Janet Yellen says Joe Biden saved the world.
“Over the past year, global growth has been resilient and stronger than predicted. America’s path to a soft landing has underpinned global growth,” Yellen will say Tuesday in Sao Paulo, where she’s hanging out with G20 finance ministers and central bank chiefs.
There’s little doubt that Bidenomics worked. The US has grown at rates which Donald Trump, were he president, would surely tout as evidence of “the greatest economic boom the world’s ever seen.” After all, that’s how Trump described growth during his term, when the economy expanded at a much slower rate. And don’t tell me Trump would concede that inflation’s a blight. He wouldn’t. Trump doesn’t concede anything, ever, including elections, and he’d invariably argue that the rapid rate of overall economic expansion trumps (pun fully intended) elevated price growth. He’d blame somebody or something else for inflation, and guess what? He wouldn’t be wrong. He’d also point to robust wage gains for everyday people and claim the pace of those pay hikes is outstripping inflation anyway, and he wouldn’t be wrong there either. He’d tout re-shoring and manufacturing investment as proof of his America first bona fides, and every day, Americans would wake up to a reminder that economists were wrong and he was right: There was no recession and the economy’s booming. In short, Biden’s economy looks a lot like the economy Trump promised to build, only to turn around and pursue a mix of cartoonishly jingoistic protectionism (which benefited virtually no one) and supply-side gimmickry (which benefited exactly who it was supposed to benefit, namely the rich and corporations).
So why do polls consistently suggest Americans trust Trump to run the economy better than Biden? The last NBC News national poll showed Trump with a 22ppt lead over Biden (55 to 33) when the question was which candidate would do a better job handling the economy. An FT-University of Michigan poll showed Trump with an 11ppt lead on the issue. And so on.
The first answer is that it’s all partisanship, amplified by the Trump cult phenomenon. If you’re a dedicated Trump voter, it wouldn’t matter if Biden wrote you a check for a million dollars and your personal inflation rate was 1%: You’d still tell pollsters you prefer Trump’s economic policies. The same’s true of Republicans more generally, just not to the same degree. An AP-NORC poll published a few weeks ago suggested the partisan split is so stark as to render such polling useless. In the survey, 35% of adults described the economy as “good,” up from 30% a few months ago, and more than 10ppt higher than this time last year, but the Democrat-Republican split was 58% to 15% (i.e., nearly six in 10 Democrats said the economy was good, versus fewer than two in 10 Republicans). 65% of Democrats approved of Biden’s handling of the economy, while virtually no Republicans were willing to go out on that limb (a negligible 7%).
Another answer (and don’t scoff, because this has more explanatory power than it should) says memes hurt Biden immeasurably more than they hurt Trump. The “frail Biden” meme has succeeded in convincing many voters, including some Democrats and more Independents, that Biden’s allegedly diminished mental faculties mean he doesn’t deserve credit for anything good that’s happened. Of course, his critics never apply the same logic to adverse developments: If someone’s too incapacitated to wittingly bring about good outcomes, then they can’t readily be blamed for bad ones but… well, nobody’s ever accused Trump Republicans of being obsessively logical.
By contrast, Trump relishes his own memeification. He also monetizes it relentlessly. He sold shirts with his mug shot on them for $36, for example. As Clare Malone wrote recently for The New Yorker, “It’s hard to caricature a caricature. Trump is only four years younger than Biden, but his bellicosity (to put it politely) has seemed to stave off accusations of senility.” (In a testament to Trump’s immunity to caricature, he stood up last week before a room full of African Americans and said, of his legal troubles: “I think that’s why the Black people are so much on my side now. They see what’s happening to me happens to them. Does that make sense?” Then, he said, of his mug shot: “You know who embraced it more than anybody else? The Black population.” That’s so flagrantly racist that attempts to castigate it fell flat. Everyone tried. Nikki Haley included. It didn’t matter. Just another example of “Trump being Trump,” as though that’s not the problem.)
