Do Economics Matter Anymore?

Economics has taken a backseat in recent elections as the media's risky misattribution of economic influence to the presidency continues.

One of the big questions going into the next federal elections, especially the presidency, is the extent to which the state of the national economy will influence the outcome.

Currently, there’s a rift on the political left. The optimists, often technocrat-types, who emphasize data that indicate slowing inflation, surprisingly robust quarterly economic growth, high consumer spending, and low unemployment numbers despite steep interest rate hikes. The hope is that these positive developments can convincingly be attributed to President Biden to help him win re-election.

On the other hand, the pessimists see stubbornly high prices in the cost of basic goods, profit-led inflation, and a weak safety net that they believe coincides with why some fraction of the public insecure. They warn that overlooking these struggles will play into the hands of Trump and the GOP, eager to attribute all the ways the economy feels poor to President Biden.

So, Democrats find themselves in a bind. Celebrate the economy and wind up seeming aloof. Speak too much about how Americans are struggling and you wind up undermining your own case.

Part of the pessimists’ analysis presupposes that those who are financially insecure will be motivated to become politically engaged and more likely to cast their ballot for the candidate that can speak to their economic struggles. While there is research to support the idea that economic insecurity affects citizens' attitudes towards government, especially during shocks, economics as a motive for voting may have a short half-life. Further, financially insecure Americans are less likely to be politically engaged. In his book on the relationship between financial insecurity and political engagement, Adam Seth Levine finds:

“When money is needed, only those who care about the issues but are not personally affected become involved. When time is needed, participation is limited to those not personally affected or those who are personally affected but outside of the labor force with time to spare.

Part of this explains older Americans’ capacity to mobilize around policy relating to entitlements. But this could also explain why, to the extent income is correlated with advanced education attainment, higher socioeconomic status Democratic voters are more seized by issues like economic inequality — not to mention climate change and police power. It could well be that by not tending to the concerns of economic pessimists the constituency Biden risks not turning out are the financially secure, not the financially insecure.

But what if economics don’t really matter anymore?

It’s been a while since we’ve had a federal election, including a presidential election, where the economy was decisive in producing the outcome one would expect. In 2020, Biden eked out a win primarily because he wasn’t Donald Trump. In 2016, Trump was elected despite an ascendant economy paralleling the second Obama term. In 2012, Barack Obama was re-elected despite 8% unemployment. At best, 2008 was the last election where economics influenced the outcome and even then, economics was as much a factor as American intervention in Iraq and Afghanistan.

Part of the reason for this could be because we’re in a period where it is especially the case that federal election outcomes are even less determined by policy and more determined by values, status, or the perceived protection of either. People who spend their time writing and talking about politics and policy want elections to be about policy because that’s what they’re interested in. But that hasn’t definitively been what has defined recent federal elections, and that’s especially the case in the recent decade or so, counterintuitively at a time when we’re told so many policy calamities are coming to a head.

And yet, despite how untethered economics has become from recent federal election outcomes, political media and policy experts still operate on a premise that misattributes economic influence to the presidency. Much of how we engage with presidential economic journalism can be characterized as kayfabe.

Kayfabe is a foundational concept in pro wrestling involving a suspension of disbelief between audiences, wrestlers, and commentators to receive as genuine that which is contrived. The raucous crowd, the trash-talking superstars, the gawking commentators are all in on advancing what they internally know is a combination of exaggerated, pre-determined, or outright fiction. A great deal of political and economic journalism rests on a foundation of kayfabe, where journalists, politicians, policy people, and partisans reinforce a premise that attributes outsized and sometimes autocratic amounts of economic influence, blame, or credit, to the presidency. One study finds the public attributes far more economic influence to the presidency than it really has, though respondents were less likely to believe so after being informed of the office’s constraints.

The idea is to artificially raise the stakes by tracing the immensity of the nation’s economic activity to one person. This entrenched premise moves the plot of political storytelling forward in a very dramatic way. Alternatively, qualifying all the ways the president doesn’t actually influence the economy or create jobs would be factually accurate but undermine the professional purpose of many professions plugged into Washington. The trouble is that eschewing the truth for a sensational lie creates the incentive for candidates with authoritarian personalities to seek the presidency who eschew truth for sensational lies.

Trump excels at kayfabe. He is very literally in the World Wrestling Entertainment’s Hall of Fame. To succeed at kayfabe doesn’t require one to be factually accurate or cognizant of plot holes or lapses in logic. The point is the spectacle, to aggressively commit to the entire act, and to double down when it looks like it’s gone too far. That’s how World Wrestling Entertainment drove its primary competitor out of business in the early aughts; it’s how Trump has sustained the support and chokehold on the Republican Party; and it’s how political and economic journalists keep audiences engaged and riven with existential anxiety.

But by so transparently taking credit for positive economic developments and deflecting blame for negative economic developments, Trump made it more apparent how partisan presidential economics reporting can be but also how absurd it sounds for a president to falsely take the same credit for economic development that his interrogators attribute to the office.

Of course, maximalist kayfabe in the political arena introduces alarming risks that further stoke the authoritarian impulses within the presidency. The monarchial autonomy that the executive branch has acquired on trade, immigration, energy production, military intervention, and insurance markets, to name a few, is in its own right a kind of democratic backsliding at best treated as a fleeting afterthought, including by many seized by the assault on democracy. Instead of asking whether a president should have a particular power, most of our technocratic media is occupied with whether the power the president is wielding at any given time is good or bad policy — or worse, are lamenting how Congress and the Supreme Court are impeding the president’s agenda.

Cult expectations beget a cult president and at worst interpret the officeholder as a kind of Dear Leader whose muscular strength will pull the steel levers of the nation toward glorious prosperity. In this sense, it isn’t a surprise that a man, like Donald Trump, who spent much of his life earning his wealth by artificially raising expectations to sell himself as a builder and terrific doer-of-all-the-things, is again seeking the presidency in a political-media establishment that has sold to the public a similarly deistic image of the presidency generally and the Biden presidency especially.

Journalists want to talk about a policy and data because those things are quantifiable, ostensibly easier for audiences to grasp, and can be branded as dispassionate, but they’re less interested in talking about what really does seem to be driving political decision-making right now: values, status and partisanship.

This November, economics might be the plot but economics probably won’t determine the outcome, but we might be told that it did anyway because the show must go on. The question becomes: At what long-term cost to federated and decentralized democracy?

That Patchwork is a first-of-its-kind newsletter about democracy, economics and culture from a decentralist angle. Today, fewer people are seeking more power over American life. To preserve a pluralist democracy will mean challenging the premise that observations, ideas and solutions are best made with a federal or national interest. Subscribe and share That Patchwork with a friend.