Krugman: Have Americans forgotten the spring of 2020?

Are you better off today than you were four years ago? Honestly, I didn’t think Republicans were going to try replaying Ronald Reagan’s famous line, since so much of the GOP’s 2024 strategy depends on a sort of collective amnesia about the last year of Donald Trump’s presidency. Is it really a good idea to remind voters what the spring of 2020 was like?

For it was a terrible time: It was a time of fear, with COVID deaths skyrocketing. It was a time of isolation, with normal social interactions disrupted. It was a time of surging violent crime, perhaps brought on by that social disruption. It was a time of huge job losses, with the unemployment rate hitting 14.8% that April. And do you remember the great toilet paper shortage?

Also, when Reagan delivered that line in 1980, things were pretty bad, with 7.5% unemployment and 12.6% inflation, and the 1979 gas lines were still fresh in memory. Today, unemployment is below 4% and inflation is around 3% (and probably, despite some noisy recent statistics, still heading down).

Some observers, however, tell us to ignore fancy statistics indicating that America is doing pretty well. Americans’ lived experience, they say, is that it’s still a lousy economy. And isn’t the customer — or in this case the consumer — always right?

Well, I do not think that word, “experience,” means what they think it means. It’s true that most Americans have a negative view of the economy. But people don’t directly experience the economy. What they directly experience are their own financial circumstances — and most Americans are feeling relatively positive about their own finances.

Before I get into the numbers, let’s talk about what we’re capturing when we measure consumer sentiment, either in opinion polls or in regular surveys conducted by the University of Michigan Surveys of Consumers, the Conference Board or Civiqs. For the most part, these surveys don’t ask about consumers’ personal experiences; they ask for their views about the economy overall — that is, what they think is happening to other people.

So what happens if you do ask about personal experience?

I’ve been struck by the results of swing-state polls being conducted by Quinnipiac University, which ask respondents about both the national economy and their personal financial situations. In the latest poll, of Michigan voters, only 35% of people said that the national economy was excellent or good, while 65% said it was not so good or bad. But when asked about their personal finances, the proportions were basically reversed, with 61% saying that they were in excellent or good shape and 38% saying they were in not so good or bad shape.

A January poll of Pennsylvania voters produced almost the same results.

It’s not just Quinnipiac. Other evidence points to a similar disconnect between perceptions of the economy and what people see in their own lives. For example, a September Harris Poll conducted for the Guardian found a narrow majority of Americans saying that unemployment was near a 50-year high when, in fact, it’s near a 50-year low; but in the same month, the Conference Board found three times as many Americans saying that jobs were “plentiful” as said they were “hard to get.”

Oh, and the University of Michigan asks consumers to compare their personal financial situation now with that of five years ago: In January, 52% said it was better and 38% said it was worse.

So people saying that lived experience contradicts the official data haven’t really done their homework. To the extent we can measure Americans’ personal experiences, as opposed to what they say about the economy, it seems to be quite positive and more or less in line with the macroeconomic indicators.

There may be multiple reasons for this disconnect between personal experience and narratives. Partisanship is clearly a major factor: Supporters of both parties tend to be down on the economy when the opposing party holds the White House, but the effect is much stronger for Republicans. Even though inflation has dropped, the inflation surge of 2021-22 may still be weighing on economic perceptions. And for what it’s worth, news reporting on the economy, as measured by the San Francisco Federal Reserve, was extraordinarily negative last summer, comparable to the depths of the Great Recession, although it has been more positive recently.

Whatever has been going on, it’s important to understand that the political challenge facing Democrats is not that they have to overcome a bad economy. What they need to overcome instead is the false narrative that the economy is doing badly.

How can they do this? I’m not a political strategist, but even I can see that telling voters that their perceptions are skewed would come across as condescending. But reminding them just how bad 2020 was, and arguing that President Joe Biden inherited an economy and a society badly damaged by the pandemic and has led us through the aftermath to a much better place just might work.

Paul Krugman is a columnist for the New York Times.

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