You know there is a disconnect between the true state of the economy and the mainstream media’s portrayal of it when reporters start covering the gap between their coverage and the state of the economy. (“Very meta,” as the kids would say.)
National Economic Council director Brian Deese visited the White House briefing room on Thursday to explain what is going on. Recounting that the unemployment rate has dropped to 4.2 percent — three years sooner than expected — he told reporters: “So, we’ve seen very strong labor market developments, and ... those labor market developments are coupled by strong developments in overall economic growth and in household income and demand.” He added that “real household income for the typical American family is $350 a month higher now than before the pandemic, in real terms, accounting for price increases, accounting for inflation.”
Government data on Friday showed a 6.8 percent increase in inflation compared with a year ago, reinforcing the media narrative that the economic sky is falling. But too often one had to read much further down in print and online coverage to see that inflation rose 0.8 percent from October to November, a reduction from the 0.9 percent rise in the previous month. It was virtually impossible to spot caveats that Deese offered in his briefing, such as the drop in gas prices (down 9 cents, nationally, he said) as are prices for natural gas, used cars, pork and shipping.
Do not hold your breath for the media to convey nuance or to run “the economy is pretty strong, actually” headlines. And even if inflation subsides a year from now, do not expect “President Biden in peril! Democrats doomed!” coverage to end.
The task at hand for the administration is to find a way to break through the noise in a credible way. It is not without tools, but the president’s loquaciousness, his tendency to resort to a laundry lists of items in the Build Back Better bill and foreign policy distractions all hinder the Biden team’s efforts. (The Summit for Democracy was one such distraction.)
President Biden might simply have to wait out the inflation surge and look forward to “Biden rebounds!” articles next year. Nevertheless, there are several things his administration can do to improve its messaging.
First, it could use a shorthand device for tracking economic recovery. In the Carter years, we had the “misery index” (inflation plus unemployment); today, we could use a “recovery index” (increase in jobs and wages minus inflation) to measure gains in household income. Tracking where the country was in January to where it is now should convey a sense of progress. Biden needs to paint a picture of a ship that has turned direction and is just beginning to steam ahead.
Second, Biden, if he is to have any chance of reaching average voters, must refrain from reciting the interminable list of benefits in the Build Back Better bill. Instead, the message should be succinct: BBB will reduce housing, drug, health-care and child-care costs — and Republicans are against it. That’s it. (White House press secretary Jen Psaki nailed it in her Friday briefing. “We’re going to bring down the cost of child care, we’re going to bring down the cost of preschool, we’re going to make affordable housing a reality," she said. "And on the other side of the aisle, you have people who are opposed to lowering that cost.”)
The endless detail in Biden’s speeches lends to the characterization of the bill as a massive “social spending boondoggle." (In retrospect, one could argue that Biden would have done better to narrow the bill and make it into “Making Work Pay," with the sole focus on wage growth and squeezing household expenses.) It would certainly also help if Biden could lean on his old friend Sen. Joe Manchin III (D-W.Va.) to wrap up the haggling quickly. Arguably the biggest drag on Biden’s appeal has been the endless negotiation fixated on a single, large price tag.
Third, Biden needs to return to counterpunching and populism. Bloomberg reports that as a share of the economy, “U.S. corporations pulled in more profits in the three months ended in September than ever before. . . . According to initial estimates from the U.S. Bureau of Economic Analysis, third-quarter after-tax corporate profits from current production amounted to 11% of gross domestic product.” The report noted, “In the quarterly data, which go back to 1947, after-tax profits never topped 9% of GDP before 2010. In annual data they did reach 9.1% in 1929.” Republicans do not want big companies, many of which pay no federal taxes, to reduce their profits, nor do they demand that companies pay even a 15 percent minimum tax.
In short, this is the message Biden needs: “The economy is getting better, and Biden is working to cut costs for families. Republicans won’t reduce family expenses because they are committed to protecting big business’s gigantic profits and zero tax free ride.”
Biden and his best communicators (e.g., Transportation Secretary Pete Buttigieg, Energy Secretary Jennifer Granholm) would do well to pound away at that — and at Republicans. It might not solve his polling problems immediately, but that may be the best economic message he has available — until inflation improves and economic progress is undeniable.