Blog Credo

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.

H.L. Mencken

Saturday, March 5, 2022

The Lag

 Paul Krugman looks at the startling disconnect between America's economic performance and American's view of the economy. Two things are factually true: the economy is doing great, albeit with inflationary pressures (that are largely a product of "doing great") and yet Americans clearly feel the economy is in trouble. He even digs down further to note that Americans admit that their own economic situation has improved in the past year.

He walks away from blaming the news media, but I think that's a "I come to bury Caesar not to praise him" moment. 

The media is not interested in good news. What's more, social media is actively allergic to good news. Given the algorithmic imperative to get "clicks," everyone runs angry headlines to feed increasing anger. 

There is another reason why and it's that there is a lag between an improving economy and the perception that the economy is actually doing better. My clearest memory of this was in 1994. The economy started to rebound from the 1992 recession by 1993, yet perceptions that the economy was still trash hurt Democrats in the midterms. 

The other issue is, of course, Covid. Restrictions due to Covid have been pretty mild (wear a fucking mask) but they "feel" like the economy is lagging. The lived experience of March 2020-March 2021 hasn't really receded in public imagination. That's another "lag" that will take a bit to catch up to reality.

Ultimately, the fate of Biden and the Democrats in the midterms seem tied to viral mutation. As long as there are no Covid mutations that evade the vaccines, we should see a continued return to normal behavior and an increasing perception that things are "getting better" even if they already have.

Disruption in Russian oil supplies is the only warning sign I see on the near horizon, but then again no one saw that coming either.

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