statement. Capitalism hurts and kills yes, but in capitalism it’s a consequence as opposed to the point like it is in fascism
You don’t understand how capitalism was designed to work. Thats obvious.
Abcnews shut the fuck up. You republiQan corporate pulp mill fuckers.
“Voters feel horrible about it” fuck you.
The oligarch-owned media shouts that everything is terrible when the only thing they care about, the interest rates that impacts their cost to borrow capital, is going up because that limits their ability to run their VC Ponzi schemes. The far-left media and far-right media shout that everything is terrible all the time because they both start from wanting a revolution that tears everything down and won’t ever let reality get in the way of that being the proper solution; things must always be bad and getting worse to justify their revolution. And that’s basically of all of our media.
What far-left media??
PBS.
LOL!!
I came in here to try to explain it again and find post after post of people explaining it for me. I am so proud of you guys.
Now, somebody tell the DNC that…
Remember kids, ‘the economy’ means ‘rich people’s portfolios’.
it’s not his ‘fault’.
if you want someone, anyone, to blame, it’s the republican clowns in congress and the greedy af CEOs.
The Fed should have raised interest rates 10 years ago. Bunch of pussies.
