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.
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.
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.
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.