A third answer is that the economy actually isn’t all that great for everyday people. Inflation’s corrosive, after all. And there’s a “bottom line” calculus that says if you’re paying more for groceries and gas now than you were three years ago, whoever’s president has failed economically irrespective of wage growth, the stock market and so on. Relatedly, it’s possible that high interest rates on variable-rate debt are an under-appreciated factor when it comes to explaining the much-discussed disparity between consumer sentiment polling (which has improved of late, by the way) and Biden’s approval rating.
In a paper published this month, the IMF’s Marijn Bolhuis and Harvard’s Karl Oskar Schulz and Larry Summers argued that because “the cost of money is not currently included in traditional price indexes,” there’s a “disconnect between the measures favored by economists and the effective costs borne by consumers.” According to the paper, the majority of the gap between consumer sentiment at the lows and what can be explained by the unemployment rate and inflation alone, can likely be attributed to borrowing costs and credit supply.
“Concerns over borrowing costs, which have historically tracked the cost of money, are at their highest levels since the Volcker-era,” Bolhuis, Schulz and Summers wrote, adding that their “alternative measures of inflation” (which include borrowing costs) can explain nearly “three quarters of the gap in US consumer sentiment” last year. Of course, high interest rates are a response to high inflation, and if you blame Biden for inflation, then you probably blame him for high rates too.
I’d note, though, that the consumer DSR, despite having risen fairly sharply, isn’t especially high from a historical perspective. And the mortgage DSR is just barely off record lows (see the figure below).
Yes, credit card debt’s piling up. And yes, delinquencies are rising. And absolutely it’s true that legions of would-be homeowners are vexed by the highest all-in costs in history. But I’d argue the problem for Biden is just that Americans aren’t necessarily doing a lot of complicated math when they assess this equation. It’s not a ratio, it’s the simple reality that everything costs more. When you get a raise, it’s supposed to be a windfall. If it’s just compensation for the rising cost of living plus a little extra for — I don’t know what normal people do with their extra money — date night or something, that’s not going to overshadow your consternation at a grocery bill that’s 50% more expensive than it was four years ago.
At the end of the day, though, I’m afraid the answer’s even simpler than an explanation that says Americans are paying more for the things they need than they did when Trump was president.
If the question is why Americans prefer Trump over Biden on the economy (or just in general), the answer may well be that between high inflation, Trump’s legendary skills as a bullshitter and the fact that Americans are notoriously amenable to bullshit, a majority of the voting public has been duped into believing that the same man who sold you a Trump steak, a spot at “Trump U” and who’d sooner sell you an NFT or a pair of $400 “Never Surrender” sneakers than pay his legal bills out of his own pocket, is an economic savior.
That, despite four years during which the same man’s policies did very little for everyday people if they did anything at all. And despite the fact that the same man’s a serial bankrupter of businesses. And despite the fact that advertisements like the one shown below are so comically exploitative that it’s hard to understand how anyone could possibly be so stupid. But the “Never Surrender” sneakers sold out. Within hours.
Note that the pitch was replete with laughably stereotypical sales tactics designed to create a self-fulfilling scarcity loop: “Super limited.” “Strict limit of three pairs per customer.” And so on. Then they sell out, “proving” demand far outstrips supply, and setting the stage for an invariable restock, which’ll dilute existing holders. (You should’ve read the fine print: “Trump Sneakers are intended for individual enjoyment and as a collectible and not for investment purposes.”)
Trump’s under four indictments. He’s facing more than 90 criminal charges, including several related to allegations he tried to overthrow the US government. Biden, by contrast, was facing an impeachment inquiry, but as it turns out, the charges were based almost entirely on the word of a single informant whose story might’ve been planted by Russian intelligence operatives. I draw that comparison to underscore the notion that the gap between reality and fantasy isn’t confined to views around managing the economy. Americans are in thrall to an ever-expanding myth — indeed, an ever-expanding mythos which is winning converts, and may well win another national election for the man at the center of it. According to RealClearPolitics, Trump’s favorability rating is now 42%, while Biden’s is 40%. Trump leads Biden by more than 2ppt in a national head-to-head.
