The 2024 Economy, Stupid?
In 1992, James Carville defined the focus of Bill Clinton's presidential campaign as: "It's the economy, stupid." For better or worse, the American people (led by the American mainstream media) generally give the sitting president either a whole lot of credit or they assign a whole lot of blame for whatever the current state of the economy happens to be. So no matter what else is going on, the fate of President Joe Biden in the upcoming election is going to be tied in a big way to how people feel about the economy.
Right now, people don't feel especially great about the economy. By all rights, they should feel better than they do, because by almost every metric the economy is in great shape, having achieved the fabled "soft landing" from all the spikes and dislocations of the COVID pandemic era. However, this hasn't been reflected in public opinion, at least not to the degree which it usually is.
Part of the problem, as mentioned, is the news media, which tends always to spotlight economic troubles in a big way but then gives short shrift to good economic news when it is reported. Bad news sells (or drives clicks, these days) better than good -- that's been true for a very long time. Another part of the problem is the lag time which is built in: people don't feel better about economic good news until they're more sure it is going to take hold (rather than be just a momentary blip). This lag time is roughly (speaking politically) about three months. This is evidenced by the rule of thumb that it is how the economy is doing in the summer that influences people's presidential vote, even if there is a big spike upwards or downwards in economic news in October.
To put all this another way, Biden's got until roughly the end of the summer to improve his standing, and his standing should improve if the economy continues to recover. The real question is whether this will filter through to public sentiment in time or not. And, of course, there are many other political factors which also have an effect on a president's standing in the polls.
There was some good news on the economic front for Biden in December, from multiple directions at once. End-of-year holiday spending was up over last year -- a sign that consumers are still comfortable spending their money. Consumer interest rates began to come down, since the Federal Reserve seems to be on the brink of starting to lower borrowing rates instead of hiking them to fight inflation. And the best news of all was a big spike in consumer confidence.
The last two of those are quantifiable, and taking a look at the charts is interesting. Interest rates for a 30-year mortgage are falling from their peak in October. During the Trump years (pre-pandemic), interest rates wavered between a low of about 3.5 percent to a high of 5.0 percent. When the pandemic hit, interest rates were at the low end of that, and they fell through 2020 and 2021.
The Fed, to combat inflation, began raising interest rates in 2022, and inflation hit its high of nine percent that summer. Mortgage rates went up to 7.0 percent. They cooled off at the start of 2023, dropping to just over 6.0 percent, but then began climbing throughout the year (as the Fed continued to raise the base rate) to hit a peak of 7.76 percent in October.
Since then, they have been falling dramatically, as Wall Street began to anticipate the Fed lowering rates. No drops in the base rates have actually happened yet, but everyone expects them in the next few months and the market is already adjusting. Mortgage interest rates are now down to 6.6 percent and (if the Fed goes ahead and drops rates) will continue to fall for the first half of 2024. That's good news for Biden, but for him to reasonably claim interest rates are under control they will probably need to drop below 5.0 percent (to put them back in the Trump era pre-pandemic range).
The other good news for Biden is less certain to continue, however. The University of Michigan has been tracking the "Index of Consumer Sentiment" for a decades, and their numbers showed a big spike upwards in December. If you look at this indicator over the past 10 years, you can see that when people feel really good about the economy, the index approaches and sometimes exceeds 100, while when people feel pessimistic it can drop down below 50 (these numbers aren't percentages, it is worth mentioning, even though it is tempting to read them that way).
From 2015 onwards, consumer sentiment was fairly high, from the high 80s up to the peak Trump reached, which was just over 100 (it hit 102.4 in May of 2019). Then the pandemic hit, and the metric cratered down to under 72. From there, it rose slowly and stood at 79 right when Biden took office.
Then inflation took off. By the summer of 2022, the index was down to only 50. Since then, there has been a gradual rise, but it has come in fits and starts. It topped 70 (hitting 71.6) in last summer, but had fallen from that high point, down to 61.3 in November.
