I recently had coffee with one of the smartest political scientists I know. Given his knowledge and access to data, I hoped he’d provide me with comfort about our upcoming election. He did share his reasons for being cautiously optimistic, but he also shared his distress over the magnitude of disinformation and the credulity of far too many Americans.
He then said something that set my hair on fire: “If Trump wins, it will be the last real election we have.” This time, he’ll be surrounded by fanatics who know what they’re doing.
We are barreling toward the most important election in my lifetime, and the “chattering classes’ are already making predictions, based largely on elements that have affected political choices in more traditional times. Primary among those is the state of the economy, so Joe Biden should be riding high. But he isn’t–thanks to the overwhelming amount of misinformation emanating from Faux News and other propaganda sites. The propaganda has convinced large numbers of citizens that what they see with their own eyes isn’t representative of the larger society.
The Atlantic recently addressed this situation in an article titled “U.S. Economy Reaches Superstar Status. No, really.”
If the United States’ economy were an athlete, right now it would be peak LeBron James. If it were a pop star, it would be peak Taylor Swift. Four years ago, the pandemic temporarily brought much of the world economy to a halt. Since then, America’s economic performance has left other countries in the dust and even broken some of its own records. The growth rate is high, the unemployment rate is at historic lows, household wealth is surging, and wages are rising faster than costs, especially for the working class. There are many ways to define a good economy. America is in tremendous shape according to just about any of them.
The American public doesn’t feel that way—a dynamic that many people, including me, have recently tried to explain. But if, instead of asking how people feel about the economy, we ask how it’s objectively performing, we get a very different answer.
The article points out that America’s current economic-growth rate is the envy of the world–that between the end of 2019 to the end of 2023, GDP grew by 8.2 percent, which was “nearly twice as fast as Canada’s, three times as fast as the European Union’s, and more than eight times as fast as the United Kingdom’s.” During the past year, others– some of them among the world’s largest– have fallen into recession, complete with mass layoffs and angry street protests. That included Germany and Japan.
The article analyzes people’s buying power over time. Since 1947, prices have increased by 1,400 percent. That sounds terrifying–except that incomes have increased by 2,400 percent over that same period. And thanks in no small measure to Biden’s focus on “growing the middle out,” several analysts have found that “from the end of 2019 to the end of 2023, the lowest-paid decile of workers saw their wages rise four times faster than middle-class workers and more than 10 times faster than the richest decile.”
Wage gains at the bottom, they found, have been so steep that they have erased a full third of the rise in wage inequality between the poorest and richest workers over the previous 40 years. This finding holds even when you account for the fact that lower-income Americans tend to spend a higher proportion of their income on the items that have experienced the largest price increases in recent years, such as food and gas. “We haven’t seen a reduction in wage inequality like this since the 1940s,” Dube told me.
The unemployment rate has been at or below 4 percent for more than two years, the longest streak since the 1960s.
The article has much more data–all positive–and its findings have recently been echoed by the World Bank, which says the U.S. economy is the envy of the world. As the linked story from the Washington Post reports,
While Americans’ unhappiness with high prices remains a key vulnerability for President Biden’s reelection bid, the World Bank now expects the U.S. economy to grow at an annual rate of 2.5 percent, nearly a full percentage point higher than it predicted in January. The United States is the only advanced economy growing significantly faster than the bank anticipated at the start of the year.
The excellent performance of the economy should lift Democratic prospects–but the propaganda war has been effective, especially with the low-information voters who (as still other studies confirm) are most likely to support Trump.
The only good news is that these low-information folks are also the least likely to vote. We can hope….
The propaganda machine is insidious. Not only from the Right (or should I say “Reich”), but even the mainstream media is getting in on the ruse.
Robert Hubble made a good point in his newsletter yesterday about the Washington Post and the NYT. They are practicing disinformation out of greed. The strategy is to “lie about Biden and gripe about Trump” in order to gain readers.
