Editor’s note: The St. Petersburg Conference on World Affairs has brought together diplomats, military, media, scientists and experts for more than a decade to work together at better understanding and operating in the world. It will be held at the University of South Florida St. Petersburg Student Center from Feb. 6-8. This column is by a participant. This year’s theme is “Rethinking.” Find out more here.
Harold Macmillan grew up in wealth and privilege, was badly wounded in World War I, went into politics and rose to become Britain’s prime minister in 1957. He is perhaps best known for his de-facto campaign slogan in the 1959 parliamentary elections: “You’ve never had it so good.”
Which was true. Wages in the U.K. were rising, industry was booming, and Macmillan’s support for universal health care and other reforms was turning dear old Blighty into a nice place to live.
If I were running for reelection as U.S. president, I’d revive that slogan. Economically, at least, Americans haven’t had it so good in ages.
The Dow Jones Industrial Average recently closed at the highest level in its 127-year history. Stocks have been soaring since the Federal Reserve late last year signaled it would soon stop punishing us with ever-higher interest rates to contain inflation.
Indeed, inflation has slowed — from 8% last year to around 3% in the latest reading of the Consumer Price Index. Meanwhile, wages are rising faster than prices, labor productivity is soaring, retail sales are strong and the unemployment rate has fallen below 4% — half the level of COVID-scarred 2020.
As for the economy overall, it grew by a respectable 3.3% in the most recent quarter. In 2020, it shrank by 3.4%.
“Bidenomics,” as both Republicans and Democrats call the president’s mix of generous COVID relief, lavish infrastructure spending, worker empowerment and enhanced business competition, seems to be working. So why is President Joe Biden limping in opinion polls? More to the point, why are Americans so pessimistic about prosperity?
In poll after poll, voters say the economy is their No. 1 issue — and they’re not happy about how it’s going. A recent New York Times/Sienna College survey of major swing states found that even 62% of Democrats who’d voted for Biden last time rated his handling of that issue only “fair” or “poor.” In a recurring NBC News poll, a mere 19% felt that life would be better for the next generation than for their own — the lowest proportion since that question was introduced in 1990. (To be clear, the Pew Research Center did report late last month that Americans’ views of the economy “are showing signs of improvement.”)
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Why don’t Americans think they have it so good, even as economic data indicate they do?
Here are a few possibilities:
-- The economy has become weaponized, a consequence of America’s ever-deepening partisan divide and the fact that it’s an election year. Republicans simply can’t admit that things are going well under a Democratic president, and vice versa.
-- Bad news sells. News outlets, especially the web-based variety, have learned that scary headlines draw more eyeballs than reassuring ones. That’s why some economists have been referring to the current economic anxiety as a “vibe-cession.”
-- Inequality persists. The wealthiest among us are relatively wealthier than such people were in years past, and the poorest relatively poorer. The latter tend, naturally, to complain more than the former.
-- It could be something else. People who are economically pessimistic may actually be upset over more intractable, emotionally charged problems — immigration, abortion access, the “deep state,” climate change, “wokeness.” It’s simpler to grouse about inflation.
-- Rising prices affect people differently. Homeowners, for instance, have benefited greatly from inflation — renters and would-be buyers, not so much. The latter are loudly frustrated.
-- Life is still expensive. Declining inflation rates don’t mean things are getting cheaper. Indeed, prices almost never fall, except in the kind of full-bore depression we really don’t want.
-- We’re still recovering from COVID. It killed more than 1 million Americans — our friends and family members — sickened far more and made lasting changes to the way we live and work. It’s not surprising we’re grumpy. Trauma heals slowly.
-- We fear the current prosperity won’t last. Indeed, the economic landscape is littered with landmines: climate change, the wars in Gaza and Ukraine, a nascent COVID comeback, the untamed rise of artificial intelligence.
For those reasons and more, it’s impossible to say how a strong economy might affect this year’s elections. History, however, may have a lesson for us in the fate of Harold Macmillan back in 1959.
Despite Britain’s economic recovery, he faced a strong opposition Labor Party, unease over his country’s emerging nuclear weapons program, dissatisfaction with it declining influence in the world and other headwinds, including his own mercurial personality.
Still, Macmillan and his Conservative Party won the elections in a landslide and gained a solid majority in Parliament. It had taken months of pounding a certain slogan into their heads, but voters were smart enough to realize that, yes, they did have it pretty good after all. And they wanted it to stay that way.
Don Morrison is a Miami-based author and columnist. He was an editor at Time Magazine and has taught at universities in Britain, France and China.