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Joe Biden 2024 thread - Dark Brandon Strikes Again


StassneyHorn

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It was Krugman.  Here's the punchline from one November article:

 

Anyway, the analysts at Briefing Book delved into one possible reason for this disconnect, which I speculated about right from the start — but they’ve done the math. It’s now a well-established fact that partisan orientation affects expressed views about the economy: Democrats are more positive when a Democrat holds the White House; Republicans are more positive when the president is a Republican. What Briefing Book shows is that this effect isn’t symmetric: It applies to both parties, but the partisan effect on sentiment is two and a half times as large for Republicans as it is for Democrats.

 

And here is a more recent one.

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The economy is good, but Americans feel bad about it. Or do they?

The more I look into it, the more I’m convinced that much of what looks like poor public perception about the economy is actually just Republicans angry that Donald Trump isn’t still president.

Last year was a very good one for the U.S. economy. Job growth was strong, unemployment remained near a 50-year low and inflation plunged. Some reports I’ve seen suggest that this favorable combination was somehow paradoxical and contrary to economic theory. In fact, however, it’s exactly what textbook economics says to expect in an economy experiencing an improvement in its productive capacity. And I do mean textbook economics. Here’s a figure from one of the leading introductory economics textbooks — OK, Krugman and Wells, seventh edition (forthcoming) — on the effects of adverse and favorable “supply shocks”:

 
 
Image
 

krugman090124_1-articleLarge.png?quality Credit...Krugman and Wells

 
 

krugman090124_1-articleLarge.png?quality

Setting aside the added details that you can read about there, you can clearly see that the right panel, showing the effects of a positive supply shock, exactly matches what happened in 2023: strong growth combined with falling inflation.

Furthermore, the source of the positive supply shock is obvious: The economy finally got past the disruptions caused by the Covid-19 pandemic. Working out those disruptions took longer than almost anyone expected, then happened faster than almost anyone expected, but there’s no great mystery here. If some prominent economists denied that such a thing was possible, well, that’s their problem.

 
 

What is a mystery is why the improving economy hasn’t been reflected in public perceptions. There have been some fairly elaborate analyses of the divergence between economic fundamentals and consumer sentiment, but here’s a simple version:

 
 
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krugman090134_2-articleLarge.png?quality Credit...FRED

 
 

krugman090134_2-articleLarge.png?quality

The blue line is the economic sentiment index that has been produced for decades by the University of Michigan. The red line is the “misery index,” the sum of the unemployment rate and the inflation rate, inverted so that up means improved conditions. Until a few years ago, these two measures generally moved together. But despite an uptick in the most recent numbers (not shown), consumer sentiment remains at levels that in the past were associated with severe recessions, very high inflation or both.

As I and many others have pointed out, consumers’ behavior doesn’t match the grim answers they give pollsters: Actual consumer spending remains strong. Still, where is that negative assessment coming from?

Now, Michigan isn’t the only game in town. Another long-running survey, from the Conference Board, paints a more favorable picture, especially for perceptions of the present situation as opposed to expectations. And there’s a newer, internet-based survey, from Civiqs; I am by no means an expert on economic surveys, but Civiqs seems to be using fairly sophisticated methodology.

And their results on economic views by political affiliation look broadly in line with those found by Michigan for “current economic conditions.” The difference is that the Michigan numbers, which are based on a small sample, are very noisy, while Civiqs uses a bigger sample plus statistical wizardry to produce “smoothly trending estimates.” I wouldn’t bet my life on the Civiqs estimates, but in what follows I’m going to use them to suggest that one of the factors everyone knows is affecting consumer sentiment — partisanship — may be even more important than most economists realize. Indeed, weak consumer sentiment may be almost entirely about MAGA.

 

 

It has been obvious for a while that views of the economy have become increasingly partisan. It’s also clear that this partisanship is asymmetric: Republicans are much more likely than Democrats to say that the economy is good when their party holds the White House and bad when it doesn’t.

 

But the Civiqs charts show this asymmetric partisanship especially clearly. Here are their results for self-identified Republicans:

 
 
Image
 

 Credit...Civiqs

 
 

krugman090124_3-articleLarge.png?quality

Republican assessments of the economy soared when Donald Trump took office. Even during the pandemic recession, when unemployment rose to almost 15 percent, Republicans had a more favorable view of the economy than they did in the Obama years. And when Joe Biden came in, almost all Republicans declared that the economy was bad — a view that has barely budged in the face of good macroeconomic news.

Democrats are not Republicans’ mirror image. Here’s what the Civiqs numbers look like:

 
 
Image
 

 Credit...Civiqs

 
 

krugman090124_4-articleLarge.png?quality

If you squint hard, you might see some decline in Democratic economic optimism around the time of Trump’s election, but it’s small. Democrats did feel better about the economy after Biden won, but the economy actually was improving as we recovered from the Covid shutdown. And Democrats’ economic sentiment thereafter followed economic fundamentals, declining as inflation rose, then improving as inflation came down.

 
 

What about independents? Never mind. True independents, voters without partisan leaning, barely exist; data for independents is basically an average of voters who think like Democrats and voters who think like Republicans.

What I find most interesting about Democrats’ numbers is what we don’t see: a clear drag on sentiment from the level of prices. There’s a lot of anecdotal evidence — and innumerable posts on social media — to the effect that Americans are upset about how much things cost rather than the inflation rate over the past year. But that’s not obvious from the Civiqs chart on Democrats, who are roughly as positive about the economy now as they were in Biden’s early months, before the big price increases of 2021-22.

I’m not prepared to completely dismiss the issue of the overall price level, which is backed by academic research as well as anecdotes. But as I said, it’s not obvious in the survey data.

