Most depressing economic news yet?

Actually, the economy is pretty fantastic.  What’s so depressing is how grievously misinformed most Americans are about this.  The Guardian is out with a new poll and the results are just baffling:

Nearly three in five Americans wrongly believe the US is in an economic recession, and the majority blame the Biden administration, according to a Harris poll conducted exclusively for the Guardian. The survey found persistent pessimism about the economy as election day draws closer.

The poll highlighted many misconceptions people have about the economy, including:

• 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…

Many Americans put the blame on Biden for the state of the economy, with 58% of those polled saying the economy is worsening due to mismanagement from the presidential administration.

The poll underscored people’s complicated emotions around inflation. The vast majority of respondents, 72%, indicated they think inflation is increasing. In reality, the rate of inflation has fallen sharply from its post-Covid peak of 9.1% and has been fluctuating between 3% and 4% a year.

Meanwhile, strong majorities say they are personally doing just fine, but they are convinced the national economy is awful:

Drum’s take:

This is insane. Even half of Democrats believe this nonsense. And it’s not as if it’s a close call, with the economy sort of flattish but technically not in recession. In fact, the economy is running so hot that the Fed is scared to reduce interest rates even a quarter of a point.

For the record, over the past 12 months:

• The unemployment rate has averaged 3.7%, the lowest 12-month period in more than 50 years.
• Inflation has averaged 3.4%. Inflation for groceries has averaged 1.1%.
• GDP has grown 3.0%.
• The stock market has gone up 25%.
• Consumer spending has increased 3.1%.
• Total employment is up 1.8%.
• Wages are up, private investment is up, and labor force participation is up.

All of these numbers are adjusted for inflation, of course.

A few days ago, Annie Lowery had an Atlantic piece trying to figure out why Biden is getting no credit for the good economy.  Plenty of theories, but, honestly, none are all that compelling. It concludes, thusly, but that still doesn’t explain what we are seeing in these polling numbers:

Why is the link between the economy and political sentiment fraying? Ironically, the dramatic improvement in material well-being over the past 50 years might be part of the answer: As countries get richer, voters have more latitude to vote their values, putting topics such as environmental protection, LGBTQ rights, and racial equality ahead of issues such as taxes, jobs, and wealth redistribution. This election cycle, voters might cite the economy as being the most important issue to them when talking to pollsters and journalists, but they may ultimately show up to vote (or change their vote) on the basis of another issue—abortion, say, or immigration.

Plus, American voters have become more partisan in recent decades—more likely to be immovably aligned with one party or another, and to see their political affiliation as a major component of their personal identity. Polarization “attenuates” the effect that the economy has on elections: Reliable Republicans just aren’t going to vote for Biden, and reliable Democrats just aren’t going to vote for Trump.

That leaves a sliver of persuadable voters. Drutman describes these folks as “disaffected from both parties, and mostly disengaged. They skew less wealthy, and younger, than the rest of the electorate. They defy easy ideological categorization. They vote sometimes, if they can be convinced the stakes are high enough to pay attention, or a new candidate breaks through and energizes them.” At the moment, neither candidate seems to be doing a great job of engaging those pivotal voters, many of whom don’t seem to like either of them.

Meanwhile, it is just mind-blowing to think that our country may elect one of the worst possible human beings with a demonstrated disregard for the rule of law and democracy because the incumbent president is being “blamed” for a poor national economy that is actually in great shape.  Good grief!