Writing for Bloomberg Opinion last week, Claudia Sahm said the Biden administration “must focus on solutions to the problems facing the economy” because this White House “can’t win the blame game, regardless of the facts.” I take the point, but if facts no longer count, problem-solving is irrelevant. You can fix all the problems, but if enough people can be convinced, against the evidence, that everything’s terrible or that everything would be better if only we handed the reins back to a walking, talking felony charge, then it won’t matter.
Facts only serve to confuse the masses who have long made up their minds, or so goes some saying
Facts also get in the way of good storytelling. And with a master bullshitter running for President again, I can’t wait for more “winning”. ….. and his whining.
A lot of families could just look to their savings and the buying power it represents now vs 3 years ago. Many American families had fatter bank accounts at the end of trumps term/start of Biden’s term than they do now, to say nothing of prices now vs then.
To some, myself included, that would obviously not be Joe Biden’s fault. On the other hand, it’s relatively easy napkin math for most people to grasp as they cling to a standard of living.
I’ve recently been binging the works of Yuval Noah Harari on Audible. He’s most famous for his first book entitled “Sapiens” which surmises that the reason Homo Sapiens are the only humans left on earth is because they killed off all other species. His thorough analysis of human history comes to a single conclusion about why weak beings dominate the planet. Humans unique ability to work together through the use of story telling. Put another way, humans ability to tell each other lies so well that millions of us do things in support of those lies. Trump, Trumpism, and whatever is left of the GOP continually demonstrate the power of this unique skill. Biden’s factual accomplishment track record surpasses any president in my lifetime but, none of that matters. The story of Trump the superior president in every way is what people choose to put their belief, money, and opinion behind. And, unfortunately, being that we are all humans; no amount of facts will ever change that.
” Trump cult phenomenon” will eventually run its course, like crypto, but not soon.
Regardless of the macro facts, the left has a messaging and optics problem. Most voting class people are extremely skeptical of a platform that calls for a more equitable redistribution of societal benefits, sprinkled with some righting of historical wrongs, because it is in our nature to want to feel empowered to make our own way, not to be infantilized. Only people who want that are liberal arts students and coastal liberals who are insulated from the effects of bad public policy. And while the victim/oppressor (the system sucks) narrative works for people who glean comfort, empowerment, and perhaps self-righteousness from victimhood, once people start raising families, taking responsibility, maximizing their opportunity for financial security despite the world being deeply unfair, and accomplishing things by what at least feels like of their own effort, the left’s platform becomes more degrading and perverse over time, particularly as the left paints anyone who disagrees with them as immoral, as opposed to just wrong. It gets exposed when it becomes evident to working families that there are no clean centralized solutions to most societal problems, only tradeoffs. When the trusted local news runs a story that a city, which can’t hide pain via deficit spending, is cutting back on municipal sanitation worker hours to make room for funding to mitigate the local migrant crisis, all of a sudden the tradeoff becomes evident. And you have bad actors like Trump who amplify the nativist v. migrant narrative. To which the left (ironically) cries, “fake news”. Your platform can’t just be “We care about people and you don’t, Biden is definitely not trending to be an invalid by 2026, and if you are a good person, you’ll stop the orange lunatic”.
This article nails it on many levels. I personally give a lot of weight to Americans’ amenability to BS in combination with Americans’ lack of basic interest in reading about their own country (or reading in general). If you judge the economy by higher prices and an increasing credit card bill then today’s economy might be worst on a daily basis for most individuals compared to 4 years ago. I am glad you mentioned memes because our moronic society has memefied the flow of information to absurdity, clearly not helping the old man stuttering or falling of a bike or just (god help us) eating ice cream. Anyway, I was sadly not surprised to read that the Teamster union is trying to decide which candidate they will endorse for president, really? Biden picketed with auto unions workers and has overseen arguably the most union friendly administration in ages, yet the Teamsters might endorse Trump, further proof that facts no longer matter in our society.
I feel like this perception divide has been around a while with Republicans generally given credit for a better economy, a stronger stock market and a smaller budget deficit. Yet Reagan, GW Bush and Trump all presided over huge budget deficits, expensive military forays and/or their fair share of economic/geopolitical crises. Clinton, Obama and Biden had their shares of the same, but argulably managed to reverse the prevailing negative trends that were handed to them. None of that seems to matter, however, to these broad perceptions of economic stewardship — mythos, as you put it well — when it comes to the economy, Republicans good, Democrats bad.
