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December 15, 2023 11:27 AM UTC

It's the Economy, Stupid...and It's Pretty Darn Good

  • 14 Comments
  • by: Colorado Pols

If you haven’t seen the business headlines lately, the U.S. economy is so bad that the stock market hit a record high this week.

Twice.

As Reuters reports:

U.S. stocks ended firmer on Thursday, with the Dow Jones Industrial Average notching its second straight record high close, lifted by optimism that borrowing rates will decrease next year following a dovish pivot by the Federal Reserve…[Pols emphasis]

…The Fed left interest rates unchanged on Wednesday, as expected, with Chair Jerome Powell saying the historic tightening of monetary policy was likely over, as inflation falls faster than expected, and discussions on cuts in borrowing costs were coming “into view.”

As CNBC reported this week, the U.S. economy is so terrible that people are feeling better about it:

Two new surveys released in recent days suggest consumers may be starting to feel more optimistic about inflation.

This could be welcome news for President Joe Biden, whose 2024 reelection campaign is battling a stubborn economic gloom tied directly to high consumer prices.

The New York Federal Reserve’s November consumer survey, released Monday, found that consumers expect inflation will be 3.4% over the coming year. That’s a drop of 0.2 percentage points from what consumers predicted in October, and the lowest expected level of inflation the survey has seen since April 2021. 

A separate survey from the University of Michigan released Thursday recorded an even sharper shift in consumer confidence.

Year-ahead inflation expectation fell by around 30% in a single month, a remarkable turn. [Pols emphasis]

And here’s “Fortune” from late November:

The U.S. economy, the world’s largest, has proved resilient even as the Federal Reserve has raised its benchmark interest rate 11 times since March 2022 to fight the worst bout of inflation in four decades. Those higher interest rates have significantly increased consumer and business borrowing costs. But they have also helped ease inflationary pressures: Consumer prices rose 3.2% last month from 12 months earlier, a marked improvement from the 9.1% year-over-year inflation recorded in June 2022.

The U.S. job market is cooling from the red-hot levels of the past two years. But it’s still healthy by historical standards: Employers are adding an average of 239,000 jobs a month this year. And the unemployment rate has come in below 4% for 21 straight months, the longest such streak since the 1960s. [Pols emphasis]

This bears repeating: Thee unemployment rate in the U.S. hasn’t been this consistently low since the late 1960s.

By just about every statistical benchmark, the U.S. economy is humming along at an incredible pace. Despite the rhetoric you see online or hear at the water cooler, economic news is very, very, very good.

As Nick Hanauer recently wrote for “TIME” magazine, “Bidenomics” is not just a slogan anymore:

Despite record-low unemployment, rising real wages, strong GDP growth, and a rapid fall in the inflation rate to below both global and historical averages, only 36 percent of Americans say they approve of Biden’s handling of the economy. Given such weak approval numbers, “Bidenomics” might at first appear to be an ill-advised slogan for a reelection campaign.

But to dismiss Bidenomics as mere sloganeering is to miss the point: The Biden Revolution is real, and running on Bidenomics is key, not just to winning reelection, but to winning the battle to establish a new consensus over how to manage and build our economy in the decades ahead. 

Like Reaganomics before it, Bidenomics is largely an argument over economic cause and effect. Bidenomics argues that a large and thriving middle class is the primary cause of economic growth. “When the middle class does well, everybody does well,” the President has repeatedly explained. This is the core proposition of Bidenomics: that prosperity grows from the bottom up and the middle out. [Pols emphasis]

Look, another amazing economic number!

The political question, then, is about why Americans keep expressing that they feel like the economy is in bad shape. The Associated Press recently tried to dig into this phenomenon, noting that “Pollsters and economists say there has never been as wide a gap between the underlying health of the economy and public perception.”

The New York Times has also recently examined the odd “bad vibes” around the economy, pointing in part to viral social media posts from people complaining about price increases; like anything else on social media, negative news goes viral faster than its counterpart.

Much of this is because of learned expectations. Consumer prices rose almost imperceptibly for decades, which made significant jumps in recent years stand out more for the average American — price increases feel different now because more people remember when they were much lower. This is sort of the modern equivalent of your grandparents talking about how a gallon of milk used to cost only a quarter; it seems fantastical to imagine out of context, just as it would have seemed absurd 70 years ago to ponder paying more than a dollar for any food item at the grocery store.

