Poll after poll shows Americans rating economic conditions as very bad and giving Biden very low approval for his economic management.
The strange thing is that these bad ratings are persisting even as the economy, by any normal measure, has been doing extremely well.
This is starting to become sort of a staple argument from the left. That the general public has no idea what is really happening with the economy, that the economy is somehow good, and that negative gaslighting is what is causing all the angst.
we’ve just experienced what Goldman Sachs is calling the “soft landing summer.” Inflation is down by almost two-thirds since its peak in June 2022, and this has happened without the recession and huge job losses many economists insisted would be necessary. Real wages, especially for nonsupervisory workers, are significantly higher than they were before the pandemic.
This is a classic case of things not being as bad as they "could have been" rather than a description of an economy doing "extremely well". And I am not sure about anyone else, but there is no way anyone convinces me that our spending power is higher than it was prior to the pandemic (which is generally how we would define real wages).
We have seen inflation rise to 7% in 2021, hold at 6.5% in 2022, and is running just under 3% in 2023. Is Krugman seriously going to tell us that wages grew in line with these numbers? Does he want us to believe that the average American got a 7% raise during the first year of the pandemic and then a 6.5% raise during the second year? Many people lost their jobs during the pandemic at the same time we saw accumulated inflation reach close to 17% over a three year period. People did not see raises in anything other than interest rates and what it cost to survive.
Moreover, the Feds would like to see inflation back down under 2% and it is projected to remain stubbornly close to 3%. Not withstanding Krugman's assertion differently, 3% is still very high by historical standards. To put it in perspective inflation averaged 1.9% under the four years of Trump and 1.8 under eight years of Obama. So even in the new and improved state, inflation is nearly 50% higher than it was pre-pandemic. This would be like someone going from 100 mph in a 30 mph zone down to 45 mph and arguing that they are not actually speeding because they slowed down. Nope, still doing 50% faster than they should be.
Krugman is especially upset with polling that suggests Americans think inflation is moving in the wrong direction. But as Americans keep seeing the Feds raise their rates lifting mortgages over 7% and many credit card interests near 30% how can they really offer anyone that this signals an improvement. Let's see the Feds go in the other direction before we declare things as being in the "right direction".
When we used to be able to buy a carton of eggs for 99 cents and then the $3.99 price only jumps to $4.20, people are not going to see this as improvement. People simply see $4 for a dozen eggs to be too much to pay and paying even a little bit more is seen as going in the wrong direction.. Accepting some of these obscene prices as a new normal is going to take time and any additional increases whatsoever are going to be taken negatively.
Perhaps that is not the logical mathematical answer Krugman is looking for, but it is understandable for anyone who buys groceries on a budget. You cannot simply pretend that the 7% and 6.5% inflation numbers do not have a lasting psychological effect. It is an insult to everyone's intelligence to suggest that wages have exceeded inflation over this time period and that somehow we have more buying power.
The president and his team intend to make so-called Bidenomics the focal point of their reelection campaign messaging. There is just one glaring problem: It is all a lie. Biden can try to gaslight the American people and retcon the past few years to his heart’s content, but the evidence is simply overwhelming.
Last year, the U.S. economy formally entered a recession — which until 2022, when the Biden administration attempted to redefine the word, universally meant consecutive quarters of negative GDP growth. Around the same time last year, annualized inflation on the consumer price index surpassed 9 percent — the highest reading in four decades, since the infamous “stagflation” of the Jimmy Carter era. Inflation was particularly thorny for many basic household food staples, such as chicken and eggs, some of which experienced 20 to 30 percent inflation at summertime 2022 peaks.
At the end of the day, Krugman is simply wrong again. In fact he probably couldn't be more wrong. The economy has not done well under Biden, much less "extremely well". Because the 7% and 6.5% inflation numbers are now built into personal P&Ls, we stare at higher costs to survive, including higher utilities bills, higher prices services, more expensive grocery store visits, more expensive restaurant visits, higher cost to travel. Because of higher interest rates we see our mortgage or rent payments, car payments, and credit card payments steadily increase. The idea that we have a "extremely good" economy because these things are climbing at a slower pace in 2023 than it did in 2022 or 2021 is out of touch with reality.
But I guess it is the best argument Biden has for reelection? My guess is when this strategy crashes and burns, they will be right back to the tried and true "abortion and Jan 6th" arguments.
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