gracchusdixit

In 1992, Bill Clinton’s colorful, and mouthy, campaign manager, James Carville, coined the phrase “It’s the economy, stupid!” to describe his strategy for getting Clinton elected during a recession created by the conservative economic policies of George Herbert Walker Bush.  Since then, the proposition that the economy trumps all other electoral considerations has become totemic on both sides of the political divide.  

Even now, as Republicans face major headwinds going into the 2018 mid-term election, they are turning to a “booming economy,” supposedly produced by tax cuts and deregulation, as their salvation.  The one fear they willing to admit to is that the innumerable distractions emanating from the White House and Donald Trump’s increasingly manic “tweets” will prevent their message of economic success from getting through to the American people.  Whether Republicans actually believe this fairy tale or are merely grasping for some slender straw of hope, is anybody’s guess.  Whatever the reality, their purported faith in the power of what they see as a booming economy seems to be misplaced.

Despite all the usual metrics—the stock market, GDP, unemployment figures, and so on—most Americans seem unimpressed by the “booming economy” Republicans tout with such pride.  On the contrary, no matter what the economic statistics may say, a substantial majority believe the country is heading in the wrong direction; most have concluded that the Republican tax cuts were little more than a give-away to corporations and the rich; and Donald Trump’s approval numbers have sunk to new lows.  Adding rhetorical insult to ideological injury, a substantial number of voters say they want Democrats rather than Republicans to take control of Congress two months from now.  It may be that Republicans can still buck these headwinds and maintain control of the House of Representatives (one should never underestimate their guile and cunning), but if they do, it certainly won’t be because of the economy.

What Republicans, as well as many pundits and prognosticators, fail to realize is that the economic metrics we have relied upon for decades say very little about the actual well-being of the nation, let alone most Americans.  Indeed, these metrics are fundamentally misleading, causing us to imagine things to be better than they actually are. 

The most fundamental economic metric of them all—GDP, or “gross domestic product”—is also one of the most misleading.  GDP is our principal measure of total economic activity.  In the last fiscal quarter, it grew by four percent, which prompted Donald Trump to claim personal responsibility for unprecedented prosperity, even though similar gains happened several times during the Obama years. 

GDP does not tell us anything about who benefits from growth, however, nor does it indicate which sectors of the economy contribute to, and therefore profit from, growth.  Most of the recent gains in GDP have gone to the top one percent of the population and to the financial industry, not to industries, like manufacturing and retail, that create most of the jobs in our economy.

The metrics that measure those jobs are themselves no less misleading. The official level of unemployment, for instance, is now less than four percent, and we are constantly told that some sectors of the economy are complaining about “labor shortages”.  Here again, Donald Trump has been quick to claim credit for what he has described—quite fictitiously—as “the lowest unemployment numbers in history”. 

The trouble is that our employment figures are notoriously dodgy, a problem that Trump himself once found it convenient to deplore when Barack Obama was president.  They do not, for instance, include those who have stopped looking for work, either because the jobs aren’t there or because the pay on offer isn’t worth the effort. Nor do they reflect the employment status of the prime working-age population, as opposed to teenagers and retirees who are willing to work part-time for low wages.  When it comes to the core working-age population—people who have families to support and mortgages to pay—the reality is that employment hasn’t yet recovered from the financial collapse of 2008. 

Much the same is true when it comes to measures of income.  Strictly speaking, average income is on the rise.  But the crucial word is “average”.  When one percent of the population is doing extravagantly well, and the rest of the population is doing poorly, averages are worse than misleading; they are meaningless.  Average household income in the United States, adjusted for inflation, recently returned to the level it was at 25 years ago.  That rebound occurred, not because most households are doing better, but, rather, because a few households are doing phenomenally better. 

The same is true when it comes to the metrics of wealth.  With the recovery of the stock market, which Trump touts on an almost daily basis, the average net worth of Americans has rebounded handsomely.  But that average is distorted by what can only be described as a grotesque level of economic inequality.  

Once upon a time, two out of three Americans owned stocks, either directly or by dint of various funds or retirement programs; today, the number is barely more than 50 percent.  The richest 20 percent of the population now own 80 percent of the country’s wealth, and the richest one percent owns more wealth than the bottom 90 percent combined.

The “booming economy” Republicans cling to as their electoral salvation therefore means next to nothing to most Americans.  Their economic prospects aren’t getting better.  Their jobs aren’t more secure.  Their standard of living isn’t improving.  Their debts and health insurance premiums aren’t declining.  Their hopes for a better future for their children are evaporating.

Swaddled as Republicans are in a cocoon of big-money donors and their blinkered ideology, they seem incapable of understanding the economy as it actually is.  Instead, they cling to the metrics of a mythical economy, one that is rigged by the rich for the rich.  If Republicans insist on making this myth the centerpiece of their electoral strategy, they will achieve the ultimate irony of disproving the mantra of their greatest political nemesis, James Carville.  If they go down in defeat in November, it will be because they failed to realize:  “It’s not your economy, stupid!”