From a political messaging perspective, Republicans are well aware that they need to obscure the reality of our current economic success. From the same AP story:

The Republican counter to Biden has been to dismiss the positive economic data and focus on how voters are feeling. As the annual inflation rate has fallen, GOP messaging has focused instead on multi-year increases in consumer prices without necessarily factoring in wage gains. And Republican lawmakers have argued that people should trust their gut on the economy instead of the statistics cited by Biden. [Pols emphasis]

Not an economist

There it is: You gonna trust facts and data, or you gonna listen to what Bubba from West Virginia done said on Tik Tok?

As always, Republicans have no real ideas on economic policy other than to continue arguing that we should give more tax breaks to the rich in case wealthy Americans suddenly decide to pass it on to others. As Dana Milbank writes today for The Washington Post, the Republican-controlled House of Representatives may well go down as the least-productive Congress in history. As in, like, ever.

If you can’t talk about what you are doing, and you don’t want to talk about what your opponents are doing, then the only strategy left is to yell “SQUIRREL!” and/or initiate an impeachment investigation into President Biden for reasons even the most dedicated MAGA follower couldn’t explain for all the money in the world.

President Biden and Democrats will need to be more diligent in 2024 about selling the story (and the data) of America’s continued economic growth. You can help, too: When your drunk uncle starts whining about the economy over the holidays, pull out some of these facts and let ’em fly. Maybe you won’t change his mind, but one of the best ways to fight disinformation is to make sure that actual information gets out into the world.

The results of the 2024 election may well depend on it.

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14 thoughts on “It’s the Economy, Stupid…and It’s Pretty Darn Good”

  1. Both true statements, Pols, but also irrelevant because perception becomes reality for most people. 

    If enough stupid people in this country (and we have no shortage of those) watch the evening news on a particular network which shows that screen shot from Eagle Pass, Texas, every night with the hords of dark-skinned people crossing into the U.S. and who are told (by that same network) that these people are stealing their jobs, collecting government benefits, giving fentanyl to their children, and spreading diseases, those stupid people are going to believe it.

    You can try to explain intelligently and rationally that most, if not all, of that is bullshit but they are not going to believe. That particular network validates and reinforces the fears and prejudices those people hold.

    Biden doesn't have a problem with his policies. The economy is in good shape. What he has is a marketing problem. And he is going to be running up against the ultimate salesman who can peddle a sack of shit by putting a "Sugar" label on it and assuring the buyer that it is pure sugar.

     

     

  3. At one point, Trump was able to be an effective sales person.  And I expect he will hold on to many who bought from him in 2016 and 2020.  

    Considering those voting in the two prior Presidential races, I think the number of Trump to Biden votes will go well beyond the number of Biden to Trump voters.  It will be hard for Trump to gain new votes by continuing to repeat “the election was stolen.”  

    The groups that supported Trump most strongly in 2016 — Evangelical Whites, NRA rural voters, those over 65, and non-college female Whites — have all suffered both absolute and proportional declines in the past 8 years. 

    And of course, Trump’s own abilities have slipped.  Saying things like: .  

    “That’s why it was one of the great presidencies, they say. Even the opponents sometimes say he did very well, I have to say. ‘Take it back,’ they scream. his people say ‘Take it back.’ From that day on, our opponents, a lot of opponents, but we’ve been waging an all-out war on American democracy.”

    And the campaign then spent days trying to spin out of the remark.  Standard campaign measurement — when you are explaining, you are losing. 

    1. Biden stutters and stumbles over speech, which has been a life long affliction. Yet, he is pretty coherent considering his age. Trump, on the other hand, is clearly showing signs of the mental confusion that is part of early dementia.

    2. "I think the number of Trump to Biden votes will go well beyond the number of Biden to Trump voters"

      You are very much mistaken.

      When Trump lost to Biden – by only 7 million votes (about 4.5%) – the U.S. was in the middle of a pandemic with the death toll then approaching 1,000,000 people. On the left and in the middle, people responded favorably to Biden's empathetic talk about the "empty chair" at the upcoming Thanksgiving dinners. Even on the right some of the COVID denier were getting pissed about the shut down. The unemployment rate hit 13% in the second quarter of 2020 and nearly the entire country was living on credit cards.