The scariest word in the world today is Sinclair. They own and control over two hundred media outlets in cities and states nationwide. Most people don’t think about who owns their local news source. They tune in to get the weather and sports scores of local teams. Sinclair provides some of the most egregious fake videos and propaganda I’ve seen.
“The excellent performance of the economy should lift Democratic prospects–but the propaganda war has been effective, especially with the low-information voters who (as still other studies confirm) are most likely to support Trump.”
It appears to me (not a low-information voter) that the “excellent performance of the economy”, the recipients of that excellent performance are corporations and the wealthy supporting Wall Street and the rising Stock Market which is being supported by the majority of Americans trying to pay all highly increased monthly bills AND medical bills and keep food on our tables. The Stock Market is doing an excellent job of recouping their Pandemic losses by price gouging and increasing the profits of one another. The money increasing their profits is coming from our pockets.
“…the World Bank now expects the U.S. economy to grow at an annual rate of 2.5 percent,” Eighteen months ago my bank offered a much higher interest rate on the few small CDs I have managed to hold onto; the rate was good for 1 year, the maturity date offered a lower interest rate but still higher than in past years for only 6 months. Last week the new maturity offer was again lower and now for 4 months. Factor in the increased costs of every service and all merchandise needed for day-to-day living and the economy of all average Americans is not rising because we are paying to maintain and increase the economy of corporate America. Some people’s income level have increased but not even close to the level of increased prices.
Stop pissing in our ears and telling us it is raining. By the way; President Biden’s campaign promise to aid low-income families, enabling them to have more affordable Internet access via his Affordable Connectivity Program (ACP), part of his Infrastructure Bill, was ended in April by Trump’s House majority,
The only economic metric that isn’t positive for Biden/Harris is inflation, even though it has come down dramatically since its peak. While food and energy prices have indeed risen during their administration, wages have also risen nearly as much, according the reliable sources. While that does hit all pocketbooks to some degree, it simply isn’t the negative impact reported by the Faux “News.” All of the positive economic news – including faster growth, shrinking inflation and healthy job creation – has to get way more attention from both the press and the Democratic campaign to offset the misinformation. Add to that positive news all that this administration has accomplished, including The American Rescue Plan, The Infrastructure Law, The Chips and Science Act, The Inflation Reduction Act, among many others, affecting everyone’s lives in very positive ways, so much so that in many cases GOP legislators have touted those positive aspects to their constituents EVEN THOUGH THEY DIDN’T VOTE FOR THEM. Nuff said.
I give more credence to JoAnn than Gil this morning. The statistics say one thing, but the lower-income and fixed-income folks are taking a beating, and those are supposed to be who the Democratic Party represents.
The main culprits are rising rent, food, energy, car repairs, child care, insurance, medical costs, and higher interest rates on loans. According to Second Harvest, higher prices are sending more people to food banks.
Those who did well before Biden are doing extremely well today. However, the fixed-income and lower-income folks are being pummeled. The higher prices are the result of corporate price-gouging, which is required to satisfy investors’ quarterly expectations.
Government debt is also out of hand, causing much concern as both oligarchy-controlled parties threaten social safety cuts. The printing of more money also raises inflation.
To me, both political parties cater to the well-off donor class. Making their lives better means more donations, and so does the war economy. We have a threat of a nuclear holocaust, which also breeds panic in many people. Add to the country contributing to genocide in Gaza doesn’t help either.
As we’ve pointed out many times on this blog, we are still experiencing the tale of two Americas, and neither political party wants to help the working poor and lower-income folks.
https://apnews.com/article/inflation-prices-rates-economy-federal-reserve-biden-f02b969d1b44a7ccb0385be03f766de0
The nature of our country has always been its economic focus on the middle class. That’s what Biden promised and delivered on. He did it despite the economic tides from the pandemic decidedly against him. Those are the facts.
That did not enhance the wealth of the Murdocs and Sinclairs, though. They prospered by offering entertainment that implied the contrary. They offered up a picture of gloom and doom because their long-term strategy was to create an audience that was addicted to hearing and seeing that, and then they kept doubling down every year on even more gloom and doom.
