Bernstein: The good economic news of 2017

As usual, it's time for Republicans to believe that the economy is booming - and Democrats to get pessimistic about it. The Huffington Post's Ariel Edwards-Levy has some fun poll results demonstrating exactly how that is happening. Virtually all surveyed Donald Trump voters believe - incorrectly - that the economy added more jobs in 2017 than in 2016. A plurality of Hillary Clinton voters believe the opposite.

Overall, a plurality of people surveyed believe more jobs were created in 2017 than in 2016. But when given a stronger prompt, the picture changes a bit: When people were asked whether more jobs were created in Barack Obama's last year or in Trump's first year, the numbers flip, with a narrow plurality crediting Obama. There are several things going on here. One is that people in general probably believe (correctly) that, overall, 2017 was a better year for the economy and also may have heard that the official unemployment rate went down, and concluded (incorrectly) that all the economic and employment news must have gotten better as well.

Another thing is that a stronger partisan prompt has no effect on Trump voters in this case because they don't need it. It seems likely that Republicans in 2017 were more likely to listen to good economic news and ignore the bad, and since all in all there was more good than bad, they would up thinking everything was good.

From 2010 through 2016, as the mild but steady economic recovery chugged along, those same Republicans almost certainly underrated the economy - just as Republicans tended to deny that the U.S. had entered into a recession during the first half of 2008, when George W. Bush was president. That was an impressive feat of cognitive bias, but it's not the worst one I know about. Democrats during Ronald Reagan's presidency somehow convinced themselves that inflation actually rose while that Republican was in the White House. The good news is that despite all that, economic fundamentals still have an impressive effect on election results, which gives incumbent politicians a strong incentive to lift up the economy (and in the process presumably make people's lives better).

Jonathan Bernstein is a columnist for Bloomberg View.