One of the great mysteries of life in America in 2024 is why the public thinks the economy sucks, when it obviously doesn’t. Part of it, of course, is the unpleasant novelty of inflation. Is there more to it than that?
Consider the following examples:
Exhibit A is a relatively affluent retiree. He has done well in the Biden years. His house is worth almost twice what he paid for it. His investment portfolio has done well, too. His net worth is far higher than it was in 2020. His Social Security payments were protected from inflation by a COLA. His life is good.
But he is a Trump voter for culture war reasons. He gives Biden no credit for the increase in his net worth, which is actually a reasonable conclusion, since the federal government had little or nothing to do with the soaring value of his house. In addition, he experiences higher gas and grocery prices every day, while the increased value of his investments is just background music to him. As a result, even though he has done well in the Biden economy, he thinks it sucks.
Exhibit B is a young minimum wage worker. In the early Biden days, she did well, as a result of the stimulus and the expanded welfare state. Then inflation took off, and her real income went down, even though she found a better job with significantly higher wages. Today, her real wages are going up, but she is still struggling with the effects of past inflation–most notably, higher housing costs. She thinks the economy sucks, too.
Unlike our affluent retiree, our young worker experiences higher housing prices on a daily basis. She blames Biden for this, even though he had nothing to do with it. Housing prices are a function of increased demand for space arising from the pandemic and supply restrictions caused by local and state government regulation and shortages of labor and materials.
What is the message here? Biden is losing the public relations battle on the economy for reasons he cannot control. His only hope is that people get used to the new status quo on prices, see that Trump will only make matters worse, and vote accordingly.