It occurs to me that the economy is a useful benchmark for interpreting public opinion polling. One of the things that have frustrated us in recent years is the fact that poll respondents consistently underrate the economy, describing it as mediocre or poor, when in fact it's been good or excellent. I don't know how to explain this other than by attributing poll respondents' opinions about the economy, at least in part, to misleading reporting. I think that's true, of course, across a broad range of issues. For example, selective reporting about Iraq has given most people an unduly negative view of our progress there.
What's different about the economy is that, unlike most issues, we have lots of objective data that have been maintained, on a reasonably consistent basis, for many years. So, when inflation is under 3%, unemployment is under 5%, millions of jobs are being created, GDP growth is strong and consistent and incomes are rising, we can say, objectively, that poll respondents who rate the economy mediocre to poor are wrong. That is strong evidence, I think, that incomplete and biased reporting is driving Americans' perceptions down on this issue. It is reasonable to believe that the same thing is happening on other issues where press coverage is relentlessly negative, as well.
Could we match periods of similar economic conditions under Democrat administrations and arrive at a quantative estimate of what the effect is?
10 comments:
seneca:
I think this is true, repeat something often enough and people believe it.
But I also think that people have forgotten what a bad recession is like. Today people think they are suffering if they can't afford cable.
And people don't believe the stats either, they think people are unemployed but do not get counted, or they think they have jobs but the jobs are bad jobs. etc.
Anymore, if people can't afford what they want..they have been screwed as far as they are concerned.
I agree with Terrye. It's not just press bias. It's definitely a form of Bayesian reasoning. People are trying to determine what a "bad" economy is based on their own experiences. They mostly remember Reagan's boom and Clinton's big boom. Compared to those periods, we're not doing so well. Microsoft for example only gives raises of 1.4% for promotions and doesn't give stock options any more. What happened to the good old days of instant millionaire-hood for everyone? Obviously the economy is on its last legs.
The question comes down to: do you have everything you want? If not, it's a bad economy. The stats mean nothing.
Hmmmm. That's an interesting point --- so people are comparing it to the dotcom boom?
seneca:
They are comparing it to TV.
The average person cannot understand "good" economy vs. "bad" economy.
Ah, you consider it a rational belief? I don't. Attitude makes the difference and is not necessarily based on current realities. Also in play are optimism, a sense of one's own virtue, and a feeling of security. Certainly the media has been pushing pessimism and so has the Democratic party and other progressive folks. What they have forgotten in this political ploy is to offer an alternative.
I believe that terrye and meaninglesshotair are onto something important. Our society produces incredible wealth and we see it on display in many places. People are often moving the goals posts for what constitutes the good life. This has been observed at least since Toqueville.
From Democracy in America.
"In aristocracies, the poor or lower levels are stuck by birth and are forced to dwell in imagination of the next world. It is closed in by the wretchedness of the actual world but escapes therefrom and seeks joys beyond...Thus when distinctions of rank are blurred and privilege is abolished...the poor can conceive an eager desire to acquire comfort and the rich think of the danger of losing it...In America I have never met a citizen too poor to cast a glance of hope and envy toward the pleasures of the rich or whose imagination did not snatch in anticipation good things that fate obstinately refused him."
I've been putting a book together for sometime that talks about aspects of this. It will be published soon (yay!). Unfortunately, it will be sold as a textbook, meaning too costly for most people. Anyone interested can see a description here-Tantalizing Times. Sorry for the self promotion, but 10 yrs. is a long time to work on something, even as a hobby.
Barry,
Thanks for the quotation. That alone was worth the price of admission to Flares today. And, hey, my textbook sells for only $35. What's up with yours?
BD has the sense of it, I think.
People on TV, unless they're in a cop or doctor series, never seem to actually work.
MHA,
I got the word today that it will sell for $70.95-yikes! I didn't write it for captive audiences (AKA make your students buy your book). But the publisher felt it wouldn't sell beyond academics and priced it as they do their texts. I think it could sell outside, but not at that price.
BTW, what is your book about?
Considering how hard it is to get even two economists to agree about economics at any but the most primitive levels, I wonder if there *are* any large-scale rational beliefs about economics.
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