The New Neo

Saith the experts.

[Hat tip: Althouse.]

From Zachary D. Carter at Slate:

Something is wrecking Joe Biden, but it isn’t the economy—at least the economy that economists know how to measure—and it isn’t inflation.

There’s a lot in that sentence. Does it assume that only one thing is the problem for Joe? Does it assume it’s a hard-to-perceive mystery? Does it assume that what economists measure is all there is to know about how a voter perceives the economy and how it affects him or her? Does it assume that economists’ measurements are unbiased?

And how do economists measure inflation? We get a hint in the next paragraph [emphasis mine]:

None of this has prevented Biden’s critics from declaring him an economic failure. They have instead shifted the goalposts. The warning cry of the early Biden years was “stagflation“—the simultaneous deluge of high unemployment and high inflation that defined the 1970s. … But that corner seemed to slip farther and farther away as unemployment remained stubbornly low and economic growth stubbornly high, so negative commentary began to focus exclusively on inflation. This remained a popular approach until inflation, for all intents and purposes, disappeared. According to the Federal Reserve’s preferred measure, prices rose just 2.7 percent between April of 2023 and April of 2024. Two-point-seven is higher than zero, but price changes at this pace are simply not perceptible to anyone except economists.

That paragraph emphasizes the idea that whatever criticism there is of the economy under Biden is some sort of artifact created by his critics, rather than a reality that people perceive all by themselves. It ignores the fact that unemployment figures are not necessarily a measure of actual unemployment (see this, for example, which although written in 2022 explains the principle). But even more importantly, I think, is the odd fact that it doesn’t credit the consumer for being able to think longer than the last year when evaluating inflation.

When I go to the grocery store and my grocery bill seems to be at least 30% higher than it was in 2020, I don’t get the warm fuzzies and tell myself that at least it hasn’t risen in the last year, or at least not all that much – although I beg to differ with the author of that piece, because 2.7% is perceptible to those on a tight budget.

But the last year isn’t the point. If what I used to pay for a bag of groceries during the Trump administration was pretty stable at $65, let’s say, and that same bag costs me a bit more than $100 now, I sure do notice. As for the 2.7% increase, in the last year, not only is it on top of the earlier bigger jumps, but 2.7% of $100 every week adds up to about $10.80 per month or about $130 a year. That’s not nothing to those who live paycheck to paycheck.

And people with families pay much more than $100 a week on groceries. This article from a year ago estimates the typical family of four should spend between $975 a month (if being very “thrifty”) to $1580 (if being economically “liberal”), with two levels in between. At a 2.7% rise for the year, that comes out to about $315 more per year even for the most “thrifty” among us. For people on a tight budget, that’s quite noticeable, and of course it’s on top of much higher rises – the same article mentions an 11.9% rise from 2021 to 2022.

There’s also this recent article:

In a recent interview, President Biden was told that food prices are up over 30% on his watch. But he casually dismissed this fact, claiming people have money to pay those elevated prices. …

According to the Bureau of Labor Statistics, average weekly paychecks have increased about $150 under Mr. Biden, or 14.1% in roughly three years. Normally, that would be cause for celebration, but not in the inflationary environment of “Bidenomics.”

Because prices have risen an average of 19.3% during Mr. Biden’s tenure, the average real, or inflation-adjusted, weekly paycheck has shrunk by about $50, or 4.4%. Today’s larger paychecks buy less, and consumers are being squeezed by higher prices everywhere.

This drop in purchasing power has many families relying on credit cards to make ends meet, pushing outstanding balances up to $1.1 trillion, even while the interest rate on that debt is at a record high.

Some of us haven’t gotten raises, either. Some of us are on fixed incomes, or are unemployed (for the latter, more than the statistics show).

Not only that, but grocery shopping is something we all do on a regular basis. We know how much our groceries used to cost on average. We know how much the prices have risen. And groceries are, of course, only one type of expense, although a very in-your-face one.

But back to the original article by Zachary Carter. This paragraph is unintentionally humorous:

With inflation functionally over, the search has now shifted to some other kind of price metric that can explain Biden’s terrible polling. The Washington Post editorial board hypothesizes that the country is experiencing “an inflation hangover,” feeling squeamish about higher price levels even though prices are no longer increasing at a meaningful rate.

Got it? Inflation is functionally over, meaning the thing that economists measure isn’t very high any more. But people at the checkout counter aren’t measuring the thing that economists measure, at least not in the timeframe that the economists measure it. We ask ourselves the old question “are you better off now or four years ago?” And in real life, which is where most of us live, “higher price levels” are indeed more important that the current rate of increase. Not only that, but what an economist considers a “meaningful rate” may not be the same as what the poor shmo in the grocery store, wondering whether to buy a piece of meat, considers a meaningful rate.

The writer goes on and on about various metrics, but still seems very puzzled as to why Biden is polling so badly. Now, to a hammer everything looks like a nail, and Zachary Carter seems to be an economics writer, but are Biden’s bad numbers in the polls really such a mystery? I think it’s more of a mystery why he’s still doing relatively well, but I chalk that up to Trump Derangement Syndrome on the part of so many voters.