Stop saying the economy is doing great

In June, 2022, Kyla Scanlon, who educates the public on economics through her Substack and TikTok, created the concept of a “vibeflation,” to describe the uncertainty and vulnerability people felt that led to recession-ish behavior (ie slowing consumer spending) despite economic indicators showing the economy was doing well (decreased inflation, low unemployment). Scanlon’s piece does a good job explaining the roots of the uncertainty and that economic indicators may not always connect with people’s lived experience in the economy.

Unfortunately some outlets took “vibeflation” and leaned into the positive economic indicators without really exploring the shortfalls of those indicators and what they do—or don’t —tell us about the economy. They made half-jokes about how “the vibes are off,” as if the “vibes” were not based on tighter budgets and lived experience. The message changed from “something is off that indicators don’t measure” into: “silly consumer, the economy is doing great!”

The reality is that after years (decades, even) of wages not keeping up with productivity or inflation, middle- and lower-class people finally got some relief in 2020 and 2021. But whatever gains were made have rapidly dissolved because of inflation that is largely driven by corporate greed. What little action has been taken to address price gouging feels pretty half-assed. Walmart has to pay $45 million for mislabeling the weight of packaged produce to overcharge customers. Fine, but Walmart is an almost $500 billion (with a b) company. What will it take to hold these companies accountable? 

We’re also seeing the Democratic Party entangle itself in this mixed messaging on the economy this campaign season. There’s this mythos in the party that the problem with Democrats is they don’t do a good enough job tooting their own horn. If you look at the most recent statement on the economy from the White House, it opens with how great everything’s going:

The problem is, of course, that growth they’re bragging about is all at the top. All these economic growth indicators—NASDAQ, S&P 500, and, to an extent, Gross Domestic Product—are indicators of growth for the nation’s biggest companies. But the U.S. economy is lopsided. More and more of the wealth goes to the top, which leaves the middle class and the poor to fight for scraps.

We also need to interrogate unemployment statistics. We’ve heard countless anecdotes about how companies are supposedly hiring and people are applying and qualified, but they’re not getting their foot in the door. Sometimes those openings don’t actually exist or the company is not actively hiring. Many of the jobs are low-paying or have poor working conditions. Others are looking for someone with the exact skillset they need and are not willing to train. Or, who knows? Companies are apparently now making these decisions using AI—essentially a black box. What could go wrong?

Anyway, there are two ways that people stop getting unemployment benefits—either they get a job (regardless of how good a fit it may be, or if it actually pays the bills) or they just give up. Retire, start a business, or cobble together a living freelancing. Low unemployment is better than high, but it does not mean that the economy is going great. 

Anyway, back to that White House statement. Next, there’s the meat of this press-release sandwich, the “I feel for you” section:

Couple quick notes here: On the prescription drug prices, that only applies to Medicare Part B (a concept in itself that is mind-numbing). Because Congress has never passed legislation that would effectively reign in pharmaceutical companies, all future Presidents get to brag about taking on prescription drug prices, even if it's for a sliver of the population.

It’s sad that we need junk fee legislation, but I’m all for it as long as it gets enforced in ways that actually have an impact on banks’, credit cards’, and airlines’ bottom lines. This has broad potential but highlighting air travel and banks feels very focused on the middle class.

The White House's claim about housing costs refers to this plan (though the plan says to build 2 million homes). A lot of elements of this plan could be helpful, but it has to get past Congressional Republicans first. Also, while building housing is one tool, I’m tired of it being the only tool we’re willing to deploy. What will it take for us to seriously regulate housing so it’s used for living, not investment?

Speaking of Republicans, now we get to the final section (you’re supposed to start boo-ing):

I essentially agree with this and still find the formula obnoxious. The pivot from “the economy is strong” to admitting it’s not working for everyone… which one is it? An economy where most of the wealth is being generated for the already-wealthy is not strong. It is prone to social collapse. And promising to be slightly better than the other party is not enough anymore.

I’m not alone in no longer buying this —look at the number of people who don’t vote and why. After writing about Democrats’ lack of sustained investment in rural Wisconsin, I thought I’d do some reporting and write about it for The Progressive. Speaking with Nicolas Jacobs, co-author of The Rural Voter and reading Katherine Cramer’s The Politics of Resentment, I learned the idea that rural voters have been huckstered into voting against their economic interests is not true. The talking point that rural voters vote for Republicans on social issues and ignore economics was popularized by Thomas Frank’s What’s The Matter With Kansas?, a book I started to read in college but stopped because it was obnoxious and condescending.

(“But Christina,” you say, “Your writing is obnoxious and condescending.” Sure, but I’m a nobody who’s very consciously punching up at people in power for how they wield it, or fail to. Frank is punching down at working-class and poor people because he doesn’t understand why they vote the way they do.)

In fact, rural voters are very conscious of economics when they vote. One thing I got wrong is that while former President Nixon’s Ag Secretary Earl “Rusty” Butz is attributed for championing a “go big or go home” agricultural policy that has devasted family farms, that shift was initiated before him and sustained by both Republicans and Democrats. 

The nail in the coffin for Democrats among rural voters was when former President Bill Clinton signed the North American Free Trade Agreement (NAFTA). Clinton not only betrayed Democrats’ labor base, he also gutted domestic manufacturing, which had become the lifeblood of rural communities amid the decimation of family farms.

When people say voting for Democrats is in rural communities’ best interests, they’re thinking of the rise and fall of the general economy and support for social services. But that rise and fall at large has little impact in rural communities. It’s a slight rise and dip in an overall trajectory of decline. Reading this reminded me of interviews with residents of several divested communities (poor, urban, Rust Belt, Appalachia, Black, Indigenous, etc.) who are also disillusioned with politics.

It’s only recently that this disconnect has migrated to the middle class as well. As long as the systems that undergird our current economy continue, fewer and fewer people reap the benefits of when the economy is good, but notice a slightly escalated decline (after decades of decline) when things go south. 

The Politics of Resentment documents the perception from rural voters that they do not get their fair share of resources compared to urban areas. (Really both urban and rural areas are screwed in favor of suburbs, but that’s besides the point.) Rural communities do receive an equal distribution of funding from the state, but then, Cramer asks, are there better ways that money could be spent? Generally, rural voters would rather see their labor rewarded than an influx of social services (we can debate the larger forces behind those attitudes, but the result is the same); they want real changes that will invigorate their communities with good-paying jobs without displacing current residents. I think Gov. Tony Evers has done a decent job of putting funding into rural communities’ specific needs, which is probably why he did so well in those areas in 2022. 

But there’s only so much state government can do. We need the federal government to take people’s disillusionment with the economy and politics seriously. We don’t need bumps in GDP or the stock market. For a growing number of Americans those metrics are meaningless. Telling us you’re doing a good job based on them comes across disconnected at best, gaslight-y at worst.

We need The New Deal levels of change, big and bold enough that conservatives will spend decades solely focused on dismantling them and never fully succeeding. (::Laughs in Social Security, for now::) The problem isn’t that Democrats don’t brag about their accomplishments enough; it’s that they’re not thinking big enough for the problems we face. If you did more, we’d know about it. No horn tooting needed.