Opinion | Americans are in over their heads when judging “the economy”

Economic strength is difficult to measure without a deeper education of it, especially when most discussions between citizens refer to “the economy” as one cohesive and undefinable unit. 

The economy is absolutely on the ballot this Tuesday, with voters overwhelmingly citing “inflation” and “the economy” as very important voting issues. But, what are Americans basing their views of the economy on? 

Judgment of the economy can take too many different forms amongst the American voter base. 

Citizens may refer to the stock market as their key indicator of economic strength — and on a surface level, it makes sense. When the stock market crashed in 2008, dropping by 777.68 points in one day, it was very much indicative of what was happening throughout the entire U.S. economy. 

But, the strength of the economy and the stock market itself are largely disconnected. When the stock market crashed during the height of COVID-19 related fear, economic indicators matched the panic. Unemployment was soaring, key businesses closed and some home goods were hard to come by. Yet, only 5 months later in October, as the world was still reeling from the economic consequences of COVID-19, the stock market rebounded. This shows that relying on just one metric — the stock market — is not a great indicator of economic strength. 

In an effort to make his economy look better, President Biden has touted his historic deficit reduction. While very clearly the largest deficit drop ever, this type of messaging is disingenuous. This deficit reduction largely reflects the expiration and canceling of COVID-19 relief programs that dominated the budget of the past few years. As inflation is still a major problem and wages are stagnant, it would be dishonest for Biden to judge the economy based on deficit reduction alone.

For others, views of the economy are also inextricably linked to partisanship. The University of Michigan found that Republicans and Democrats alike are more likely to state confidence in the economy when their party’s president is in the White House. Republican confidence in the economy peaked in 2018 under President Trump at 85%, but dropped down to 5% this year. 

This reflects a simple truth of modern America — it is much easier to resign to simple party politics than take the time to truly understand all of the different factors involved in creating a strong economy.

When researching the ins and outs of inflation — by far the most important economic voting factor for many this midterm — I realized that economics education is quite difficult. It wasn’t until I had twenty-odd sources in my tab bar that I understood how difficult it was to make a clear decision about the economy. Americans are swamped with information from every angle, and very little of it is easily understandable. 

Though inflation at its most basic level is the measure of how much more goods and services cost over a set period of time, it is caused by a wide range of factors all working together. Some inflation is caused by too much paper or digital money in the system. Corporate greed can impact inflation, as prices set for goods must reflect a degree of profit, and sometimes that profit is set far too high. To make matters more confusing, the cause of this particular inflationary period is still being debated.

Some sources will tell you that it’s due to the price gouging of oil companies, which Democrats tried to stop in Congress. Others see that supply-chains are struggling to keep up with both the issues that COVID-19 created and the return to mostly normal life. Finally, it is true too that during the Trump presidency and the bulk of the lockdown, trade policies shifted drastically, resulting in a new era of global trade that is difficult to understand. It is also important to remember that the rest of the world is also experiencing record levels of inflation, not just the U.S. 

Americans could feasibly get a better understanding of inflation and basic economics, sure, but anything further may be too difficult of a task for most citizens to understand. 

Through it all, I’m still not sure who is to blame for the economic downturn that Americans are facing today, and looking toward the future of the American economy is incredibly difficult. Though it seems many global factors are at play together, voting for a party based on “the economy” at large is unwise. 

Paul Beer writes about political affairs and reads too many album reviews. Write back to him (or send music recommendations) at pjb82@pitt.edu.