      That is why I'm surprised Biden only won the popular vote by 4.5%. People vote their fears and prejudices. If the one guy is offering you hydroxychloriquin, bleach, and light blubs, and the other is offering you science, you would think the people fearful of dying might go with the guy offering science. I mean people are basically stupid but are they THAT stupid?

       I'm surprised Biden didn't win by something in the neighborhood of 8% to 10% last time given the pandemic alone. But next year, he won't have the CNN body count ticker on the bottom of the screen showing how many people died that day. Frankly, most people will have forgotten all about COVID and Trump's handling of it by next year. (Hell, most have probably already forgotten.) All they will be thinking about is how insecure they feel financially while Orange Jesus tells them it's Biden's fault.  

       

      1. Well, maybe not.  Even Wall Street is taking notice that Ol’ Smokin’ Joe is laughing at Trump’s ridiculous predictions:

        President Joe Biden takes a dig at the 2024 Republican primary’s front-runner after the Dow Jones Industrial Average scores record closes this week

        ‘Good one, Donald.’President Joe Biden

        The line above came in a social-media post on Friday from President Joe Biden, as he took aim at one of former President Donald Trump’s bearish forecasts for U.S. stocks.

        Biden was jabbing at Trump for saying during the 2020 White House race: “If Biden wins, you’re gonna have a stock-market collapse the likes of which you’ve never had.” His post featured video of Trump delivering that line.

        From MarketWatch’s archives (2020): Trump claims Biden win would crash market, cause depression

        The Democratic incumbent’s dig at the 2024 Republican presidential primary’s front-runner comes as the Dow Jones Industrial Average DJIA has been closing at record highs this week.

        The Dow and other U.S. stock gauges SPX COMP have gotten a boost from the Federal Reserve signaling Wednesday that it’s pivoting away from the interest-rate hikes that have been aimed at taming inflation. The central bank is instead considering three rate cuts next year.

  5. Biden is doing the job he was elected to do. Brought the country through the pandemic and its chaotic aftermath. Passed some significant legislation in the 1st two years.  Threaded the needle on foreign policy with his support for Ukraine. If you look at the special election results, Dems are on a tear. If the voters vote for responsible government, they can't do much better than Biden.

    1. Biden also appears to be finally getting a focus on the southern border, which is long overdue. Pro-migrant progressives like to think the majority of asylum seekers are actually fleeing real threats, when most of them are economic refugees.

      1. Depends on the country- El Salvador and Honduras are extremely violent countries from which migrants legitimately flee in fear for their lives, while Mexican immigrants are primarily economic refugees ( like yours and my European ancestors, they came seeking economic opportunity- settling on lands stolen from Indigenous people.)   Guatemala is sendng climate exiles, as rainforests and mountain habitat disappear under man-made climate change. 
         
        Biden can focus on the southern border- there are plenty of nonpunitive and high tech approaches to immigration, including wearing anklets instead of being locked up, more cameras and drones, better training for border guards, allowing humanitarian aid, preserving wildlife corridors, sharing information on actual criminals and drug runners between federal agencies. 
         

        Regardless of the causes of migration, migrants, like our European ancestors, contribute hugely to the American economy.  Immigrants start businesses, innovate, consume goods and pay taxes. America is a country of immigrants. For better or worse, it is part of our national identity. 
         

         

        The Hamilton Mixtape – Immigrants (We Get the Job Done) from Diktator on Vimeo.

         

        1. It will be interesting to see if anyone follows up on the transfer of property after the hellscape that is Gaza reaches relative peace. The billionaires are already shopping for some new resort development property.

          Condoleeza may already be there.😉

           

  6. Larry Sabato compares Biden and Trump at this point in time (11 months before each ran for re-election). 

    Notes on the State of Politics: Dec. 13, 2023 – Sabato's Crystal Ball (centerforpolitics.org)

    They're comparablably unpopular although Biden today is a little bit more so than Trump was in December 2019.

    The two significant points:

    1.   Trump was still getting 90% approval from the Republicans while Biden is getting 78% among Democrats.

    2.   Trump was getting 36% of independents while Biden is only getting 29%.

    These are national polls so they do not take into account the numbers in the seven swing states.

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