December, however, showed a dramatic turnaround. The rate rose to 69.7, or over eight points in a single month. That's good news for Biden, but the question is whether it was a holiday bump or whether it will continue in the new year. To help Biden's approval rating, this index would likely have to get above 80 by summertime. Above 90 would be even better, obviously.
The consumer sentiment index is an important one, because it attempts to measure not how the economy is doing in the raw numbers Wall Street uses, but instead how people feel about the economy. Do they feel more positive or more negative about where things are now and where they think they are headed in the future?
We are still 10 months out from the presidential election. If people's feelings about the economy get set in stone by the end of the summer, that gives Biden six or seven months to get people feeling better than they do today about the American economy.
As mentioned, the raw economic numbers are -- with the lone exception of interest rates -- really good and continuing to improve. Unemployment is still at historic lows. Gas prices average around $3.00 nationally, which is way down from their spike in 2022. Inflation is down to 3.1 percent from its high of 9.1 percent in the summer of 2022. If both those indexes continue to fall, people should feel better about how much things cost in their daily lives.
Republicans, from Donald Trump on down, are going to make the economy a big issue in the election -- that has been clear for months. But talking down the economy works best when the public already agrees with the sentiment. If people are feeling better about things, then "stay the course" becomes a much more appealing political message.
The tail end of the economic shocks of the COVID pandemic hit the country hard in the middle of 2022. But since then, things have been improving almost across the board. The public hasn't responded as well to the economic upturn as they historically have, which puzzles economists trying to figure out why this is (they've taken to identifying "vibes" as the reason, which is another way of them saying: "We have no idea why people aren't feeling better when they really should").
This could all turn around in 2024 -- it may already be turning around, if the consumer sentiment numbers are more than just a one-month blip upwards. People's feelings about the economy always lag the reality, and (to complicate things) people's approval of a president lags even this built-in lag. Joe Biden has been leaning in to touting "Bidenomics," but so far not to any noticeable effect in public sentiment. If that is in the process of changing, then the entire flavor of the presidential campaign could shift as well.
The next six months will be crucial, of course. If things generally continue to get better, and if people generally start feeling more optimistic about the future, then Biden's insistence on tooting his own horn on the economy will begin to pay off for him. Of course, nobody knows where things will be by the summer -- six months is an eternity in politics, and anything could happen (domestically or internationally) both to the economy and outside the realm of economics. But if the current trends do continue, Biden is going to have a much better chance of getting re-elected than he does right now.
-- Chris Weigant
Follow Chris on Twitter: @ChrisWeigant
Chris,
Part of the problem, as mentioned, is the news media, which tends always to spotlight economic troubles in a big way but then gives short shrift to good economic news when it is reported. Bad news sells (or drives clicks, these days) better than good -- that's been true for a very long time. Another part of the problem is the lag time which is built in: people don't feel better about economic good news until they're more sure it is going to take hold (rather than be just a momentary blip). This lag time is roughly (speaking politically) about three months. This is evidenced by the rule of thumb that it is how the economy is doing in the summer that influences people's presidential vote, even if there is a big spike upwards or downwards in economic news in October.
Part of the problem, yes, but also a roadmap to the solution. Biden and Dems just have to give everyone an economic history lesson starting from voodoo economics and David Stockton during the Reagan years right through to the Great Recession and Pandemic Economics.
It is so easy to illustrate how Republican administrations have a decades long history of leaving economic messes on the order of magnitude of the Augean Stables, no less, for Democratic administrations to clean up!
Of course, the Dems are not totally blameless in some of America's economic woes over the decades but, compared with the Republican cult of economic failure, Democratic tax and fiscal policy is the veritable cat's meow! Indeed, admitting some economic policy mistakes could be beneficial if done deftly. :)
Hey, Chris! Big congratulations on yet another successful CW Holiday Fund Drive!!!
