Are You Better Off Than You Were 4 Years Ago?
It’s the Economy, Stupid! Or is it?
As I write this there are a little over 4 months to go until the Presidential election. Does that seem sooner than you thought? Does it sound better if I say 19 weeks? No? How about 139 days? Play with the numbers all you want, it’s just around the corner, and if you aren’t suffering from a political version of Stockholm syndrome, you’ll want to answer this question: “am I better off than I was 4 years ago?
Of course, “better off” is subjective and each of us will make that judgement based on the issues that we feel are the most important however the polls can provide insight into the most important issue of the “Average Joe” (Joe and Jane Sixpack, Lunchbucket Joe, Ordinary Jane, pick your favorite monicker).
Both Gallup and Statista have conducted polls but Gallup has done a better job of grouping the issues into “economic” and “non-economic” categories.
Finding a balance between too many and too few categories can be tricky but it's safe to say that if fewer than 10% of those polled mentioned an issue as the most important problem it can safely be ignored. That leaves:
Economic Problems at 36%
Immigration at 27%
The government/Poor leadership 18%
Economic Problems
“Economy in general” is the number one issue but is too vague to grade. Is it the stock market? Inflation? Unemployment? Inequality? It’s all these things and the reason why it was separated from the “non-economic problems” in the first place. No single measure works, but GDP growth and unemployment together may come close as they provide an overview of how the economy has performed at a high level and provide a measure of citizen participation, so starting here makes sense.
Compared with other advanced economies the US has done well over the last few years, outperforming every other country.
However, while “keeping up with the Joneses” might matter when you’re doing well, the measure for most is “how am I doing?” The answer, at least from a real GDP standpoint, is that after the rough years of COVID, the US has done well, returning to a growth rate in line with that seen from 2009 and 2019.
If the economy is growing again, how is this affecting the average voter? The US unemployment rate in May 2024 was 4%, 0.2% higher than it was in August of 2023. The graph below shows that unemployment, like GDP has returned to “normal” levels, and while the “Monthly Growth in Total Nonfarm” jobs looks solid, it’s important to remember that over 20M jobs were lost in April of 2020 so a lot of this is recovery rather than long-term growth.
The participation rate, “the proportion of the population either looking for a job or already holding a job” appears to be returning to normal as well.
Despite GDP, employment, and the participation rate returning to normal, many people view the economy as a major issue which is likely due to the final economic problem, the “High cost of living/inflation.”
A quick glance is all anyone needs to see that inflation has been unusually high in recent years. In fact, you must go back to the early 1980s to see levels similar to what we’ve seen over the last few years. The administration is quick to point out that inflation appears to be returning to normal having hit 3.27% in May, only slightly higher than the targeted rate of 2% to 3%. A return to normal would be good news but prices have still risen over 19% since the last election (excluding 2024). Looking at the cost impact on “the big 3” tells an even worse story. Since January 2020:
How wages have kept pace with inflation is more complicated as the chart below shows and is likely further complicated depending on the industry one wishes to delve into but it has been a rocky ride.
The Verdict – Most Americans have jobs, and the economy is growing and largely returning to normal after the COVID years, but inflation is taking its toll. In the end, it may not matter what the high-level numbers say if your rent and grocery prices have dramatically increased, you will likely view the economy as worse than it was 4 years ago.
Immigration
It’s difficult to say which is a worse idea, an open border policy or a closed one. Open borders would overwhelm infrastructure and break the social safety net. A closed border policy might do the same thing over time as the US fertility rate is below the replacement rate and a closed border policy would deprive the US economy of the workers necessary to keep entitlements funded. In short, the US needs immigration, but it needs a wise and controlled immigration policy which it now appears to lack.
How do we know that the current policy is a failure? We needn’t look at the immigration charts, the illegal immigration numbers, or even the stories of the Federal government battling Texas over how (if?) immigration should be controlled on the US border between Texas and Mexico. All we need to know is that both Republicans and Democrats think the government is doing a bad job.
The Verdict – What was once seen as a problem by Republicans is now viewed by almost everyone as a problem or worse. When even mayors of sanctuary cities are beginning to “sour on illegal immigrants” you know the situation has worsened since the last election.
The Government/Poor Leadership
How do we measure leadership or government effectiveness? Consumer confidence might be one approach. If so, the numbers don’t paint a good picture as consumer sentiment, while rising, has yet to return to the levels it saw during the Trump administration.
Perhaps presidential approval ratings are a good measure. Biden’s are not good.
But then again, neither were Trump’s.
And we can’t even rely on the tried-and-true advice that “it’s better the devil you know than the devil you don’t” as we know both these devils. In the end, what is an election but the ultimate verdict on presidential leadership? In this case, it will be a pick-your-poison situation.
The Verdict – It’s a hung jury. Voters dislike both presidents but are unlikely to vote for RFK Jr.
Conclusion
The economy is in bad shape (or at least the perception of it is), immigration is being mishandled, and leadership is unlikely to get better regardless of who wins. Who would I vote for? As a Canadian, it’s a decision I thankfully don’t have to make, and I have problems enough as it is up here. That said, inflation and immigration would be two of my biggest concerns and I don’t see either getting better under Biden who appears to slowly be ceding control of his administration to the progressive wing of his party. Trump would likely make different decisions but their long-term implications require a crystal ball, which I don’t have.
Wrong Speak is a free-expression platform that allows varying viewpoints. All views expressed in this article are the author's own.
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A well written and thoughtful article. I take issue with one part of it though.
a closed border policy would deprive the US economy of the workers necessary to keep entitlements funded.
If you study what immigration actually does to American citizens and the inequality it causes in income, that statement isn't true. The income inequality between different races because cheap labor is brought in because corporations don't want to pay a fair wage to citizens already in the country. Tracking unemployment numbers by immigrants illegally in the country instead of citizens isn't a true picture of unemployment of the country either. This article gives a true picture of the history of what mass immigration has done to the country. The entitlement is just a talking point not a reality. The entitlements anyone is granted for immigrants is still money taken from citizens by taxation. It is money that could be better spent on citizens to benefit the country.
https://www.numbersusa.com/initiatives/hiring-line/
While the numbers are interesting, they won't matter if in the end we are voting for two sides of the same coin. Past behavior is a predictor of future behavior. We don't need a crystal ball to predict which of the administrations are a better choice. It's neither. They have failed us. People can no longer rely on out of touch global elitists and political profiteers to create a better world. They have proven time and again that money is their main concern, not the welfare of people. We are on our own, and the sooner we stop looking to megalomaniacs to "fix" it, the better. Shake it up people. If you plan on voting, sticking to establishment choices is a fool's errand.