At least once a year, I have posted a version of this post, this is one from September 2020. Democrats Have Always Been Better For The Economy … Always.
Historically, Republicans tank the economy with their politics of greed, then Americans elect Democrats to clean up their mess, and invariably “no good deed goes unpunished,” Americans suffer from mass amnesia and elect Republicans back in charge. Wash. Rinse. Repeat.
By all objective relevant metrics, Democrats have always been better for the economy. Statistically speaking, this is an indisputabe fact. The numbers don’t lie.
So why do so many Americans believe the opposite is true? It is one of the great imponderable questions.
One reason may be that 99.9% of Americans know nothing about economics, including reporters who report on the economy. It is a failure of our education system, and the media.
Another reason is that Republican voters believe in a whole litany of nonsense – “Don’t bother me with the facts, I know what I believe!” Their cult-like certainty in their beliefs renders them unreachable and uneducable. They are a lost cause.
Steve Benen writes, On the economy, polls show Republicans with an unearned advantage (excerpt):
Polling suggests that the more voters focus on reproductive rights, the better Democrats will do. [The “pink wave” of female voters pissed off over Dobbs rendering them second-class citizens, and their uterus “property of the state.”]
Those same surveys, however, suggest that the greater the focus on the economy, the better Republicans will do. The Washington Post reported, for example, on the results of its latest national poll conducted with ABC News.
The state of the economy looms as a major issue over the election. … Voters say inflation and the economy are two of the most important issues in their decision, along with abortion and education. Republicans hold a 17-point advantage among registered voters on trust to handle the economy and an 18-point advantage on trust to handle inflation.
The results are entirely in line with the latest data from NBC News,which released its latest national poll a week earlier, and which found Republicans with a 19-point advantage over Democrats on dealing with the economy — an all-time high for the GOP in NBC News polling.
For Democrats, this is obviously a profoundly serious problem. In the wake of the recession that began during Donald Trump’s final year in office, voters are clearly focused on economic considerations as a top priority. Right now, that leaves Republicans with a big advantage on a defining issue. [Internal inconsistency in this statement.]
But stepping back from short-term electoral considerations, there’s a larger concern: The GOP’s advantage is entirely unearned.
Recent history, for example, paints a lopsided picture. The New Republic’s Timothy Noah wrote a great piece in May noting that by literally every relevant metric — economic growth, job creation, median household income, et al. — the U.S. economy has fared better over the past several decades during eras of Democratic governance.
This is unambiguously true. In fact, over the past three decades, there have been three recessions — one under each Republican administration. Simultaneously, effectively every GOP prediction about the economy has been wrong: Republicans said Bill Clinton’s economic agenda wouldn’t work (it did), George W. Bush’s tax breaks would work wonders (they didn’t); Barack Obama’s agenda wouldn’t end the Great Recession (it did), Trump’s tax breaks would produce an economic utopia (they didn’t), and Joe Biden’s agenda couldn’t possibly lead to the creation of 10 million new jobs in a year and a half (but that’s precisely what happened).
Credibility should matter, and when it comes to the economy, the GOP doesn’t have any.
What’s more, Republicans barely even try to claim that they have anything resembling an economic agenda. House Minority Leader Kevin McCarthy unveiled his party’s “Commitment to America” blueprint on Friday, and it was vague to the point of comedy on economic policy.
Voters learned, for example, that a GOP majority on Capitol Hill would “curb wasteful government spending.” Such as? Republicans won’t say. The same document assured the public that the party would pursue “pro-growth” tax policies, without any explanation of what that might entail or how many more breaks the party intends to throw at millionaires and billionaires.
For the electorate to put its faith in the GOP’s economic plans is to effectively endorse a black box.
Complicating matters is the uncomfortable fact that Republican gains in the midterm elections would likely make the economy worse, not better: GOP lawmakers have already expressed interest in creating a debt ceiling crisis and at least one government shutdown, which would likely take a serious toll on our economic health.
I don’t doubt that the data is accurate and the Republicans’ advantage is real. But the closer one looks at the party’s lead, the less sense it makes.
