Americans' Disconnect From Economic Reality

Think back to this time of year in 2020.  The nation was going into lockdown, businesses were closing and millions of Americans were losing their jobs through layoffs and business closings.  Meanwhile, schools were moving to only remote learning and simple things like toilet paper, paper towels and Lysol wipes and similar disinfectants were difficult to find for purchase.  As the Covid-19 pandemic continued, there were more than a million excess deaths in America, a number increased in part by right wing resistance to wearing masks and getting vaccinated once vaccines became available, and mobile morgues sprung up in large cities. The economy was in free fall to say the least.  Yet much of the public, especially Republicans and MAGA cultists seemingly have forgotten this nightmarish reality and whine that the economy was better under the Trump regime despite all the data indicating otherwise and confirming that the economy today is doing rather well.  The only thing that has truly changed today, besides a flourishing economy overall, is that the Biden administration supports democracy and equality for all Americans, black, white, Christian, non-Christian, gay or straight, while the Trump regime openly pushed a white, right wing Christian agenda that sought to normalize white Christian supremacy while rolling back the rights of the rest of the nation. How does one overcome such deliberate amnesia?   A column in the New York Times looks at the maddening phenomenon.  Here are highlights:

Are you better off today than you were four years ago? Honestly, I didn’t think Republicans were going to try replaying Ronald Reagan’s famous line, since so much of the G.O.P.’s 2024 strategy depends on a sort of collective amnesia about the last year of Donald Trump’s presidency. Is it really a good idea to remind voters what the spring of 2020 was like?

For it was a terrible time: It was a time of fear, with Covid deaths skyrocketing. It was a time of isolation, with normal social interactions disrupted. It was a time of surging violent crime, perhaps brought on by that social disruption. It was a time of huge job losses, with the unemployment rate hitting 14.8 percent that April. And do you remember the great toilet paper shortage?

Also, when Reagan delivered that line in 1980, things were pretty bad, with 7.5 percent unemployment and 12.6 percent inflation, and the 1979 gas lines were still fresh in memory. Today, unemployment is below 4 percent and inflation is around 3 percent (and probably, despite some noisy recent statistics, still heading down).

Some observers, however, tell us to ignore fancy statistics indicating that America is doing pretty well. Americans’ lived experience, they say, is that it’s still a lousy economy. And isn’t the customer — or in this case the consumer — always right?

It’s true that most Americans have a negative view of the economy. But people don’t directly experience the economy. What they directly experience are their own financial circumstances — and most Americans are feeling relatively positive about their own finances.

Before I get into the numbers, let’s talk about what we’re capturing when we measure consumer sentiment, either in opinion polls or in regular surveys . . . . these surveys don’t ask about consumers’ personal experiences; they ask for their views about the economy overall — that is, what they think is happening to other people.

So what happens if you do ask about personal experience?

I’ve been struck by the results of swing-state polls being conducted by Quinnipiac University, which ask respondents about both the national economy and their personal financial situations. In the latest poll, of Michigan voters, only 35 percent of people said that the national economy was excellent or good, while 65 percent said it was not so good or bad. But when asked about their personal finances the proportions were basically reversed, with 61 percent saying that they were in excellent or good shape and 38 percent saying they were in not so good or bad shape.

A January poll of Pennsylvania voters produced almost the same results.

It’s not just Quinnipiac. Other evidence points to a similar disconnect between perceptions of the economy and what people see in their own lives. For example, a September Harris Poll conducted for The Guardian found a narrow majority of Americans saying that unemployment was near a 50-year high when, in fact, it’s near a 50-year low . . . . and the University of Michigan asks consumers to compare their personal financial situation now with that of five years ago: In January, 52 percent said it was better and 38 percent said it was worse.

To the extent we can measure Americans’ personal experiences, as opposed to what they say about the economy, it seems to be quite positive and more or less in line with the macroeconomic indicators.

There may be multiple reasons for this disconnect between personal experience and narratives. Partisanship is clearly a major factor: Supporters of both parties tend to be down on the economy when the opposing party holds the White House, but the effect is much stronger for Republicans.

And for what it’s worth, news reporting on the economy, as measured by the San Francisco Federal Reserve, was extraordinarily negative last summer, comparable to the depths of the Great Recession, although it has been more positive recently.

Whatever has been going on, it’s important to understand that the political challenge facing Democrats is not that they have to overcome a bad economy. What they need to overcome instead is the false narrative that the economy is doing badly.

How can they do this? . . . . . reminding them just how bad 2020 was and arguing that President Biden, who inherited an economy and a society badly damaged by the pandemic and has led us through the aftermath to a much better place, just might work.