They celebrated Trump as he delivered on tearing the country down. The excoriated Biden as he turned things around in stellar fashion.
Their congregation said “amen”.
It appears that Biden has enriched the working poor so much that they can now buy even more Trump swag and donate monthly to his “legal defense fund” – strike that “re-election campaign”. Biden must be proud!
morning coffee with the const workers,today. like the above daily, 2.4% in the trump dump yearly, while Biden is at 4.2% give or take this year.. none of this even was a focus in the A.m. in the gravel pit. (literally).. seems the blue collars still blame Biden for,or the goverment.. no words at all on the economy. just the same old flame trowning crap about someones skin or thier caste status. the BOTs are working over time. I recently ran across the article about SBF/FTX fame. in the guardian. yesterday, read it, its more about high tech people with the same ideas as trump and his ilk. seems gentrification in the bay area has its rewards and with the fail safe computer world, seems the money to support it is readily available by the billionaires.. onward,shareholders are in a tizzy about keeping inflation there and their Grab… but the blue collars today,here never even made it past the skin and smell issues… talking points, yea, made my day…
JoAnn – Nailed it – KUDOS
As a friend has noted, our first amendment allows the lying and gaslighting of the right. We are in trouble.
Seems that many here is the deep red state of Indiana have no understanding of how the prices of gas and utilities have risen. The General Assembly GOP supermajority voted to increase gasoline taxes and the Indiana Utility Regulatory Commission, most of who have been appointed by GOP governors, recently raise utility rates, again!
Rents are prohibitively high and ever increasing. How come? Unregulated acquisition by “Investors” who pay cash to sellers and then squeeze every penny out of an already vulnerable population while decimating neighborhood of actually homeowners who care for maintaining them.
While food prices have risen, corporations providing food commodities are reporting record profit amidst plans to acquire competitors to corner the market. Executives are being rewarded at obscene rates, while front line workers are given a pittance in comparison.
And yet, Biden and his administration are blamed, as if they were directly responsible for those rising prices and obscene bounus.
As an added note, it seems that the GQP honchos are freaking out over the apparent loss of control over their hardcore religious fanatics. Bopp’s latest concerns about Bechwith’s nomination would be amusing if it wasn’t so indicative of the likely chaos of Indiana’s next administration to say nothing of the country itself if these White Christian Nationalists remain in power.
Sure, all the measurements say the economy is better. Commentators are optimistic. However, too often, these people don’t understand what a lot of Americans face. For them, gas prices may affect their weekend trips to the Jersey shore, rather than 50-mile commutes to a construction site. Grocery prices may affect the percentage of income invested in the markets. For others, needed medications, clothes for the kids and other necessities need to be reduced.
Get down to earth. MAGA has come to represent grievance, but the grievances are real.
After I kept hearing on social media about how bad things are, I ran a few reports in Quicken where my family tracks all of its finances. I have seen some increases in grocery prices, but we typically buy very few processed food items, so our grocery bill is mainly raw veggies and some meat. The reports I ran were for the first 3.5 years of the Trump administration and for first 3.5 years of the Biden Administration. I was only looking at our “grocery” category. Two of us eat breakfast at home 7 days a week and dinner at home 6 days a week. We typically go out for lunch. When I ran the report I was surprised. Under Trump we spent $25K in that time. Under Biden we spent $24K. When I went back and looked at the detail, there was roughly a year we were eating lunch everyday at home durning the pandemic and that bumped up the grocery bill under Trump.
My conclusion is that there has been a slight rise in what it costs to eat at home, but I will have to admit, we eat pretty healthy and cook almost everything from scratch. Being retired gives us the time to do that. We buy an occasional box of Cheezits, but we almost never buy prepackaged lunch meat, frozen meals, or things like hamburger helper. We might buy beef once every two weeks.