The next six months will be crucial, of course. If things generally continue to get better, and if people generally start feeling more optimistic about the future, then Biden's insistence on tooting his own horn on the economy will begin to pay off for him. Of course, nobody knows where things will be by the summer -- six months is an eternity in politics, and anything could happen (domestically or internationally) both to the economy and outside the realm of economics. But if the current trends do continue, Biden is going to have a much better chance of getting re-elected than he does right now.
All the more reason why Dems need to talk about the big economic history lesson, ad Bidenitum. Ahem. The bottom line: Dems good for the economy and average citizens; Republicans bad for the economy and average citizens. The numbers really don't lie!
Yes, the presidential election this year will indubitabubbly come down to the economy and, in particular, the personal economy of Americans.
If Biden and the Dems need some help in crafting a winning economic message, then they can defer and refer to this piece by David Fiderer in which he coined the winning phrase, Republican cult of economic failure.
Here's some more help for Biden and the Dems when it comes to crafting a winning economic message that should resonate with a wide swath of voters ...
[Trump and] Republicans' Epic Fail on the Economy
And, here's my favourite ... the guy who put forth the most cogent and persuasive arguments against Republican economic policy and for the Democratic pro-growth strategy for tax and fiscal policy ... he's none other than former Treasury Secretary and all-around Captain America when it came to saving Main Street and the personal economies of every American, along with the American financial system as a whole during the financial crisis of 2008/09, Timothy F. Geithner! Seriously!
If Biden and the Dems would just watch this video and Q&A, then they would have all they need to put a stake through the heart of the Republican cult of economic failure, once and for bloody all!
Caddy,
Where are you? Hope all is well and let me wish you a very Happy New Year!
We have to host another CW Sunday Night Music Festival and Dance Party because I just stumbled onto something this evening that I know you are going to just love!
What was the theme we were talking about doing? Singles? Yeah, and how about we include the B side of singles!? I got two beauties in store for the occasion.
This Sunday is out of the question - it's a Christmas dinner for the team at work. So, how about Jan 21st to kick off the festivities for the first CW Sunday Night Music Festival and Dance Party of 2024! Say YES!
We could even play some YES, no? :)
If people are constantly being told the economy is terrible they may think that most other people are struggling even if they are ok.
At the same time, these overall numbers don't necessarily reflect the economic reality faced by many, or by some regions or some groups--for example, if basic should-be-cheap foodstuffs have gone up in price, or rent, or any other essential. And we know there was a lot of price-gouging during and after the pandemic.
I am trying to remember where I saw an article that said that Republicans say their income is down even when it's up--I thought it was WaPo, but haven't found it to link yet.
The predominant issue is definitely (always) supposedly the "economy" such as it is. Having said all that, isn't it actually also a plethora of other issues that are inextricably associated with the economy? Rhetorical question. Now I will copy myself from another comments section to make my point.
Would it be too much to ask Democrats to campaign in a fashion where they explain how the policies of MAGA Republicans will cost them personally and economically?
Abortion: If our wives, daughters, and granddaughters are going to be forced to give birth, that is definitely going to impact your families' lives and definitely impacts your economy.
Health care: Additionally, if MAGA Republicans take away your health care for Trump's nonexistent plan, that too is a giant impact to your economy.
You get the drill. Biden has so much more to campaign on than the economy; he really does, but it doesn't hurt to explain to people how so many of the other issues impact their economy.
The "price of gas" will seem infinitely trivial when faced with the price of health care you've lost and/or the cost of American families being forced to pay monetarily out-of-pocket for the progeny of someone who raped their wives, daughters and/or granddaughters.
Well worth repeating. :)
Kick[10],
Don't you agree that the 'abortion issue' needs to be better framed by Democrats as being about sexual well-being and that any man who opposes abortion rights should expect to have all sexual pleasure withheld by his lover?
There is one metric that totally overrides all others combined in how people feel about the "Economy", and that is the cash register tape at the grocery store.
