Rhetoric and Public Opinion on the Economy

I always find polls to be interesting. In my mind, one of the more fascinating things is when there is a large disjunction between individuals’ assessment of X (e.g., the environment, crime, education, the economy) as they experience it and their assessment of X as the nation experiences it. I often attribute the differences to the simple fact that the latter question is strongly influenced by the way in which X is portrayed by the media and political elites. One might be satisfied with the environment as one experiences it at home, for example, but the media provides heavy coverage of environmental catastrophes, oil and chemical spills, etc.

In the latest NBC/WSJ Poll (results here), 61 percent report being very/somewhat satisfied when asked to assess their “own financial situation today.” At the same time, when asked “how satisfied are you with the state of the U.S. economy today?,” only 28 percent say they are very/somewhat satisfied. 71 percent claim to be dissatisfied (37 percent somewhat dissatisfied, 34 percent very dissatisfied).

Another question: how well is the economy working for different types of people? Fully 81 percent believe it is working very/fairly well for the wealthy whereas only 22 percent believe it is working very/fairly well for the middle class. There is an obvious tension here, given that “middle class” is the modal category and a majority (71 percent) is very/somewhat satisfied with the economy as they experience it. Similar to the earlier example of the environment, one might hypothesize that the disjunction is a product of the way in which the economy is portrayed in the media and by political elites.

The president has announced that this year he is going to focus on inequality and the lack of economic opportunity. In the State of the Union, President Obama proclaimed:

“Today, after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better.  But average wages have barely budged.  Inequality has deepened.  Upward mobility has stalled.  The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by – let alone get ahead.  And too many still aren’t working at all.”

Don’t get me wrong. I am not arguing that the economy is in good shape. There is no question on two points: (1) inequality has increased overtime, although there is significant disagreement over the larger causal story;* (2) the recovery has failed to generate the jobs one might have hoped (the unemployment rate is down, but this appears to be largely driven by declines in labor force participation).  I am not certain if the current focus on inequality reflects a genuine concern over the issue or a means of shifting blame (e.g., the recovery could deliver the jobs and incomes you want if only for the 1 percent). Perhaps it is a bit of both. Regardless, there is little that any president can do to change the Gini coefficient through “executive action” and rhetorical flourishes** (even if they are magnified by the MSM echo chamber).

This leads me to some questions: Does the emphasis on inequality and economic mobility partially drive the negative popular perceptions of the national economy and the disjunction noted above?  Even if it delivers some political benefits–I am doubtful that it will–can it shape expectations in a way that  impede a broader recovery and thus prove counter-productive?

*For an interesting piece on assortative mating and income inequality, go here (h/t Marginal Revolution).

** While there have been some skepticism that presidential rhetoric has much of its impact, the most comprehensive empirical treatment ( B.Dan Wood, The Politics of Economic Leadership) concludes otherwise.

3 thoughts on “Rhetoric and Public Opinion on the Economy

  1. Here is a different explanation for why there may be a disjunction between people’s assessment of the economy as they experience it as compared to the nation’s experience, and it has nothing to do with a liberal media elite: People have a sense of fairness and justice.

    It is always disheartening to see this, “you’re not starving, so you should be happy”, policy defense played from the right. Sure, me and my family are not destitute. But the promise of a nation is that we will share, in some way, in the growth of our economy. I realize that I am not making more money than my father despite having more education. I realize that I am paying a higher tax rate than Mitt Romney. I realize that the legal system has become all but inaccessible to those not making more than $100k per year. I realize that small portions of the world elite have not suffered this stagnation. All of these thing contribute to my perception of the economy and none of them have anything to do with a media bias.

    1. Matt, does it matter to you if you are factually wrong in these observations? Or that anecdotal information is statistically irrelevant (though, typical of ad hominum arguments of the left, to Mr. Eisner’s point)?

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