Is it Possible to Break Through Voter Pessimism on the Economy?
Is it Possible to Break Through Voter Pessimism on the Economy?
Maybe. But the only way to do it is by establishing greater confidence in the government's ability to handle a few important things well.
As 2022 gets underway, discussions about January 6, political polarization, and a phantom “second civil war” dominate elite discourse. Meanwhile, in less politically charged communities across the country, American voters remain focused on pocketbook issues, and express rising dissatisfaction with the nation’s economy and lack confidence that the nation’s political class can or will do anything about it.
Despite overall numbers that suggest America’s economy is in relatively good shape and recovering well from the pandemic hit, Americans themselves aren’t seeing it and many are nervous about the coming year.
Economic pessimism is now the most pressing and politically potent issue facing President Biden and congressional Democrats ahead of critical midterm elections.
The Associated Press/NORC Center for Public Affairs Research polled Americans at the end of 2021 to gauge their opinions about what has happened in the prior twelve months and what they expect will happen in the upcoming year. Importantly, trends show Americans are increasingly down on the national economy.
In the latest December 2021 wave, almost two-thirds of Americans rated the nation’s economy as poor—worse ratings than in the summer and close to the negative ratings when Biden took office in January. Negative sentiments may continue to grow as the full economic effect of the Omicron wave becomes more apparent, but we don’t know at this point.
Although national ratings such as this increasingly reflect partisan splits on who is in power (e.g., Democrats rated the economy more negatively when Trump was president, and now Republicans do the same with Biden in office), it’s clear that many voters across the spectrum take a grim view of the national economy. Looking ahead to 2022, Americans are mostly ambivalent about the state of the country with half saying there won’t be much of a difference between 2022 and 2021. In contrast, a majority of Americans felt that 2021 would be better than 2020 when the question was last asked.
Interestingly, despite negative views of the national economy, Americans rate their own household financial situations as mostly good—the exact inverse of ratings on the national economy, with 64 percent of Americans saying their household finances are good rather than poor.
What is going on here? We don’t know for certain but can offer some possibilities.
1. Pessimistic views of the national economy are increasingly driven by a serious lack of confidence in the government. Putting aside partisan splits on the economy, Americans in the AP/NORC poll cite things like jobs, unemployment, inflation, poverty, homelessness, taxes, and deficits as issues they’d like the government to focus on in the next year. Economic issues, along with domestic ones like health care and immigration, emerge as most important to Americans topping foreign policy, politics, and even personal financial issues by wide margins.
But when you ask people if they have confidence in the government’s ability to handle these economic issues of concern, the result is overwhelmingly negative. Three-quarters of Americans say they are not at all confident or only slightly confident that the federal government will make progress on important economic issues in the upcoming year.
Lack of confidence in the government’s handling of the economy starts at the top: President Biden’s job approval on the economy is now approaching 60 percent disapproval—up considerably from the start of his term.
2. Although most people feel okay financially, a substantial proportion of Americans report stagnant or declining household incomes coupled with rising expenses. More than one quarter of Americans say their household income is now lower than it was at the start of the pandemic in March 2020, with another 50 percent saying it’s about the same. Roughly one quarter of Americans say their household income is higher than in March 2020.
At the same time, most Americans—67 percent—say that their household expenses have increased since the start of the pandemic, with around a quarter saying household costs are about the same. Almost no one says their expenses are lower. More specifically, around 60 percent of Americans say they have experienced higher prices for services and electricity in recent months, and more than 80 percent say they’ve been hit by higher prices for gas and groceries.
Combined, this trend of stagnant or declining household incomes and higher prices clearly affects some people worse than others. As seen above, 41 percent of Americans say recent price increases for goods and services are having a major impact on their household financial situation while 48 percent say prices are having a minor impact. Only 11 percent of Americans say rising costs are having no impact on their personal situations.
Looking at these findings, Americans’ views on the economy may not make sense or seem entirely consistent. Although the national economy is objectively showing strength in terms of jobs and growth, Americans overwhelmingly say it’s in poor condition. And while people may feel okay in personal financial terms, many still express serious concerns about stuck incomes and high costs.
Maybe voter opinion on the economy is just noise and nothing can really be done about it.
Alternatively, keep in mind that “the economy” is an amorphous beast that is hard for anyone to fully comprehend or explain—experts and lay people alike. Normal Americans form their views about the economy through the lens of their own experiences and various tidbits they pick up through discussions or in the media.
From these sources, Americans are telling us that they are not at all confident in the federal government’s handling of the economy—regardless of macro indicators—and don’t expect it to get better anytime soon. Likewise, many voters face a number of economic pressures on the home front that are causing concerns, even as most people report that their own finances are not in dire straits.
What emerges from these data then is generalized pessimism among Americans about the overall direction of the country mixed with rising anxiety about voters’ own standing within an uncertain economy. It’s not one thing like inflation that is driving voters but a mood of economic foreboding that shapes multiple aspects of voters’ evaluations of politics.
These seemingly incongruous opinions are therefore not a sign of voter confusion that can be ignored but rather a guide toward greater political clarity in 2022 if leaders are willing to listen and learn.
Given widespread dissatisfaction and nervousness about the economy, President Biden and congressional Democrats would be wise to drop everything else they are doing and focus their entire policy efforts and public messaging on proving to Americans that the government: (1) can work effectively to bolster the overall national economy in terms of jobs, supply chains, public health, and getting businesses back to normal in the current Covid context; and (2) help struggling families deal with the pinch of stuck wages and high costs.
Pessimism about the economy is pervasive and incredibly hard to address.
But if Biden and Democrats focus their political efforts in the next few months on consensus and popular steps to help build public confidence in the government’s management of the economy, it is possible to restore some if not all public trust in their leadership ahead of the midterms. Everything else is secondary to Democrats’ political standing now.
Publicly haggling over the huge Build Back Better legislation won’t cut it. Take a few parts of the bill with the most immediate and important economic impacts and pass them into law. Make sure the remaining stimulus funds and new infrastructure projects are well designed, effectively spent, and widely touted across the country. Take inflation seriously and help Americans with high costs generally and on big ticket items like housing, education, and health care.
Do a few things well on the economy and let Americans know about it.