I didn’t run a report to see what we have been spending to eat out for all of those lunches, and that one dinner, but I do know that when our usual lunch at Taco Bell went from $12 to $18 we quit eating there. Prices have risen in a lot of areas but some of things people are screaming the loudest about on social media, just don’t seem to be true.
I do know in conversations with one friend that volunteers at a food pantry, people at the bottom that had zero tolerance for price increases are feeling the pressure. I also know that a lot of the price increases in the grocery store are on the pre-processed foods, so if you had no time to spare to cook, you’re going to be really feel to squeeze.
Gil Hutchinson; “While food and energy prices have indeed risen during their administration, wages have also risen nearly as much, according the reliable sources.”
When you are living on or below the federal poverty level, “nearly as much is meaningless”. We are trying to keep up with the cost of basics, not trading up to a newer car (if we have one, mine is 28 years old), redecorate our home, plan a vacation or enroll in college. We are in survival mode!
Since Biden was elected President in 2020 the right wing ‘news’ sources and republican politicians have increased the frequency and magnitude of their lies to their gullible right wing audience. I agree with the author’s statement that our country’s current economic growth rate is the envy of the world.
However, I would like to point out that the author chose to omit other important data that shows our actual overall economic performance to be less rosy for Americans living within the low to lower-middle income level. When he mentions that ‘incomes’ have increased by 2400% and prices by 1400% over the same time period since 1947 much of that increase can be attributed to the exponential growth of C-Suite salaries in US corporations. He mentions the lowest -paid workers saw their wages rise 4 times faster than the middle class and 10 times faster than the richest. A four times increase doesn’t mean much at all if your prior hourly wage was $7.25-$8/hour. The other stats in the article can all be debated.
The reality for those of us that live in the rural areas of both Indiana and the US is that our wages are among the lowest in the state and country and they have not risen enough to counteract the constant price increases for basic necessities. Large chain stores like Kroger and Walmart keep raising their prices every week in the county where I live. Their power and greed keep reducing our buying power.
President Biden’s re-election campaign management needs to ask those of us in rural areas about the economy. My county is full of rabid right wingers that stay glued to fox spews and have no intention of ever questioning that propaganda. Add that propaganda to the reduced buying power in rural areas and it isn’t a rosy picture. If the gop hadn’t gutted the FTC decades ago it would have been able to enforce the Antitrust laws that were created to keep corporations from creating monopolies. The gop is currently doing everything they can to stop President Biden’s antitrust enforcement, but the faux news viewers will never hear about that.
https://www.bostonglobe.com/2024/06/17/business/federal-reserve-inflation-cost-of-living/?s_campaign=8315
Hopefully readable….
I forgot to mention that household debt in the US has increased over the past two years due to high interest credit card purchases – mostly due to “Buy Here Pay Here” plans.
Total household debt rose by $184B to reach $17.69T in the first QTR 2024. https://www.newyorkfed.org/microeconomics/hhdc
Consumer utility costs: Even though Duke Energy has experienced some of their highest profit margins during the past ten years, they requested a massive rate increase of 16% for Indiana customers in April of this year.
Lester – your link required a subscription to be able to read the article, so I declined.
The “economy” is not a thing. It’s just a concept. What people are complaining about is the obvious decimation of the middle class.
Generally speaking I agree with Todd and JoAnn.
This is end stage capitalism, and though from the point of view of politics, OF COURSE we must vote Democrat to move the needle leftward (revolution would not make things better and is not coming, anyway — we need to swing for singles, not homers), but Democrats are also corrupted by big business, and we need to work even harder WITHIN the party to pull it further toward economic justice.
My older relatives (including myself) live decently because their expenses are so low and they own their homes, but young people are struggling, big time. A patchwork of social programs may help the most vulnerable somewhat, but they do not solve the problem of a system that rewards sociopathic behavior on the part of monied interests and bullying, monopolistic practices by large corporations. It has not, certainly not in our lifetimes, been more difficult to be a small business person or even just someone who does not conform to the big company/subservient employee post-WWII model. I have neighbors who are not rocket scientists but make $150,000 salaries working for companies like Eli Lilly while other neighbors gig their way to a shaky $40,000 income that doesn’t even cover their rent and basic needs.
