On Wednesday, the left-leaning British newspaper The Guardian published a Harris poll about what Americans do and don’t know about the economy. It was catnip to President Joe Biden’s White House.
According to the poll, 49% of us believe that the stock market is down for the year when, in fact, it rose 24% in 2023 and is still up for 2024, a rough Thursday notwithstanding. Fifty-six percent believe we’re in a recession even though gross domestic product, a useful economic barometer, has in fact been rising. Forty-nine percent of us believe unemployment is at a 50-year high even though it’s actually near a 50-year low.
Conventional Democratic wisdom was that a) most Americans don’t know what they are talking about and b) Biden deserves a whole lot more praise than he has been getting. “It’s really quite an extraordinary poll,” said economic analyst Steve Rattner on MSNBC. “I’ve never seen one like this.” Rattner went on to say that “there’s a complete disconnect in people’s minds.” In many stories about the poll, Democrats tended to say some version of Americans should read more and are just plain wrong. Many blamed misinformation from those with a vested interest in pushing doom and gloom and the mainstream media for not better communicating the good economic news.
But those Democrats were a) misunderstanding and b) falling into the very same trap that helped fell Hillary Clinton — she of “basket of deplorables” fame.
Writing Friday for the reliably nonpartisan Cook Political Report, Amy Walter and Dave Wasserman said that this coming election is a) extraordinary and b) clearly all about one thing: the economic future. But here’s the rub. Economists tend to use different measurements than ordinary folks. Most Americans don’t see the stock market as the barometer of the economy, even though many have index-based retirement funds invested there. They don’t look at macro unemployment rates, either. Couldn’t care less.
What do they look at? The cost of living.
Or, as Walter and Wasserman succinctly put it, “in the minds of voters, inflation is the engine — not the caboose — of the economy.” There’s one more important point here that explains Biden’s low approval rating and Trump’s current position in the driver’s seat when it comes to the economic-future question: Voters see inflation and cost of living as being within the control of the president. On MSNBC they never get tired of pointing out otherwise. But that’s because they don’t well understand what most Americans want from their leader.
Ergo, Trump’s presidency may have posted weaker growth, but it had low inflation. So polls show he is perceived as a better steward of the economy than Biden, whose tenure has featured all this growth but also stubbornly high inflation. When a trip to a fast-food restaurant costs a family of four $100, or a fun day at Disney World over $1,000, people read that as economic weakness. And when their own wages are not rising as their purchasing power decreases, they don’t give a hoot about the unemployment rate. The paradox, of course, is that American corporations’ ability to raise prices with relative impunity since the end of the COVID-19 crisis is mostly what has fueled all of that growth. Americans, contrary to what some Democrats have been saying, are not fools. They know those profits do not accrue to them.
And, of course, elections are about the future. Polling shows that Americans trust Trump more to bring down prices while a second Biden administration, a majority thinks, likely would still be fighting inflation in four more years. Frankly, we don’t disagree with that second point.
Trump’s strength should not be mysterious to Democrats. There is clear evidence from multiple polls that voters know all about his weaknesses and liabilities. But for many, their trust in him when it comes to bringing down the cost of living and fixing the immigration mess is sufficient to overcome that. The mistake Democrats keep making, time and again, is to bang away on those liabilities (criminal and otherwise) that swing voters already have discounted, instead of fixing the two things that matter the most in this election: immigration and the cost of living.
We’ll add one more thing. The British economist Ambrose Evans-Pritchard wrote this week that “an open world economy cannot coexist under normal trade patterns with a deformed Chinese economy that accounts for 13% of global consumption but produces 31% of global manufactured goods.” In the mind of Evans-Pritchard, current Chinese policy makes for a flashing red light. “This excess capacity can be absorbed only by hollowing out the industrial cores of America, India, and Europe,” he wrote. In other words, we’re seeing the return of some of the factors that gave us the 2008 recession.
That explains, of course, why Biden has applied meaningful tariffs to Chinese goods like electric cars, generally a bad idea in world trade but without alternative in this particular circumstance, especially when you consider that Chinese leader Xi Jinping is in bed with Russia’s Vladimir Putin and all that entails. China is a real problem in the rearview mirror of that economic expansion we’re enjoying.
The Guardian poll also failed to consider whether more Americans are tuned out now than in, say, the previous generation. Perhaps. But many of us always have preferred to care for our families, do our jobs and then have a beer and go fishing on weekends than watch the economic barometers. And everyone has the same one vote.
Democrats have little time to do so, but they have to figure out how to appeal to those who don’t track the latest economic indicators.
