Why aren’t Americans jumping for joy about the economy? Pundits have come up with the answer: Americans just don’t get how good they’ve got it.
“You don’t want to say that Americans are stupid,” Paul Krugman recently wrote while pondering this question, before quickly suggesting this was the case anyway. There are “huge gaps between what people say about the economy and both what the data says and what they say about their own experience,” Krugman remarked, blaming partisanship, the media, and economists’ predictions for this gulf in perception.
He’s far from the only one. In a piece titled “America Is Doing Just Fine,” millionaire MSNBC talking head Joe Scarborough pointed to macroeconomic figures like GDP growth and the size of California’s economy to insist that “your country is doing pretty damn well.” In a recent appearance on Stephanie Ruhle’s show on the network, economist Justin Wolfers assured viewers that it was all just the warping effect of partisanship and that Americans simply “tell themselves stories that are completely at odds with reality.”
Let’s give these commentators their due: it’s true that there are many bright spots in this economy. The 2021 stimulus worked, combining with the unusually generous pandemic relief programs to pull the country away from the economic cliff and give a shot in the arm to the personal finances of many American households. What’s more, it looks likely that contrary to neoliberal doomsaying, the inflation that followed the stimulus (when it wasn’t being driven by the shocks of the Ukraine war and corporate greed) really was simply a temporary side effect of this spending, with inflation recently easing despite a lack of job losses. Unemployment is low, those at the bottom saw the biggest wage gains, and income inequality has actually narrowed for the first time since Richard Nixon was president.
But as heartening as all this is, fixating on these metrics masks just how badly the US political economy continues to fail the people it’s meant to serve.
More than two million people have lost their Medicaid coverage as of mid-July since President Joe Biden unwound the pandemic emergency declaration, many of them simply thanks to administrative errors, with millions more tipped to lose the affordable, publicly provided health insurance coverage in a country where not having it can mean bankruptcy or death. The end of the declaration also triggered food stamp cuts that deprived forty-two million Americans of an average $90 a month, even as high as $250 a month.
Evictions are soaring around the country, more than 50 percent higher than the pre-pandemic average in some cities, as the protections renters enjoyed during the emergency have similarly ended. As a result, homelessness has shot up nearly 40 percent from last year in major cities like New York and Chicago, an understatement of the problem since cities like San Francisco and Seattle, where the crisis is at fever pitch, weren’t included in that particular count. Meanwhile, the student loan repayment pause that gave households financial breathing room to the tune of hundreds of dollars a month is now likewise kaput thanks to the White House’s June debt ceiling deal.
Childcare — which has gone up 220 percent in cost over the past thirty-three years and is leading women to drop out of the workforce to save money — is set to get even more expensive this September when federal funding for providers is due to run out, another pandemic-era welfare policy started under Donald Trump that will sunset under the current Democratic president.
While the Inflation Reduction Act will eventually lower prices for some prescription drugs when that provision kicks in three years from now, at the moment, they’re so expensive that nine million people have failed to properly take their medication as a way to trim costs. The highest share of adults (28 percent) since 2014 skipped medical treatment due to cost last year, while Obamacare premiums went up 3.4 percent this year after three consecutive years of falling.
The pundits insist that all that’s happening is that Americans are expressing how they feel about the economy, not what they feel about their own, supposedly fantastic personal financial situations. But this isn’t borne out by recent surveys.
A March poll found 70 percent of Americans are financially stressed, with 58 percent living paycheck to paycheck. Meanwhile, the Federal Reserve’s ten-year-long “Survey of Household Economics and Decisionmaking” found the proportion of those feeling worse off had spiked fifteen points this year to the highest level in the poll’s history, while the share reporting they were doing “at least ok financially” dropped by the largest number on record from the previous year’s high.
A different March poll found that 60 percent have no retirement savings account, while 45 percent can’t cover a $1,000 emergency. In fact, a Fed survey conducted in October last year and released in May paints an even more dire picture, with 37 percent unable to even cover one worth $400. According to another, nearly a third of Americans report a net worth of zero or in the negatives, including about a fifth of those aged fifty-nine and older.
A poll released by Provident Bank in March has 17 percent of Americans with no savings at all and an uptick in those who report spending hundreds more per month on groceries. The US Census Bureau’s Household Pulse Survey for June had nearly twenty-seven million Americans reporting not having enough to eat either sometimes or often, 12 percent higher than the same time last year and 4 percent more than even the month before.
If we’re to believe the pundits, these people are all delusional. Their lack of savings, inability to afford food or health care, feelings of financial stress, or even experience of being thrown out of their homes — they’ve simply made it all up because a Democrat is in the White House. Well-paid commentators on cable news and legacy papers, after all, know what’s going on with your financial situation better than you do.
It’s not hard to see what’s going on here. There’s an election coming where Trump or another scary Republican will be on the ticket, and there is a pronounced lack of enthusiasm, among both rank-and-file Democrats and big-money donors, for the Democratic incumbent. There’s a very real risk they’re going to screw this up.
And as always, rather than pushing the president to do more to protect working Americans and take on corporate greed, and thereby give them an actual stake in the election result, the Democratic machine has decided instead to blame the ignorant masses for not realizing how great their leader is, preemptively absolving themselves of any blame for what happens next year in the eyes of loyal party voters, while lulling those same voters into self-assured inaction.
The Biden stimulus worked, as many pro-Democratic pundits and left-leaning economists said it would. The problem is that this alone was not enough to fix the deeply rooted, structural pain that’s plagued the country long before the pandemic, and there seems to be little appetite to pressure the current White House to try.
If pundits want to spend their time assuring liberal readers that it’s the voters who are wrong about this economy, that’s their prerogative. But let’s not pretend this is much more than political messaging driven by election fears. In the meantime, there certainly are Americans out there telling themselves stories at odds with reality; they just happen to all be in the media.