If a tree falls in a forest but no one is there to hear it, has it made a noise? If we have a rapidly expanding economy but a large part of the electorate refuses to recognize it, is the country experiencing a boom?
Despite some growing pains, the US economy is clearly on a vaccine and stimulus-fueled tear, with just about any measure pointing to a rapid recovery from the pandemic crisis.
Yes, supply bottlenecks have caused some inflation, although recent data seems to support the view that this inflation is transient: wood prices have fallen sharply, industrial metals have also fallen, and used car prices seem to have peaked. Yes, some employers seem to be struggling to hire enough workers to meet the growing demand, but it will almost certainly be a temporary problem.
Overall, we are clearly in a much better economic situation than just a few months ago.
Yet, according to the University of Michigan’s long-running consumer survey, self-identified Republicans on average rate the economy much less positively today than they did before the election. from 2020.
You might be tempted to say that to be expected. After all, nearly two-thirds of Republicans mistakenly believe the presidential election was stolen, and about a quarter agree the world is ruled by Satan-worshiping pedophiles. Why be surprised to see the post-truth mindset spread to the economy as well?
But the allegations about voter fraud and the QAnon cult are conspiracy theories, claims about the cabal’s covert actions. The state of the economy, on the other hand, is out in the open. People, you might think, can judge from their own experience or that of their friends and family.
And just to be clear, the Michigan number I’m referring to is the index of current economic conditions rather than the index of consumer expectations. That is, it’s meant to be about the way things are now, not what people think is going to happen. So it’s not for Republicans to believe that Bidenomics will destroy prosperity in the future; it is about them who believe, in the teeth of the lived experience, that it already has.
But hasn’t partisanship always colored perceptions of the economy? And isn’t this happening on both sides? Well, yes – but not to this degree.
If you look at the Michigan polls from a dozen years ago, you don’t see anything that resembles the partisan polarization of today. In June 2009, Democrats and Republicans had similar views on current conditions, although Republicans were more pessimistic about the future.
The parts do not behave symmetrically either. Democrats noted their economic views after the 2016 presidential election, but not that much. The real question about the consequences of the 2016 election is why Republican ratings have become so much more favorable, even though little has changed. Indeed, there has been no significant break in the performance of the economy, certainly nothing comparable to the current post-pandemic boom.
One possibility is that Republicans’ views on the economy are driven by the belief that things are terrible for others, even when they themselves are doing well. That is, it may sound like the right-wing narrative of urban violence. Tucker Carlson and his ilk peddled a vision of a nation all “barricaded”, its citizens trembling with fear of riots and crime. People should know that their own neighborhoods are not like that but can imagine it happening elsewhere.
Whatever the explanation, post-truth politics has extended its domain to the point that it supersedes everyday experience. On the right in any case, the economy that voters perceive no longer has much to do with reality.
What does this say about the politics of economic policy?
A lot of political science research says that economics drives elections. Specifically, what seems to have mattered in the past is the rate of income growth in the six months or so before the election.
This result has always been troubling, in part because presidents typically don’t have much influence over short-term economic developments, in part because it suggests that there is no political reward for good. long term performance. In fact, based on standard electoral models, the optimal political strategy for a president running for two terms would be to start with a deep recession, to make room for rapid growth as the next election approaches. (That’s more or less what actually happened during Ronald Reagan’s first term, even if it wasn’t on purpose.)
Still, things could be worse – and they seem to have gotten worse. We appear to have become a country in which a large portion of the electorate will not even judge a president on short-term performance, as these voters’ perceptions of the economy are driven by unrealistic partisanship.
OK, maybe I’m too pessimistic here. Elections are decided at the margins, so good politics can always be rewarded even if, say, a third of American voters refuse to believe the good news if a Democrat sits in the White House. But I still regret the days when the truth mattered.