As we gear up for the next presidential election, various pundits are puzzling over how people can be dissatisfied with the Joe Biden economy. Some of this puzzling, such as that focused on what survey responders actually mean when they answer generic questions about the economy, is fair enough. Personally, I think these surveys are not very insightful, because so many respondents clearly use them as proxy questions about whether they like the president or not.

However, other puzzling on this question, such as that which accuses the Left of being deliberately unfair and ridiculous in its assessment of the economy, is misguided and based in part on people talking past one another on this issue.

There are at least two different ways to talk about whether an economy is good or bad, and thus whether and to what extent it has gotten better.

The most common approach you see in the national media is to talk about what is essentially just the management of supply, demand, prices, employment, and other similar macroeconomic variables. In this account, a good economy is one that is performing as well as it can within the constraints of the existing economic system, which essentially just means that a good economy is the one where fiscal and monetary policy is keeping the pump properly primed.

Another approach to evaluating the economy, which you see more often in left policy circles, is to talk about the economic system, economic institutions, the rules of the game, or whatever else you want to call it. In this account, a good economy is one where the underlying institutions that govern things like the welfare state, labor market, and ownership are set up properly, and a given government’s economic track record should be evaluated primarily according to the extent it moved those rules in the right direction.

What we got out of the Biden administration, legislatively speaking, was a third tranche of COVID stimulus, an infrastructure bill, and a climate bill. There were a few tweaks here and there to welfare-state and labor-market rules, but in general the problems with those economic policy areas have gone unresolved.

This is not because Biden never promised to do things in these areas or because Biden made no effort. Biden supported and urged the taking up of the Left’s leading labor market reform demand, the pro-union PRO Act. He also supported and tried to pass the Build Back Better legislation that would have made changes in various welfare policy areas, including family benefits and home care benefits.

But these things did not pass. Under the usual canon of Democratic apologism, the Left’s disappointment at this failure is not supposed to be waved off by saying, actually the economy is good, but instead by saying, the cause of the failure is a handful of moderates in Congress, not Biden or the Democratic Party writ large.

Of course, this conflict is not purely rooted in the ambiguity of language. There definitely are people who think that the underlying economic system is basically fine and that all we really need is to run the macroeconomy hot. After all, if monetary and fiscal policy is dialed in, employment goes up, making welfare institutions less important, and labor markets tighten, making substantive labor regulation less important.

But this is an actual contestable argument about what matters for the economy, broadly defined, and it is not self-evidently ridiculous to reject it. In fact, I reject it and have basically the opposite view, which is that macroeconomic management is highly overrated because, even when dialed in perfectly, our bad labor market and welfare institutions guarantee a lot of miserable outcomes.

Beyond these points about the difference between macroeconomic management and the rules of the economic system, the economy-is-good discourse also seems to misunderstand how often individuals churn in and out of economic positions in any given year, something that guarantees that a large swathe of the population is going to have a relatively worse experience with the economy no matter how the economy is faring overall.

To illustrate this point, I used the CPS ASEC to determine whether an individual’s family-size-adjusted, inflation-adjusted disposable income (SPM Income) increased or decreased from the year before. Then I determined what percentage of individuals saw their income increase from the prior year and what percent saw their income decrease.

In a typical year, over 45 percent of people see their income decline from the year before for one reason or another. Since Biden got into office, that number has actually gone up 15 percentage points. This probably reflects the unwinding of the COVID welfare state and inflation, which were one-off events, but nevertheless not great experiences for many.

In any event, the insistence that the economy is just obviously good and that grievances against it are necessarily rooted in bad motivations or perpetual goalpost-moving is really just lazy punditry. If you want to, you can certainly find some people who are motivated in that way. But you can find pretty much anyone motivated by anything if you want. There are good reasons why someone may be dissatisfied with the Biden economy, and nitpicking and mocking that perspective is not very useful.