But as you’ve recently underscored the folly of trying to measure anything about the economy, whether the empirical such as the number of new or used houses sold, or the less tangible such as the rate of change in prices over time, even if it can be assumed that these things can be measured (let alone predicted), what does it even matter if their already dubious accuracy is constantly subsumed by the prevailing mythos?
While my recollection is hazy, I clearly remember that leading up to the 1988 election, there was a very adverse economic report that was deemed to be harmful to George HW Bush’s reelection. After he lost to Clinton, that economic report was subsequently revised sharply to be much less adverse than it initially seemed. So, back then, we were letting the numbers fool us. But now, I fear, the numbers, however distorted or shallow to begin with, are being disregarded in favor of guts and feelings. So maybe this is progress. We don’t need numbers to fool ourselves anymore — we’ve learned to do it directly.
This short (and likely cherrypicked) segment from Jimmy Kimmel really highlights this point, at least among MAGA nation. https://youtu.be/FAFbOK01uE4?t=515
Don’t forget that a large segment of Trump followers are the ‘christian nation evangelicals’ who don’t care about facts only organized religion fairytales and desire for the apocalypse to happen sooner rather than later. If the world as we know it is going to end, who cares about inflation, bank accounts or food prices. The holy wars trump (pun intended) everything else.
I think Trump supporters among voters is much easier to understand than Trump supporters in the Senate and Congress. If you’ve ever been to or near a Trump rally, you would certainly notice the cult-like aspects of it — I mean I just don’t know that many adults who feel the need to accumulate far more merch than your average Swiftie, particularly when such merch is not only tacky but also includes misogyny/profanity and often comes in the form of 100 square foot flags on 40 foot poles. My garage already has enough junk. But in the end, I don’t feel their support is truly about policy — I feel it is much more about entertainment, having a good time and being involved in “politics.” Hating the Democrats and swallowing the policy is just the price of admission.
But the support in Congress and the Senate is much more mystifying to me, although ultimately I think it’s existential. I’ve shared my tinfoil hat theory here before that a lot of this “professional” support is a product of Trump’s threats (i.e., Kompromat — e.g., Lindsay Graham and TIm Scott for obvious reasons, Elaine Chao for less obvious ones). And I think a lot of the rest of the support is due to the fact that the GOP has cinched its wagon to Trump to the point that in the face of popular vote and demographic headwinds, party over country is the best way to retain power. Which means hating and obstructing the Democrats, and either pledging unwavering loyalty or getting the hell out.
Yes, I am a natural born American citizen, and I am not proud of the fact that Americans, in general, seem to have an stupendous lack of critical thinking skills; hence Trump.
Today I read a summary of a purported newsweek article that purpurted that the location of Wade had been determined from cell tower pings to be in bosses condo. Not only is this technically impossible but said cellphone records can be faked and any real ones must be obtained by subpoena. Implying that the person who is testifying to this bombshell is either lying or a criminal or both.
I am faced with not knowing if Newsweek even ran such an article, whether this charade was aired in court or how/whether the fidelity of the smear was questioned in court. Airing criminal court proceedings in this manner is prejudicial to our system of criminal courts. Therefore I am confused and I will be willing to bet that the counterpoints are lost on the majority of the population. This propaganda if even for a minute has potential to drive our nation crazy and it contributes to the ill feeling people have about the institutions which benefits only one person.
Is this ‘the problem’ which if we solve it will resolve all ‘our problems’. I think not but the net result seems to be that we need to be more diligent than ever and more pro-active than ever just to stay on the treadmill. I would love to see counterpoint to this thoughts somewhere, sometime.
Ironically popular opinion and even the popular vote won’t decide this crucial presidential election. It will literally come down to 10,000 votes in a few swing states to win the electoral math.
Luckily I believe Biden is competent enough (decades in the Senate plus VP for 8 years) to know exactly how to win, whereas Trump’s incompetence means he can’t even lie or cheat (or stage a coup) successfully.