Gas prices, the fog of policy and Biden’s approval rating

“Democracy,” Winston Churchill declared, “is the worst form of government except for all those other forms that have been tried from time to time.” But how bad is it? Looking at public opinion right now, it’s hard to escape the impression that it’s very bad indeed.

In principle, voters should judge politicians by their actions; they should support politicians who pursue policies that help them, oppose politicians whose policies would hurt them. To do this, however, voters should have a reasonably good idea of what policy is doing.

Unfortunately, when it comes to economic policy there are few reasons to be optimistic about the relationship between policy and public opinion.

In a sensible world, voters would have both a reasonably accurate picture of what’s happening in the economy and a basic understanding of what aspects of the economy are under politicians’ control. In the world we live in, neither of these things is true.

Start with the state of the economy. You might be tempted to assume that in a world in which getting and spending occupies a large part of everyone’s life, people would have a pretty good sense of how the economy is doing, even if they aren’t familiar with national income accounting. In reality, however, economic perceptions are largely shaped by media coverage — and, increasingly, by partisanship.

When the White House changed hands, Democrats began offering a somewhat more positive assessment of the economy, while Republicans became vastly more negative. In fact, Republicans now have a more negative assessment of economic conditions than they had in March 2009, the depths of the financial crisis, when the unemployment rate was 8.7% and the economy was losing 800,000 jobs a month.

You might be tempted to say that this divergence in part reflects differences in the kind of people who vote for the two parties: Small-business owners, who are strongly Republican, are suffering from labor shortages, while lowpaid workers, who tend to vote for Democrats, are experiencing above-average wage gains.

But other data show a huge divergence between what people say about the state of the economy, which is quite negative on average, and what they say about their own personal finances, which is fairly positive.

This divergence suggests people’s views on the economy reflect what they’re seeing on often partisan news media and what their politics say should be happening, rather than what they themselves are experiencing.

So many voters seem to have skewed perceptions of economic reality. Furthermore, to the extent that they see genuine problems, they may not be clear about which problems politicians can solve.

Take the price of gasoline, which has risen about $1.50 a gallon from its pandemic lows.

Higher gas prices represent a real hardship for many — and historically voters have seemed to blame the president when gas prices go up. Yet presidents have little influence on prices at the pump. So developments outside the control of any president are driving a price rise that is surely one factor in President Joe Biden’s approval ratings.

So we’re living in a nation with many voters who seem to have both a distorted view of the state of the economy and false beliefs about what aspects of it politicians can affect. How is democracy supposed to function well under these conditions?