The have-nots are not well educated, and they aren’t going to understand the intricacies of economics any time soon, but they do understand that they work harder than the guy with the new Audi while they deliver fast food in a 2011 Corolla.
Why can’t Democrats just say that this is wrong and needs to change? That FDR was our hero and big business the villain? They don’t seem to speak to the working person anymore, do they? They just enrage them with far-left social values while ignoring their plight.
Nancy and all – here is the text:
he problem
Statistics like gross domestic product and employment don’t capture the complete economic picture. Even as the inflation rate has moderated and stocks trade at record highs, Americans are frustrated.
In 2020, Annie Lowrey, an economics reporter for The Atlantic, penned a piece called “The Great Affordability Crisis Breaking America.” Writing before the pandemic sent inflation sky high, she argued that families during the 2010s were hammered by the mounting costs of housing, health care, child care, and college debt.
“For millions, a roaring economy felt precarious or downright terrible,” she wrote.
On an episode earlier this month of “The Ezra Klein Show,” the eponymous podcast hosted by her husband, Lowrey explained that the inflation outbreak in 2021 and 2022 exploded that long-simmering crisis.
“Inflation is just one statistic,” she said. “I think that you need to look at a more holistic understanding of what people are spending money on, what they’re getting for their money, and the trade offs they’re making to keep themselves in budget.”
My takeaway
The affordability crisis is bigger than inflation. In other words, inflation is slowing but prices remain extraordinarily elevated.
The forces driving the cost of living higher are persistent, political efforts to mitigate them have largely failed, and the Fed lacks the tools — and authority — to tackle them. Partisanship is obviously a factor in perceptions of the economy — 92 percent of Republicans disapproved of Biden’s handling of inflation in a June Economist/YouGov poll versus 27 percent of Democrats. But chalking everything up to politics ignores the real financial stress many people are feeling.
Housing
Costs are through the roof and affordability is in the cellar. The culprit is lack of supply. Lowrey noted that US housing starts are running at about 1.4 million a year, fewer than in 1959, when the US population was about half its current size.
Even if the Fed drives inflation back to its long-term goal of 2 percent — its preferred measure came in at 2.8 percent in April — the housing market remains a mess.
“There will still be a national housing shortage as there was before the pandemic,” Powell said.
Health care
The typical household spent $5,850 on health care in 2022, according to the latest tally by the Bureau of Labor Statistics. That’s an increase of 13 percent since 2019 and represents about 8 percent of median household income.
The Centers for Medicare & Medicaid Services projects that out-of-pocket health care spending will increase by an average of 5.4 percent a year through 2032.
Child care
Affordable child care should cost no more than 7 percent of household income, according to the US Department of Health and Human Services. But a 2024 survey by Care.com, a Waltham company that matches families with providers, found that respondents were spending an average of 24 percent of their income on child care.
Student debt
Outstanding student loan debt was $1.6 trillion in the first three months of the year, an increase of 34 percent over the past decade, Fed data show.
“Prior to the pandemic, the typical payment was $200 to $400 a month, which might not sound like that much, but is a lot,” Lowrey said on the podcast. “Add that to rent, add that to whatever you’re paying out of pocket for health care, add that to child care, if you have children, it really, really adds up.”
Lester’s article in the Boston Globe (liberal newspaper) had this to say:
“The forces driving the cost of living higher are persistent, political efforts to mitigate them have largely failed, and the Fed lacks the tools — and authority — to tackle them.”
I’m surprised they didn’t come out and say it in a liberal paper, but the BG has advertisers to take of too, that corporations within specific industries are decimating Americans with their new algorithmic pricing models, monopolies, and Blackrock (institutional investors). Some use the broad reference of corporate price-gouging. And the Globe is right, the Fed doesn’t have the authority to address this issue, but Congress and POTUS does.
