Breitbart Business Digest: Biden’s Problem Isn’t Perceptions, It’s Reality

Don’t Call It a ‘Vibesession’

If Joe Biden loses his bid for a second term as president, the state of the economy and his economic policies are almost certain to be recorded in the history books as primary reasons voters turned against him.

This is driving progressives absolutely wild with frustration because they are convinced that the American people have it all wrong. The economy is doing just great in their minds; and if it weren’t for some sort of mass delusion, everyone would be very happy with Biden’s economic leadership.

Recently, they’ve been trying to explain the disconnect between their view of the economy and the public’s view by claiming that people think they’re doing well themselves but are down about the economy in the abstract. People have “bought into the narrative” that things are going badly, as Paul Krugman recently argued.

It occurs to me that I may not have laid out in one place what I consider the key points about negative views on the economy. There are four basic facts:

1. People are down on the economy
2. They’re fairly positive about their own finances
3. They’re relatively positive about…

— Paul Krugman (@paulkrugman) June 12, 2024

Only the view that people have bought into a narrative about bad things happening to somebody else (not people they know) explains all four. We can talk about where that narrative comes from, but it fits all the facts in a way alternatives don’t 3/

— Paul Krugman (@paulkrugman) June 12, 2024

The problem with this view is that people are not really all that happy about their personal financial situation. The most recent survey from the Economist and YouGov found that 46.6 percent of U.S. registered voters say that their family is worse off financially than a year ago. Just 15 percent say they are better off than a year ago, with 37.2 percent saying their family’s financial situation is about the same.

When asked about the broader economy, people are more pessimistic—but they’re also more optimistic. That is, 55 percent say the economy is getting worse, but 21 percent say it is getting better. Another 21 percent say it is staying about the same.

If you break these numbers down by party, you do see the expected partisan divisions. Republicans are much more likely to say their family finances have gotten worse over the last year, at 67.9 percent, and much less likely to say they have gotten better, at 4.9 percent. And when it comes to the broader economy, 82.3 percent say things are getting worse and just 2.8 say they are getting better.

So Republicans have a pretty grim view of what’s happened to their own household and an even grimmer view of what’s happening in the broader economy. That’s quite different from the idea that Krugman and company are pushing.

But surely Democrats take the opposite side? Not quite. Just over 25.7 percent of Democrats say things have gotten better for their family over the past year. Almost as many—23.3 percent—say they are worse off. Contrary to the Krugman narrative, Democrats are more positive about the broader economy than their household finances, with 41.3 percent saying the economy is getting better and 26.8 percent saying it is getting worse.

So, only a quarter of Democrats take a positive view of their personal financial progress, and two-fifths take a positive view of the direction of the economy.

What about independents, a group whose views can be crucial in close election years? Just under 48 percent say they are personally worse off, while 13.7 percent say they are better off. When it comes to the broader economy, 59.2 percent say it is getting worse, and 15.1 percent say it is getting better.

It’s the Inflation, Stupid

The takeaway is that while there definitely is some partisanship at work here and groups who feel they’re worse off than a year ago are more likely to also say the economy is getting worse, there is not really a glaring gap between how people feel about their own lives and the economy. To the extent there is, it actually seems to be helping Biden because Democrats who are close to evenly divided about their household’s financial situation are much more positive when asked about the broader economy.

The other thing to notice about these polls is that public opinion about the economy has become more negative over the past year. A year ago, 41.5 percent of registered voters said they were worse off financially, and 49.7 percent said the economy was getting worse. As noted above, now 46.6 percent say they are worse off and 55 percent say the economy is getting worse.

You do not need to resort to talk about narratives or societal malaise to explain this. The simplest explanation can be found in economic fundamentals. In June of 2023, consumer prices were up 3.1 percent over the preceding 12 months and had come down from nine percent a year earlier. The most recent consumer price index showed prices were up 3.3 percent from a year ago.

Or look at the job market. A year ago, unemployment was at 3.6 percent. Now it is at four percent. There were 9.1 million vacant jobs in June of 2023. The most recent data shows there are now around 8.1 million.

In other words, not only have we stopped making progress on inflation, things have gotten worse over the past year.

It’s no wonder that Biden’s approval rating has gotten worse—especially on the economy. The Economist/YouGov poll shows that a year ago, 43 percent approved of Biden’s handling of the economy and 50 percent disapproved, putting him seven points under water. Now 37 percent approve and 53 percent disapprove, putting him 16 points underwater on the economy.

Looking a bit deeper, the demographics of Biden’s slipping approval on the economy tell an even worse story for the Democrats. A year ago, among black voters Biden had 65 percent approval and 26 percent disapproval, a 39 percent net approval rating on the economy. Now the approvers have fallen to 49 percent and the disapprovers climbed to 38 percent, giving him just an 11 point net approval rating. The net Hispanic approval rating is unchanged at negative 11, with 39 approval and 50 disapproval.

The Democrats and their allies in the establishment media insist Biden has a problem with “negative perceptions” about the economy. That’s wishful thinking. The problem isn’t the perception. It’s the economy.