Countering this unearned Republican advantage on the economy, US Consumer Confidence Jumps Again In September: Survey:
Boosted by rising wages and falling gas prices, US consumers were much more upbeat about the state of the American economy now and in the months ahead, according to a closely-watched survey released Tuesday.
The consumer confidence index jumped nearly five points to 108.0 the second straight monthly gain, according to The Conference Board. The result was the highest level since April and far better than the modest improvement economists had expected.
The US Federal Reserve has been raising borrowing costs aggressively this year, and last week announced its third consecutive, 0.75 percentage point increase in the benchmark interest rate as it tries to cool the world’s largest economy to bring down the fastest inflation in 40 years.
So far progress has been slow, as resilient consumers, flush with savings have continued to spend, supporting economic activity. But the survey showed expectations about inflation fell for third straight month, which is good news for the central bank.
“Concerns about inflation dissipated further in September — prompted largely by declining prices at the gas pump — and are now at their lowest level since the start of the year,” said Lynn Franco, senior director of economic indicators at The Conference Board.
Buoyed by a strong job market, respondents felt better about their present situation as well as expectations for the coming six months, the survey showed, but Franco cautioned that “recession risks nonetheless persist.”
Intentions to make big-ticket purchases were mixed, with plans to buy cars and appliances increasing, but more reluctance to invest in a home, which Franco said reflected rising mortgage rates and the cooling housing market.
“Looking ahead, the improvement in confidence may bode well for consumer spending in the final months of 2022, but inflation and interest-rate hikes remain strong headwinds to growth in the short term,” Franco said in a statement.
Ian Shepherdson of Pantheon Macroeconomics cautioned that the good feelings “might not last as people absorb the hit from the recent drop in stock prices and the Fed’s latest rate hikes, with the promise of more to come.”
“For now, though, people’s views of both the current and future economy have perked up, and the headline index is now just a few points shy of the pre-Ukraine invasion peak,” he said.
More good news: Factory Jobs Are Booming Like It’s the 1970s:
Ever since American manufacturing entered a long stretch of automation and outsourcing in the late 1970s, every recession has led to the loss of factory jobs that never returned. But the recovery from the pandemic recession has been different: American manufacturers have now added enough jobs to regain all that they shed — and then some.
The resurgence has not been driven by companies bringing back factory jobs that had moved overseas, nor by the brawny industrial sectors and regions often evoked by President Biden, former President Donald J. Trump and other champions of manufacturing.
Instead, the engines in this recovery include pharmaceutical plants, craft breweries and ice-cream makers. The newly created jobs are more likely to be located in the Mountain West and the Southeast than in the classic industrial strongholds of the Great Lakes.
American manufacturers cut roughly 1.36 million jobs from February to April of 2020, as Covid-19 shut down much of the economy. As of August this year, manufacturers had added back about 1.43 million jobs, a net gain of 67,000 workers above prepandemic levels.
Data suggest that the rebound is largely a product of the unique circumstances of the pandemic recession and recovery. Covid-19 crimped global supply chains, making domestic manufacturing more attractive to some companies. Federal stimulus spending helped to power a shift in Americans’ buying habits away from services like travel and restaurants and toward goods like cars and sofas, helping domestic factory production — and with it, job growth — to bounce back much faster than it did in the previous two recessions.
Treasury Secretary Janet L. Yellen said that the recovery of manufacturing jobs was a result of the unique nature of the recession, which was induced by the pandemic, and the robust federal response, including legislation like the $1.9 trillion American Rescue Plan of 2021.
“We had a huge shift away from services and into goods that spurred production and manufacturing and very rapid recovery in the U.S. economy,” Ms. Yellen told reporters during a trip to Detroit this month. The support for local economies and small businesses included in Mr. Biden’s rescue plan, she said, “has been tremendously helpful in restoring the health of the job market and given the shifting in spending patterns, I think that’s been to the benefit of manufacturing.”
American manufacturers, like many industries, have struggled to find raw materials, component parts and skilled workers. And yet, they have continued to create jobs at a rate that has surprised even some longtime promoters of American factory employment.
