Image source: Pixabay
This is the time for everyone to do their election autopsy, where everyone pushes their preferred story of what went wrong for the Harris campaign. Mine will focus on what I consider the simplest and most obvious, the media painted a picture of a bad economy which was virtually impossible for the Harris campaign to overcome. And just to be clear, I’m not talking about the alternative reality folks at Fox, I mean the New York Times, Washington Post, and other bastions of the establishment media.Just to provide context, there is little doubt that people’s views of the economy were hugely important in determining the vote. Exit polls consistently put the economy as the number 1 or number 2 issue in people’s minds as they went to vote. And those rating the economy as a top issue voted for Trump by a huge margin.Many will say that people know their own pocketbook and the media can’t convince people they are doing poorly if they really are not. While people do know their own pocketbook, the story on their perception is a bit more complicated.First, people’s ratings of the economy are hugely partisan. When their party is in power, they say things are great, when they are out of power, they say things are awful. This is true for both Republicans and Democrats, but more so for Republicans.As a practical matter, no one thinks that peoples’ pocketbooks suddenly went bad the day after Biden got elected in 2020 or they suddenly improved when Trump won last week. But that is what people tell us if we ask them.The second point is that people have consistently answered surveys saying that they personally are doing reasonably well, it is only everyone else that is doing awful. My favorite along these lines is a poll done last spring by the Wall Street Journal where swing state voters overwhelmingly said that their state economies were improving, but the national economy was going down the tubes.Needless to say, people are not providing an answer about the national economy that differs from their state economy based on an assessment of their own pocketbook. Clearly people have been led to believe that the national economy is somehow doing much worse than what they see in their pocketbook or in their immediate community.I’ll also throw in that we can get behind what people are saying and look at what they are doing. The answer is that they are spending a lot, even after adjusting for inflation.We had record levels of air travel this summer, not behavior we expect from people with tight budgets. Maybe the people flying around the country were higher income people spending their stock gains.Okay, how about record rates of road travel? Seventy million people on the road over July 4th weekend can’t be explained by the one percent feeling flush. And people are also spending big in restaurants and even fast-food restaurants. Adjusting for inflation, people bought 11.0 percent (line 242) more meals at fast-food restaurants last quarter than they did in the last quarter of 2019, just before the pandemic hit.It doesn’t seem likely that this increase in the number of people eating at McDonald’s and Subway is due to billionaires celebrating their good fortune. In these and other seemingly discretionary areas of consumption, people are not acting like their pocketbooks are severely stretched, regardless of how they answer surveys.We know the data also support this case. Wages have outpaced inflation across the board, but especially at the lower end of the wage distribution. Real wages rose 13.2 percent between 2019 and 2023 for workers in the bottom decile of the wage distribution. This follows decades of stagnating wages.Wages rose less for those higher up the wage distribution, but these people also benefited from refinancing mortgages at low rates in 2020-22, work from home, and also big stock market gains. The U.S. economy has recovered from the pandemic far better than anyone else, and the benefits of growth have been broadly shared.
How the Media Made a Good Economy Look BadAt the most basic level, the media have continually chosen to highlight the negative about the economy. University of Wisconsin political science professor Mark Copelovitch did an analysis last year showing that mentions of “inflation” and “recession” dwarfed mentions of unemployment, even as the latter was hitting record lows and we never had a recession.The inflation we did see was part of a worldwide burst of inflation related to the pandemic, where the US rate was little different than the inflation seen in countries like France and Germany. We were told people don’t blame the pandemic, they blame Biden. That is undoubtedly true, but that is because the media didn’t remind people that the inflation was due to the pandemic in the same way they always reminded people that the withdrawal from Afghanistan was “disastrous.”But it gets worse. The media decided that they had to push the theme of the bad economy even when they had to invent stories. The New York Times had a major July 4th weekend piece telling us that some people are doing well, while less well-off workers are falling behind. To make the latter point it chose to profile a low-paid worker, who it acknowledged was atypical, in that her pay had fallen well behind inflation. Why would the paper choose to highlight the experience of a low-paid worker, that it knows is atypical, to exemplify the situation of the larger group of low-paid workers?To take another example from the NYT, columnist Peter Coy (generally a very good columnist), headlined a column “why can’t college grads find jobs?”In fact, unemployment among recent grads is near a 20-year low. The grain of truth in the piece is that the small share of recent grads who are unemployed (around 4.0 percent) are taking longer than usual to find new jobs. As a great example of how totally wrongheaded views permeate outward from the elite news outlets, the next week the Washington Post pushed the same line about unemployment among recent college grads.For another example of a totally invented catastrophe, in the summer of 2022 the Washington Post discovered that a record number of people were working two full-time jobs. If they done their homework, they would have noticed that it was not a record as a share of the workforce. That record was set in July of 2000, which was the very peak of the late 1990s economic boom, usually thought to be the best year economically since the 1960s boom. Since less than 0.3 percent of the workforce fell into this category, it should have occurred to the paper that this was not a good measure of economic pain. This story was picked up the following week by Marketplace radio.Other themes pushed in the media included the record crisis, even though near retirees had seen their assets (adjusted for inflation) grow by close to 50 percent since the pandemic. And then there was the endless stream of articles and news stories telling us the sad news that many young people have given up on the idea that they can ever share in the American dream and own a home. The big problem here is that the homeownership rate for young people was above its pre-pandemic level.We also heard endlessly about the complaint that even though inflation has slowed, prices have not gone back down. While we all would like to pay less for things, every economics reporter knows that prices can’t go back down when wages have risen by 23 percent since the pandemic. Repeating this complaint is like saying that people are unhappy they are not growing younger. That could be true, but not a matter that can be addressed by government policy.Most people are not getting their news from the New York Times or Washington Post, but the information presented in these outlets does spread to other news outlets and to social media. When people hear the bad economy story in the elite media they help its spread elsewhere.It’s true that most regular consumers of these outlets supported Harris, but that misses the point. I may root for my favorite football team and insist that they are the greatest, even though I thought the quarterback had thrown 20 interceptions last year. I would be making a much better case, if I had known that the quarterback had actually not thrown any interceptions.This is largely the story with the elite media outlets and their coverage of the economy. They helped to advance a bad economy story that was at odds with reality. Given the importance of perceptions of the economy in people’s voting, it would have been all but impossible for Harris to overcome this negative economy story, and she didn’t. More By This Author:Four More Items In The Wages Outpacing Prices Debate
Should Kamala Harris Be Celebrating The Labor Market?
Automation is Called “Productivity Growth”