Why is everyone so grumpy about the economy?

Americans think the economy sucks and while the Democratic response of “nuh uh!” is technically correct, it’s probably not politically viable. People historically vote based on their wallets, so it’s a serious problem for the incumbent president (that’s Joe Biden) if a majority of Americans wrongly believe we’re in a recession. A recent Harris poll for the Guardian detailed these upside-down sentiments:

55% believe the economy is shrinking, and 56% think the US is experiencing a recession, though the broadest measure of the economy, gross domestic product (GDP), has been growing.

49% believe the S&P 500 stock market index is down for the year, though the index went up about 24% in 2023 and is up more than 12% this year.

49% believe that unemployment is at a 50-year high, though the unemployment rate has been under 4%, a near 50-year low.

A whopping 58 percent of Americans blame the Biden administration for the economic horror show they’ve imagined. These numbers are usually fatal, because as I keep saying, people don’t vote like Vulcans. They’re more like civic-minded Klingons who cast ballots based on how they feel. Democrats have dazzled us with graphs, charts and all sorts of data, but they’re obviously not putting voters in the right mood. During the next press conference about the economy, Biden could try dimming the lights and playing some Barry White. Desperate measures are needed.

This situation is not unique to America. Almost every incumbent leader and their party are in a political free fall. Canadian Prime Minister Justin Trudeau is doing even worse in the polls than Biden, and Trudeau is young and minty fresh. He has more time than Biden to turn things around, but he’s currently on track for a colossal wipe out from the Conservative Party and what Politico calls its “firebrand populist leader” Pierre Poilievre. (Yeah, that’s not good.) On the upside, UK Prime Minister Rishi Sunak and his Conservative Party are also doomed.

Biden still has a fighting chance precisely because economic conditions are better in the US, and his administration is responsible. Nonetheless, there’s still a chance the unhinged psychopath, coup plotter, confirmed rapist and now convicted felon could win. At least he was only an unhinged psychopath when he beat Hillary Clinton. Do we need to pull out more graphs and charts?

Why is everyone so grumpy about the economy?

Aside from avoiding an actual, real-live recession, Biden has capped the price of insulin, forgiven significant amounts of student loan debt, and expanded access to health care. Yet his approval ratings have buckled under the weight of what Kyla Scanlon dubbed a “vibecession.” Fortunately, Scanlon isn’t a political candidate, as voters usually don’t appreciate having their personal experiences dismissed, even when based in fundamental misperceptions. Biden can’t try the “I feel your pain” approach, because unlike Bill Clinton in 1992, he’s the sitting president. Voters want to see more action than empathy.

Consumer confidence is rising, yet why does it seem like most people I talk to complain about rising prices? If you work in publishing and the arts, you’ve probably heard countless people tell you they simply can’t afford to pay for content right now. We don’t call them deadbeats. We just try to tempt them with subscriber discounts.

It’s been noted that Americans are pleading poverty even as Memorial Day travel rebounded to pre-pandemic levels. People apparently drowned their economic woes with increased tourism. Yes, more people get their news today from social media, which amplifies discontent. Also all the influencers seem happier and more successful than you. The lady in the Homeworthy video talks about “sourcing pieces” to decorate her fancy New York apartment, and you’re so broke you can only “buy things” like a chump.

Lower-income Americans are supposedly richer than ever, but they’re also on the front lines of rising food prices and skyrocketing housing costs. Since 2019, housing prices have ballooned 54 percent, which literally hits people where they live. Mortgage rates have stabilized, but are still high enough to prevent people from buying a home. You might consider that a “first world problem” if you’re a tone-deaf jerk, but for many people, the “American dream” is closely associated with homeownership.

The non-partisan Congressional Budget Office (CBO) determined that goods and services are technically cheaper than they were in 2019. This is because wages have grown faster than prices. Unfortunately, people rarely make this calculation when complaining about the price of eggs. The sticker shock phenomenon is real. People want prices to visibly decrease, but that will never happen, and if it did, it’s the result of deflation, which is what actually happens during a recession. That’s why rent prices dropped in major cities during the pandemic.

