Americans’ Grim Views of the Decent U.S. Economy Are Perfectly Understandable

High prices for food and gas and elevated interest rates are more visible than more encouraging big-picture indicators.

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A shopper makes her way through a grocery store on July, 2023, in Miami, Florida. (Photo by Joe Raedle/Getty Images)

Dear Capitolisters,

As readers of this newsletter surely know by now, I’m a bit of an economic optimist (and that’s a bit of an understatement). If you gave me $100 and asked me to bet on the long-term direction of the U.S. economy using almost any national metric, I’d bet $90 on “upward” and then go invest the rest in VOO or ITOT (if you know you know). Even right now, I think the post-pandemic U.S. and global economies, while still in their perpetually confused state, will avoid the worst-case scenarios discussed in January. We might even avoid a recession in the U.S. altogether.

That said, I’ve been amazed, confused, and frustrated to watch various economists and pundits look upon Americans’ continued displeasure with the U.S. economic situation and act as if it’s all a media creation or just dumb/partisan square-staters projecting their political preferences upon the obviously great Biden economy. There are plenty of good, sane—though perhaps not economically sound—reasons for lots of Americans to dislike both the U.S. economy today and the president’s claims to the contrary.

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  1. Avatar photo
    BillAZ

    And then there is this;

    https://www.thebignewsletter.com/p/the-price-fixing-economy?r=2lnb1&utm_medium=ios&utm_campaign=post

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    Chris

    I'm not one of those who struggle with the rising cost of living, but I have been there.

    One of the things I respect the most about your analysis, is how you don't dismiss people based on their circumstances or political views. As in this article, you give them the benefit of the doubt. Their difficulties and pain might be real.

    Now, Dispatch, where's that like button?

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  3. Bicosan

    A truly excellent Dispatch article that captures what the rest of the media fails to. This felt like deprogramming therapy after being rescued from a cult. I don't blame other authors for pointing out the positive economic facts (esp. the moderating rate of change of inflation); it's both true and relevant. But then to opine that the average American is a fool for not being happy about it, while blithely ignoring the honky, flashing, in-everyone's-face fact that many classes of consumers have lost substantial purchasing power -- the economic variable they actually "feel" -- really just codes as gaslighting.

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  4. Avatar photo
    Scarlette Tarte

    It's perception. Many Americans, especially MAGA Americans, just perceive times to be better under Trump, than they want to under Biden.

    The economy is good. Wages are up. Hiring is steady and unemployment is very low.

    Gas is fairly cheap. If Americans have a bitch about it, show them European prices for gas...then perhaps they will realize how good they have it.

    The sad fact is, many Americans are not able to assess data so they go on "feelings", which are notorious for being wrong.

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    1. Avatar photo
      JDW

      Try reading the article first.

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    2. Mikehatla

      A lot of us have timelines that go back to the 90's and early 2000's and most of us believe what we see more than what we read or hear. Also, don't underestimate the average American.

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  5. Avatar photo
    Ed

    Good article: I always appreciate the depth, but........ jawboning the economy is a thing, even more since the "it's the economy, stupid" line came out. Back in early 2008, we were recovering from a mild recession and I have always wondered how much Democratic jawboning leading into the election, amplified by friendly press, contributed to the loss of confidence that triggered the great recession. Granted, the structural issues were there, just waiting to collapse, it was going to happen, but when prominent voices are doing everything they can to bad-talk the economy to aid their own political aspirations, it seems like it might have an effect.

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  6. MathewA

    excellent article.

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  7. Midge

    Thanks, Scott.

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  8. Avatar photo
    AlainL

    A few months back I unsubscribed from this column because the Pollyanna articles were irritating me. No number of graphs substantiating a healthy economy could distract from the reality on the ground. I fear that this will be the Dems undoing next year, people want a quick and easy resoltion (it doesn't exist) and Trump is going to promise it to them.

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  9. Bruce Link

    If the government is following energy policies intended to make energy (especially fossil fuels) more expensive, then not showing it in core inflation is misleading.

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  10. Token Liberal

    Scott : On a different topic, the NYTimes recently reported that there is a large and relatively new divergence in life expectancy in this country depending on if a person has been to college (college grads live a lot longer). This would seem in sync with those who think the middle class has been gutted over the past few decades. I know you have argued the opposite. How do you square your view with this death data? Just my two cents, but that topic would make for an interesting column.

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    1. Avatar photo
      JDW

      I can think of a few possible reasons besides economics...
      1. College educated who tend to be more educated in general but not always will work their minds and be more involved later in life. I see a lot of couch potatoes in my family in the other group. Again it's a possible trend not an absolute.

      2. The jobs non-educated people work during their lives are riskier and take a greater toll on the body.

      3. College-educated are more aware of the value of a good diet.

      You can replace college educated with smarter not because they all are smarter but as a group they are smarter. I know plenty of really successful non-college-educated people. An interesting study would be how long they live. So do the studies account for income?

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    2. Avatar photo
      Bel

      I second your request, although I read the Brookings paper referenced in the NYT and it's quite fuzzy.

      It doesn't get into possible causes of mortality differences based on education other then hypothesizing that healthier Americans may be more likely to graduate from college, and, somewhat contradicting that idea, that it's because of our health care system and safety net as compared to European countries with better longevity.

      However the European data is not broken down by educational attainment. They may have their own widening gap.

      The paper does not look at the relationship between income and health, which would be an interesting comparison as there are wealthy people without college degrees and people with degrees whose income is modest. Is it the education that's predictive independent of income, or is income more predictive regardless of education?

      While there is a large mortality gap related to drug deaths, cardiovascular disease and cancer are also driving the widening gap.

      Even in causes of death where total mortality is declining, there is more improvement among the college educated.

      And there's a lot of noise in the data, such as breast cancer being more deadly for college educated women in 1992 because they tended to have children later but since then the ubiquity in screening has largely erased the gap caused by the protective nature of earlier pregnancies.

      Without drilling down to a cause or causes of the growing mortality gap there's no obvious policy path.

      I think the NYT piece paints with an overly broad brush based on the conference paper. Apparently a journal article is forthcoming. Maybe that will have more details.

      So yeah, it would be great to have more expert eyes look at the data.

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      1. Avatar photo
        Scarlette Tarte

        My quick gut reaction to that study is that being better educated helps you make better choices in life.

        Take COVID for example...college educated people got the vaccine...in fact, they get more of the boosters too. But those poorly educated followed conspiracy quack thinking, perhaps unable to discern what was flawed in the research or talking points. They took the vaccine less, and the boosters hardly at all.

        Drug use is another point...being educated you are more likely to make better informed choices about using drugs...how much you can take, which ones are safer than others, how addictive they are , etc. Less educated people may get trapped into addiction, and, although it can, and does, happen to anyone, it may happen to those with less education more.

        In general, I can see where having a better education leads to better choices on everything...food, where you live, what kind of car you drive, what jobs you have etc. It's all interconnected.

        But I do wish they had given us more info in that study. Maybe they will in the future.

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