“We have 67,000 more workers today than we had in February 2020,” said Chad Moutray, the chief economist for the National Association of Manufacturers. “I didn’t think we would get there, to be honest with you.”
In [Republican] recessions over the last half century, factories have typically laid off a greater share of workers than other employers in the economy, and they have been slower to add jobs back in recoveries. Often, companies have used those economic inflection points to accelerate their pace of outsourcing jobs to foreign countries, where wages are significantly lower, and to invest in technology that replaces human workers.
This time was different. Factory layoffs roughly matched those in the services sector in the depth of the pandemic recession. Economists attribute that break in the trend to many U.S. manufacturers being deemed “essential” during pandemic lockdowns, and the ensuing surge in demand for their products by Americans.
Manufacturing jobs quickly rebounded in the spring of 2020, then began to climb at a much faster pace than has been typical for factory job creation in recent decades. Since June 2020, under both Mr. Trump and Mr. Biden, factories have added more than 30,000 jobs a month.
Sectors that hemorrhaged employment in recent recessions have fared much better in this recovery. Furniture makers, who eliminated a third of their jobs in the 2008 financial crisis and its aftermath, have nearly returned to their prepandemic employment levels. So have textile mills, paper products companies and computer equipment makers.
Manufacturers say the numbers could be even stronger, if not for their continued difficulties attracting and hiring skilled workers amid 3.7 percent unemployment [historically low unemployment.]
[Mr.] Biden has pushed a variety of legislative initiatives to boost domestic manufacturing, including direct spending on infrastructure, tax credits and other subsidies for companies like battery makers and semiconductor factories, and new federal procurement requirements that benefit manufacturers located in the United States. Biden administration officials say those policies could play a decisive role in further encouraging factory job growth in the coming months and years, in hopes of continuing the expansion and possibly pushing factory employment back to pre-2008 levels.
Other factors could help hasten more American manufacturing. Delayed deliveries, sky-high shipping prices and other supply chain issues during the pandemic have encouraged some chief executives to think about moving production closer to home. The average price to ship a 40-foot container internationally has fallen sharply in recent months, but it is still three times higher than it was before the pandemic, according to tracking by the freight booking platform Freightos.
Businesses are also beginning to question the wisdom of producing so many goods in China, amid rising tensions between Washington and Beijing over trade and technology. The Chinese government’s insistence on a zero-Covid policy, despite the severe disruptions it has caused for the economy, has especially shaken many executives’ confidence in their ability to operate in China. Mr. Biden has also maintained many tariffs on Chinese imports imposed by Mr. Trump.
“The pandemic response by China has definitely prompted more than a rethink on where to put new money. I think we are actually beginning to see action,” said Mary Lovely, a professor emeritus of economics at Syracuse University and a senior fellow at the Peterson Institute for International Economics. How much of that investment came to the United States was unclear. “I don’t think anyone really knows,” she added.
Ed Gresser, the vice president of trade and global markets at the Progressive Policy Institute, a left-leaning think tank, said that the United States had seen a noticeable uptick in new manufacturing establishments since 2019, especially in the pharmaceutical sector, which might be a response to the pandemic. Food and beverage establishments have also continued to grow.
[T]he Biden administration is hopeful that new policies — including a manufacturing competitiveness law and a climate law the president signed this summer — will encourage more companies to leave China for the United States, particularly cutting-edge industries like clean energy and advanced computing.
Brian Deese, the director of the National Economic Council, said in an interview that the laws were already changing the calculus for investment and job creation in the United States. In recent weeks, White House officials have promoted factory announcements from automakers, battery companies and others, directly linked to the climate bill.
“One of the most striking things that we are seeing now,” Mr. Deese said, “is the number of companies — U.S. companies and global companies — that are committing to build and expand their manufacturing footprint in the United States, and doing so based on their view that not only did the pandemic highlight the need for more resilience in their supply chains, but that the United States is creating a policy environment that makes long term investment here in the United States more attractive.”
Democratic economic policies did this. Republicans don’t do policy, only propaganda. Reward Democrats with your votes.