The Post ran an interesting story this week about how housing costs are affecting voters in Nevada. Biden won the state in 2020, but Trump is currently leading in far too many polls. D. Carter, a Black woman, paid $1,525 for rent, cable and wifi for a one-bedroom apartment before her monthly rent was jacked up to $2,100. No, she did not also receive a 40 percent raise.

Unwilling and unable to pay the new rate, Carter, who spoke on the condition that her first name not be used, considered buying but quickly realized that with interest rates hovering around 7 percent, she was priced out. She found a new apartment in a decent part of town after months of searching, but said still pays up to 50 percent of her fluctuating $50,000 to $70,000 income from her banking job for rent.

The economy has improved enough after the pandemic that landlords can charge substantially more in rent. That might make sense to people priced out of their homes and neighborhoods, but it doesn’t make them feel jolly. According to the Nevada chapter of the National Low Income Housing Coalition, the Las Vegas metro area is short on housing for about 312,000 people. Construction of affordable housing is a nationwide problem — a combination of those high interest rates plus well-meaning building requirements in many progressive cities like Portland, Oregon.

Catherine Ayres, a 73-year-old with a fixed monthly income of $1,451, has struggled with housing for decades, but during the past four years, she’s shared a studio apartment with two other people.

Minority renters also suffered more during covid because their landlords were more likely to evict them or charge onerous fees if they fell behind in their payments. Landlords in predominately white neighborhoods were more forgiving and even decreased rents. An eviction in your rental history makes it extremely hard to find housing even when your finances improve.

Perception is political reality

What’s interesting is that Biden and many mainstream Democrats do recognize that perception is political reality, at least when it comes to crime. The White House performed the “I Told You So” dance when Portland’s progressive District Attorney Mike Schmidt decisively lost re-election to “tough-on-crime” prosecutor Nathan Vasquez.

“I am committed to ending the open-air drug use, to ending the open-air drug dealing that we have suffered from as a community,” Vasquez said on election night. “I am also committed to restoring that idea that it is OK to hold people accountable and do it in a compassionate manner.”

Technically, Portland experienced a significant drop in homicides and shootings last year, but that reality didn’t save Schmidt. A Biden official said, “Particularly right now, Americans don’t want to feel like things are out of control. Well-meaning ideas have gone too far, and we need a sensible approach.” That approach involves cracking down on immigration and increasing spending for law enforcement.

An anti-crime message in 2022 helped Republicans flip several House seats in New York and possibly ensured their narrow majority. New York Governor Kathy Hochul has since promoted a “tough-on-crime” agenda, dismissing bail reform and even sending the National Guard into the New York subway system. Homeless encampments in major cities don’t sell Americans on a booming economy either. It looks like a Steinbeck novel.

Democrats nationwide have embraced Republican rhetoric about the border rather than pointing out that there is no “border invasion.” Democrats clearly prioritize feelings more than facts regarding these issues. Perhaps the economy is different because the Biden White House fundamentally believes it’s doing the right thing, regardless of voter “vibes.” But “vibes” don’t care about political agendas.

Economist Alex Williams has a good argument about what’s likely fueling economic discontent:

“The economy sucks because, where workers gained leverage, their employers tended to push the cost of that leverage onto customers, which intensified a vicious cycle of service workers and customers getting mad at each other” is my most compact explanation of any “bad vibes.”

Biden and Democrats could acknowledge that the economy is a problem and just blame Republicans for it. It’s literally the approach they’ve taken to crime and the border, but so many liberals are opposed to any economic message that’s not Ricky Martin’s "Living La Vida Loca" at high volume.

“Trump got us in the mess. We’re making it better. Trump and his goons will make it far worse” is both simple and true.