The worst economy we never had
For months, the GOP-Fox News axis forecast the bluest of Christmases.
House Republican Leader Kevin McCarthy joined 159 House Republicans in a letter to President Joe Biden saying his policies “will certainly ensure that this Christmas will not be merry” because of a “supply chain crisis” and inflation.
Chairman Jim Banks of the House Republican Study Committee, citing the same reasons, wrote to colleagues: “Our job as Republicans is to explain to the American people what the grinches at 1600 Pennsylvania Ave did to ruin Christmas.”
Fox News told viewers that “Christmas presents for your kids may not arrive on time or even at all” (Sean Hannity), that the president is “the Biden Who Stole Christmas” (Laura Ingraham) and that Biden is “facing a nightmare come Christmastime,” when “gifts are going to cost a fortune, and that’s even if you’re lucky enough to snag anything” (Jesse Watters).
And then — a Christmas miracle!
Holiday retail sales were the highest ever, jumping 8.5% from last year and nearly 11% from pre-pandemic 2019, as “consumers splurged throughout the season,” Mastercard reported.
Stores were stocked. Package deliveries were overwhelmingly on time. Inflation, though a serious concern, clearly didn’t deter shoppers, and holiday motorists found gas prices 14 cents a gallon lower than in November.
So, did GOP leaders and Fox News acknowledge they fearmongered in error? My closedcaption search might have missed something, but I found only three passing mentions on Fox News of the holiday sales triumph, amid a new round of doomsaying (“it looks like things are about to get a lot worse in the new year”). Republican Twitter guns were similarly silent.
After a year of such deception, the United States is experiencing the worst economy we never had. The economy is going gangbusters — historically so. Yet Americans, particularly Republicans, express a gloom not matched by economic reality — or by their own spending behaviors. Polls and consumer-confidence indices show an economic pessimism as grim as when millions lost jobs in the pandemic shutdown. This is, in large part, because disinformation has prevailed. Partisanship long colored economic views, but now Republicans, in addition to occupying a parallel political reality, are expanding an alternate economic universe.
“America’s economy improved more in Joe Biden’s first 12 months than any president during the past 50 years notwithstanding the contrary media narrative contributing to dour public opinion,” Matthew Winkler, former editor in chief of Bloomberg News, wrote last week. Among the gains: The economy expanded an estimated 5.5% in 2021 (fourth-quarter growth dramatically outpaced Europe and even China). Unemployment plunged to 4.2%. Record-setting U.S. stock markets (the S&P 500 is up nearly 30%) outperformed the world. Productivity jumped. Corporate profits are the largest since 1950 and corporate debt the lowest in 30. Consumer credit expanded. Confidence among CEOs is the highest in 20 years. The American Rescue Plan cut child poverty in half.
The fly in the ointment is inflation estimated at 5.6% for the year — the highest in 40 years — which is suppressing disposable income. This causes real pain for consumers, particularly lowincome Americans buying groceries and gas and anybody buying a car. But studies show that, among the lowest earners, wage gains outpaced inflation. Also, inflation is less than half what it was 40 years ago, and, unlike then, today’s bond yields signal investors don’t expect inflation to worsen. Forty years ago, stagnant growth combined with inflation to cause “stagflation.” Now the economy is roaring.
Yet a Gallup poll out last week found that “Americans’ confidence in the economy has dropped to where it was in April 2020, when nationwide shutdowns brought on by the COVID-19 pandemic plunged the nation into a recession.”
The reason is clear. As the Post’s Philip Bump explained, Republicans in April 2020 were evenly split on whether the economy was in excellent/good condition or fair/poor. Now, despite dramatic improvements, 91% of Republicans say the economy is in fair/poor condition. (The Democratic shift, in the opposite direction, was smaller.)
This happened — surprise! — during Fox News’s hysterical coverage of inflation, gas prices and supply chain problems. It invoked inflation roughly twice as often as CNN and MSNBC. Now, as Bump reported, three-quarters of Republicans say prices are the most important measure of the economy’s health (only one-quarter did a year ago), eclipsing unemployment, personal finances and the stock market.
In post-truth America, the economy is just another target for fakery.