Hampton Roads Community News
The Economy: Reality vs. Perception
Despite objective economic improvements, there’s a significant gap between public perception and reality. This divergence is influenced by factors like lingering inflation concerns and political views. While the economy is currently thriving, people’s beliefs are shaped by media and political influences. Democrats may need to adopt more proactive messaging strategies to bridge this perception-reality gap.
By Wornie Reed, Ph.D.
By objective measures, Americans are doing much better economically than they were nearly three years ago when Joe Biden took office. Yet, according to polls, 58 percent of Americans say the economy is worse, and Biden’s policies are the reason.
“There’s been this unprecedented gap between what the data shows us is going on in the economy and what people think is going on in the economy,” said the nonpartisan Economic Policy Institute president. “There’s this disjunction between reality and perception that’s as large as I’ve ever seen in my career,” said an economist at the University of Michigan.
What’s going on here? Let’s look at some of the numbers. In January 2021, the beginning of Biden’s term, the economy was problematic.
Donald Trump’s tax cuts, which benefited the wealthy and not the poor and middle class, created an explosive rise in the national debt of 39 percent. It made a similar 39 percent rise in estimated annual deficits.
During Donald Trump’s four years as president, the economy lost 2.9 million jobs, and the unemployment rate increased by 1.6 percent to 6.3 percent. Of course, some of this was because of the effects of the COVID epidemic, which was made worse by Trump’s inattention to it. The number of people lacking health insurance rose by three million.
Now, in the summer of 2023, the economy is thriving. Biden’s first two years in office were the strongest two years of job growth in U.S. history. The economy added 10.7 million jobs in Biden’s first two years, putting the total 1.2 million higher than before the pandemic.
Inflation has decreased for 11 straight months from a high of 9.1 percent in June 2022 to 4.0 percent in May of this year. Unemployment has been at its lowest level in about 50 years, at 3.5 percent for the past 18 months. And the Black unemployment rate reached historic lows under Biden, currently at 5.3 percent.
Real wages (meaning adjusted for inflation) are rising. Consequently, despite lingering inflation issues, personal spending continues briskly.
Yet, in a recent CNN poll, nearly a quarter of Democrats said Biden’s policies have worsened economic conditions, while 91 percent of Republicans thought so. Incredibly, a recent survey from ABC News and the Washington Post found that 54 percent of Americans said former President Donald Trump did a better job handling the economy when he was in office than Biden has done.
Why do we have this disconnect between perception and reality? Although inflation has slowed, it is still a factor in Biden’s economic approval ratings, said the director of the Surveys of Consumers at the University of Michigan. She added, “We track people who have heard negative news about inflation … Over the past year, that number has been much higher than in the 1970s and 1980s, when inflation was so much worse.”
Democratic operatives provide a variety of explanations for why voters do not credit Biden for the economy. They include inflation remaining elevated and interest rates making home buying difficult. One observer said, “There is evidence that voters’ views on the economy are shaped as much by their political views as by personal experiences.”
It is becoming increasingly important to understand how some political views are influenced. Right-wing politicians and radio and television personalities feed the public a continual diet of right-wing propaganda. They exemplify an old comedian’s joke, “Who will you believe, me or your lying eyes (and experiences)?
Unfortunately, this propaganda war is one-sided. Democrats and liberals tend to think people arrive at their political positions independently through their beliefs and thoughts. However, these beliefs and ideas are influenced by what their favorite media tells them.
Right-wing operatives know that if you want someone to know something, you tell them. And you tell them over and over (whether true or not). And you do it year-round. The other side, i.e., liberals, should realize this and not just depend on Biden to make the argument during an election campaign. That is a losing prescription.