There’s an old saying that you have to have money to make money. Sadly it’s true. Too many people who have fewer resources invest in lower paying instruments. It works at cross purposes. CDs and bank savings accounts only pay well in inflationary times. Even then they lag a bit.
If you can get enough together to buy into a mutual fund that features an S & P 500 index fund and hold it, you can usually beat the market. Warren Buffet advices people to do just that.
Make that, “advises”. Sorry!
I had meant to share this a few weeks ago, but it still fits this post too.
A tech billionaire, Joe Lonsdal, through his organization Cicero Institute has been funding legislation that would criminalize homelessness and would benefit him financially. Lonsdal is actively promoting legislation that creates clients for his own “overflow” privatized prisons and encampments, and is also fighting against programs that actually house and support people in order to divert funding towards him. (Plus if people realize the truth that housing first works, he can’t make his case for prisons and official homeless encampments.)
About a dozen states have introduced bills using his template, including Indiana. Luckily in Indiana, HB1413 never reached a committee.
Also, Lonsdal through Cicero Institute filed a friend of the court brief in the current Supreme Court Case of Johnson V Grants Pass that will determine if Grants Pass can outlaw all sleeping outdoors in “public spaces”, and fine homeless people for sleeping aka criminalizing homelessness. Then when the homeless are criminals that can’t pay their fines, Lonsdal will profit when they become his clients in his prisons.
Exploitation is not new, but Lonsdal is not even hiding his intentions, and is playing a “long game” with local ordinances, state legislations, and the Supreme Court. Unfortunately, he has been successful in diverting the discussions of homelessness away from homeless solutions, housing first works to discussing whether or not the homeless should be allowed to sleep unsheltered.
Supreme Court is supposed to reach a decision by the end of the month. The National Homeless Law Center and National Alliance to End Homelessness have a lot of great information and resources regarding the legislation and court case.
With all the federal monies going into the jobs rebuilding the infrastructure across US has been a driving force on the economy. It will take some time to realize the positive economic effect of those efforts to show and Biden needs another term to save the positive direction of economy to manifest. There’s more he wants to do.
Corporations struggled with supply chains and transport during the pandemic and raised their prices to cover all expense and more. They didn’t want to give much in the way of profit. With relief from the pandemic corporations decided not to reset prices down.
My husband and I are retired and tired after working hard for years, I worked as nurse and my back remembers.
We were both from families of nine kids each and learned to be frugal and make do from the get-go. We avoided debt as much as possible and drive an older prius that gets about 50 miles per gallon. Our biggest bills are taxes and all insurance. We too have become fairly good cooks and work on having healthy diets at a reasonable price.
Any extra money we save goes into our two grandchildren’s 529s. It’s amazing what you can do for yourself and family when tithing to a church isn’t involved.
I did see a report on a positive indicator on news, exact details were missed but the gist is that medical debt is being bought at cut rate prices by philanthropic agencies and the debt of the poor, sick pt. is forgiven. Now that’s more like it! I think all hospitals should be required to handle medical debt in that way and not allow unscrupulous debt collectors free reign to harass poor sick people. They never recuperate under those stressful conditions and end up costing more.
Let’s see – things have been messed up for decades and Congress refuses to help – there was some effort to ease the pain during the pandemic, but those measures are gone and with Biden’s effort things are getting a little bit better, but not great for everyone, especial those at the margins.
Ergo Biden stinks and the economy is the worst ever.
Right!
BTW – my company just “benched” a bunch of us because – well, downsizing happens, even to those in IT – they have three weeks to place us or then we are fired – I am not staring at this from a position of “comfort”
Other point – two recent articles in Science about “misinformation” – both retrospective looking at the pandemic – One found that more damage was done by bad reporting in the mainstream media (e.g. headline – doctor dies after receiving COVID shot – in the story – no causal effect found) – The other compared the effect of “super-spreaders”, who spewed and retweeted misinformation on Twitter, before and after being banned (pre-Musk) – banning them made a huge difference
I thought these studies were interesting and worth sharing