"Inflation" may be proclaimed to be "down" (based on the total ignorance that obtains in this world about the true definition of the word), but my weekly grocery bill is UP UP UP EVERY GAWDAM WEEK!!!!!
The sole reason anybody would EVER vote for Biden is that the alternative is worse still, and that's a pretty shaky foundation for any politician to run on.
Elizabeth Miller
12
Don't you agree that the 'abortion issue' needs to be better framed by Democrats as being about sexual well-being and that any man who opposes abortion rights should expect to have all sexual pleasure withheld by his lover?
Are you serious? Is this a trick question?
After having given this some thought, I don't believe the abortion issue should be framed by Democrats as being about sex at all... comparable to the manner in which rape isn't generally about sexual gratification either... but rather generally about a male enforcing power over another, i.e., the perceived domination over others simply by virtue of being male, not unlike a subset of Americans who believe they are superior because of their "white" skin. The abortion issue is one of dominance/control over others.
The way to counteract this utter asinine BS is to explain to voters, our brothers, fathers and grandfathers how this neediness for male domination could affect their wives, sisters, daughters, and granddaughters personally and what it could cost them personally to allow big government to make personal decisions like it's one size fits all... because it doesn't.
It's about freedom from government intrusion into your personal lives, and President Biden should explain that as long as he's president, he will sign no legislation that would take that away. :)
i.e. although sex is involved, it's a distraction from the real problem and so shouldn't be used in any attempts at a solution.
Okay, Kick and Joshua ... must have been under the influence when I wrote [12]
Well, actually, the comment was just too short and left out some important details. Which I have indeed mentioned before but, it seems one has to include EVERYTHING that is even remotely pertinent in EVERY comment these days in order for people to understand the message. Sigh.
So, to reiterate for Joshua and Kick, I believe the abortion rights debate is not and should not be about sex.
Hope that, at least, is as clear as mud.
But, it should most definitely be about power. Indeed, what we are talking about when it comes to men who oppose abortion rights is absolutely about retaining power over women, sexually and otherwise.
As for women who purport to be opposed to women's reproductive rights, well I don't have much time to waste on them. Suffice to say that they are part of the overall problem and probably always will be.
And, my tongue in cheek assertion - that any man who opposes women's reproductive rights should expect to have any and all sexual pleasure withheld from them and just go solo - stands. Ahem.
Having said all of that, again ... I think one of the underlying issues behind the anti-abortion movement stems from a very unhealthy understanding of sex, sexual pleasure and, indeed about the entire reproductive process.
I think this issue has been too long draped in religion and the law and it is high time for women to take back the power they have always had.
Questions, comments, insults?
Caddy,
This Sunday is out of the question - it's a Christmas dinner for the team at work. So, how about Jan 21st to kick off the festivities for the first CW Sunday Night Music Festival and Dance Party of 2024! Say YES!
YES! Absolutely, positively, unequivocally! Jan 21st is a perfect date for it ... I'll make sure nothing else intervenes!
Joshua,
i.e. although sex is involved, it's a distraction from the real problem and so shouldn't be used in any attempts at a solution.
Oh, really. So, what is the real problem?
the problem is individuals thinking it's okay to use other people's bodies to exert power over them. the solution to that is not to use other people's bodies to exert power over them.
Well, I can't argue with that. :)
Joshua,
So, when individuals (read: men who oppose abortion rights) use women's own bodies to exert power over women, what is the solution to that if the solution can't involve reversing that power equation?
kick just told you.
Yeah, Joshua, I read Kick's [14] and I agreed, wholeheartedly, with all that she wrote there. But, unfortunately, that doesn't seem to be enough of a solution or we wouldn't have the problem still today.
I think we need to dig deeper into what Republicans really wish to accomplish on this front with regard to banning abortion and contraceptives and all kinds of other crazy stuff.
I also think we need to bring our sexual beings into the conversation, in a holistic sense.
And, yes, the power paradigm needs to be involved, too.