Comment: With Bidenomics working, why are voters sour on economy?

By Jonathan Bernstein / Bloomberg Opinion

Inflation is receding, unemployment is at or near record lows, U.S. growth continues at a solid pace … and Americans are deeply pessimistic about the economy.

More than half say it is getting worse, while an additional 28 percent say it is not getting better. Just 37 percent of Americans approve of the way President Biden is handling the economy.

The good news for Biden is that voters tend to have short memories. What matters for his reelection is not what voters think of the economy now, but what they will think of it a year from now.

(Of course, the economy doesn’t entirely determine election outcomes, and if Republicans nominate Donald Trump, it’s possible that it will matter less than ever in 2024. Still, at least so far, perceptions of the economy appear to be driving Biden’s unpopularity.)

The bad news for Biden is that if voters don’t think this economy is good perhaps they still won’t change their minds in a year, even if the economy improves.

Biden’s reelection depends in large part on the question of whether he can change voters’ minds. And the answer depends in large part on why there is such a gap between economic perceptions and reality. Here are few possible explanations.

Time lag: The most likely explanation is also the most simple; it takes time for the public to trust that better times will last. The relevant data are the brief pandemic recession of 2020 and surging inflation in 2022. That adds up to almost three years of economic disruption, against only a few months of relatively unqualified good times. If this is the explanation, then continued economic growth, coupled with diminishing inflation, should start yielding results in another year or so.

Inflation: Economists look at a lot of statistics, of course, but voters care a lot about prices. So while other measurements may be improving, even moderating inflation rates — in the 3 percent to 6 percent range — are still perceived as a high. If it’s true that poor perceptions of the economy are a result of heavily weighting current inflation levels (as opposed to a hangover from last year’s very high inflation), then future perceptions of the economy will depend disproportionately on lower inflation all the way to the Federal Reserve’s 2 percent target.

The pandemic: This is related to the time-lag explanation: Voters appear to have moved on from their concern about the coronavirus, with almost no one rating the pandemic as a top issue; yet such a devastating calamity is bound to have an effect on the national mood, even after it has passed. So the poor perceptions of the economy could be just a reflection of a generally sour national mood, which may help explain other episodes in the larger culture as well. If so, this probably will fade going forward, which could help economic optimism replace pessimism.

Partisan polarization: As the CNN poll illustrates, there is a strong partisan divide when it comes to the economy, with Republicans convinced it has collapsed; and some even reporting changing their personal behavior in response (such as cutting down on driving). That’s correct, but it’s also true that Democrats have mixed views of the current economy. Partisan polarization may explain why it’s harder to get the kind of overwhelmingly positive economic sentiment that propelled huge landslides in 1964, 1972 and 1984; but it’s at best only a partial explanation of what’s happening now.

The media: Both journalists and academics have noted a media bias that all economic news is bad, a norm breached only when the news is very good for quite a while. And there are signs that the good news and expert opinion is breaking through, especially in the last few weeks. It almost goes without saying that the media helps shape public opinion, so if their portrayal of the economy becomes more positive, then perceptions of the economy should improve.

Something else? As a political scientist, I feel duty-bound to note that political scientists have never been able to identify exactly which economic indicators predict presidential approval and elections. Usually that’s not a problem, because most of the economy runs together; if job growth is solid, then so is personal income, overall economic growth, and so on. But it’s certainly possible that there is some key economic indicator out there that economists and political scientists have overlooked but which matters a lot to voters. I think this explanation is unlikely. But as I said, I feel obligated to raise the possibility.

I’m more confident predicting that, if good times continue, voters will eventually realize it, and the president will benefit. If the economy stalls, of course, then none of this will matter for Biden, and there’s always a chance that perceptions won’t change fast enough to help him next year. Either way, if he wants to win reelection, he will need to persuade voters to see the economy more positively than they do now.

Jonathan Bernstein is a Bloomberg Opinion columnist covering politics and policy. A former professor of political science at the University of Texas at San Antonio and DePauw University, he wrote A Plain Blog About Politics.