Economics is not everybody’s favorite subject.
That sentence alone could send readers running for the exits. Not that they don’t think economics is important, just that it’s too arcane to get their brains around, and too boring to want to try. Sort of like epidemiology.
But in a year as consequential as this one, it’s worth paying attention to economics, at least tangentially. Because as the election approaches, a deluge of both misinformation (another word for ‘wrong’) and disinformation (another word for ‘lying’) will be competing for our attention. Both parties will be trying to leverage the economy to their advantage — Democrats by touting it, Republicans by trashing it.
The most pain-free way I know to follow economic issues — and their effects on politics — is to read Paul Krugman in The New York Times. Few Nobel Prize winners are as adept as he at making complex subject matter readily digestible to mere mortals. I do not hold him responsible for the sins of his publication.
Speaking of which, one of his recurring themes concerns the reporting of economic news, and the startling disconnect between perception and reality that has been created and exacerbated by the media.
The American economy, he says, is by almost every measure doing remarkably well, yet people are refusing to believe it. In survey after survey, people are happy to say that they’re personally doing great, but that the economy sucks. They don’t correlate the raise they got this year with any external reality.
It’s bad enough that the Fox media bubble reports nothing but bad news about the economy, and if there’s no bad news they’ll make it up. But as corrosive as it is to have bummers and lies spewing nonstop from a supposed news outlet, their particular brand of treachery is neither new nor unexpected.
But we do expect more from the mainstream media this election cycle, so it’s especially infuriating when they strain to make good news seem bad.
Yes, they have dutifully reported the extraordinary numbers — employment up, inflation down, wages rising, stock market through the roof — but the reporting always includes a warning, something “serious” people are worried about. It’s as if good news is somehow distasteful.
Just last week, The Times ran a story with this headline:
December Jobs Report — U.S. Job Growth Remains Strong
The subhead cites the 216,000 jobs created last month, as “a sign that economic growth remains vigorous.” Which is neither more nor less than competent, straightforward reporting, right?
Not so fast. To get to that page on the website, you needed to click through from The Times’ home page, where the click-bait headline had a much different spin:
U.S. Jobs Report Is Expected to Show Slower Hiring Pace but Solid Gains
Notice how ‘Solid Gains’ takes a back seat to ‘Slower Hiring Pace,’ almost as an afterthought? Notice how “slower hiring pace” doesn’t actually mean “slower hiring,” though it strongly implies it? Notice how the hiring pace isn’t even mentioned until well into the article?
Yet the home page — the place you go to scan the latest headlines — deliberately misleads you about any economic news that’s favorable.
If you didn’t click through from the home page, you’d get the wrong impression of what those numbers actually mean. And if you saw enough of such headlines over time, you might conclude that the whole economy is rotten, when it’s anything but.
This is the editorial staff bending over backwards to make lemonade into lemons. They know that our attention spans are limited, and there are only so many stories we can click on. But that makes it all that much more important that the home pages of these publications not deceive us. Which is what they do every day.
The Times is hardly an outlier. Read about the economy in any mainstream publication, and yes, they’ll report the good news — they can’t hide the numbers, after all — but watch how they slant it. Watch how they quote “experts,” who are always “urging caution,” always warning of “a recession right around the corner.” Somehow, the absence of evidence only strengthens their conviction.
This is, of course, all about the horse race. Now that Republicans are self-immolating in real time, now that they’ve devolved into a party of buffoons and thieves, the press is desperate to level the playing field. Count on them to rain on the parade of any Democrat’s success, especially Joe Biden’s.
So we’ll have to make the case for the success of “Bidenomics” all by ourselves. But first let’s consider one of the more underappreciated aspects of that success.
Bidenomics, we hope, will spell the end of a very dark period in economic theory, and the resurgence of one of the brightest ideas of the twentieth century: Keynesian economics.
For the last four decades, the American economy has largely been in the grip of economic charlatans. “Supply-side” economics was designed by Republicans, for Republicans, specifically to provide a rationale for cutting taxes on the rich. While the theory was totally fraudulent, it was a great racket while it lasted, and it did lethal damage to the middle class. But with a little luck in the next election, it will finally be extinguished.
In its place, if we’re lucky, we’ll see the return of the Keynesians. John Maynard Keynes was a Brit whose concern for Britain’s survival in the Great Depression led him to theories of government that have been proven effective time and again since.
At its most basic, Keynesian theory assigns to the federal government an active role in controlling the economy and tempering its excesses. It suggests that any increase in government spending will ripple through the economy, stimulating new economic activity, juicing private investment, and generating new jobs.
Most of our growth in the post-World War II era was achieved by administrations hewing, in some fashion, to Keynesian theory. There were even Republicans that believed in it.
Bill Clinton and Barack Obama were too handcuffed by Republican opposition to go full Keynesian, but Joe Biden is bringing it back with a vengeance. Thanks to two freakishly bipartisan moments, the administration had passed two massive spending bills before the House was overrun by crazies. That money was put to work, first to recover from the pandemic, then to start investing, long-term, in the economic well-being of the American populace.
So far, so good. When Biden says he wants to rebuild the economy “from the bottom up and the middle out,” he’s actually paying homage to Keynes. The infusion of government spending he has managed to pull off, against all odds, is delivering results. And it’s putting up numbers even the media will find hard to ignore.
Will those numbers continue? That literally depends on the coming election.
In the meantime, despite what you might see in the press, the economy appears to be in good hands. At least for now.