So maybe we should at least entertain the hypothesis that the historically anomalous behavior of consumer sentiment reflects the historically anomalous nature of the modern G.O.P., two-thirds of whose supporters believe — based on no evidence — that the 2020 election was stolen. Maybe economic polling, like everything else with this crowd, is all about MAGA.

If that’s really true, the political implications are somewhat ambiguous. Poor economic sentiment may not weigh on Biden because it’s being driven by people who would never vote for him anyway. On the other hand, this interpretation suggests that most of the political upside of an improving economy may already be baked in, since Democrats have already accepted the good news, while Republicans never will.

 
 

In any case, the general point is that you just can’t interpret surveys of economic sentiment, or for that matter anything else, without taking into account the fact that the modern G.O.P. bears no resemblance to the Republican Party of past years, or for that matter any political party in modern U.S. history.

 

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4 minutes ago, Incredulity said:

That tweet is astoundingly stupid.

So....it will resonate loudly with the American people.  That's just good campaign work right there.  The last decade or so has proven beyond a shadow of a doubt, you gotta speak fluent stupid if you want to have any chance of winning.

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48 minutes ago, Incredulity said:

That tweet is astoundingly stupid.

I actually agree with this, though probably not for the same reasons. It's low effort pandering and if anything gives fuel to the idea that the POTUS has an real control over consumer prices.

41 minutes ago, Brisketexan said:

So....it will resonate loudly with the American people.  That's just good campaign work right there.  The last decade or so has proven beyond a shadow of a doubt, you gotta speak fluent stupid if you want to have any chance of winning.

But, yeah, this. Maybe the stupid is the point. Seems to work pretty well for Republican messaging.

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1 hour ago, BehoId, The Underminer! said:

It was Krugman.  Here's the punchline from one November article:

 

Anyway, the analysts at Briefing Book delved into one possible reason for this disconnect, which I speculated about right from the start — but they’ve done the math. It’s now a well-established fact that partisan orientation affects expressed views about the economy: Democrats are more positive when a Democrat holds the White House; Republicans are more positive when the president is a Republican. What Briefing Book shows is that this effect isn’t symmetric: It applies to both parties, but the partisan effect on sentiment is two and a half times as large for Republicans as it is for Democrats.

 

And here is a more recent one.

 

meanwhile, nate silver thinks it is all rational.

https://www.nytimes.com/2024/02/12/opinion/biden-trump-consumer-confidence-economy.html

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46 minutes ago, gmr548 said:

I actually agree with this, though probably not for the same reasons. It's low effort pandering and if anything gives fuel to the idea that the POTUS has an real control over consumer prices.

no, its similar reasons.

 

48 minutes ago, BehoId, The Underminer! said:

if you want to win hearts and minds in this country, you gotta promise the people more doritos.  

dinomitas are the new hottness.

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2 hours ago, BehoId, The Underminer! said:

nyt had a good article the other day about how partisan perceptions of the economy are now.  d's think it is good, r's think it is bad, no matter what.  just more of the politics-before-everything that exists now.

 

That 6% indy number is pretty surprising. 

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3 hours ago, Incredulity said:

That tweet is astoundingly stupid.

It really is. Just kind of cringey with the "if you're anything like me, you love to watch the Big Game™ surrounded by your favorite snacks!" Damn those "sports drinks bottles" getting smaller!

Needs to be more natural on the script. "This bottle of Gatorade used to be 32 ounces for $2.19. Now it's 28 ounces and costs more. That's malarkey!"

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I'm an old man, I'm confused.  Can you tell me where I live?

some kinda stealing batteries joke in here somewhere.  But goddamn inflation, we can't even replace the ones in the kids' christmas toys already.  

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20 hours ago, wildcat09 said:

Garland's mistake wasn't not forcing Hur to alter the report, it was in picking Hur in the first place.

Agreed.  I am sure when he read the report, he struggled with releasing it and rued the day he appointed a "bipartisan" special counsel.

An article on lawfare talking about how the SC rules are flawed, references another article explaining the flaws in more general terms.  https://www.lawfaremedia.org/article/the-special-counsel-regulations-strike-again

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If Hur was going to tell the attorney general that he declined to prosecute President Biden, then I believe he was also obligated to explain his rationale. The very nature of the decision to decline to prosecute includes Hur’s assessment of the putative defendant (Biden) and how Biden would fare at a criminal trial, including in front of a jury, if he chose to take the stand. Would Biden come across as forgetful? As sympathetic? As willful? As dissembling? As honest? These are crucial determinations prosecutors make all the time about witnesses and defendants. Indeed, I cannot imagine writing a report to the attorney general and not including these assessments.

I think it is unfair to Hur to leap to a conclusion that he intended to act as a partisan. It is an easy accusation to make and a difficult one to prove, and it would be at odds with the Rob Hur that I know. But I do think some criticism of the language Hur used is fair. Though he is obligated to write the report and include his assessments, and though the decision to release the report belongs to the attorney general, Hur must have known that his report would inevitably be released. The attorney general has long said that he is inclined to release such reports, to the extent the law permits. 

I disagree with the article's premise that Garland overrelies on the Special Counsel rules, citing the Pence investigation.  He's right that the rules are just rules and can basically be ignored, unlike a statute (which can also be ignored, but it's more conspicuous).  But the Pence investigation is not a good comparison because Pence was not a candidate at the time it opened or concluded.

A Special Counsel arrangement is probably good government, but the prior statute was controversial and sunsetted, leaving DOJ to make these rules.  Because the rules are there, a straight shooter like Garland is going to follow them, even if he doesn't have to.

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On 2/12/2024 at 1:22 PM, Boss Hogg said:

 

That 6% indy number is pretty surprising. 

 

A president who is twice impeached, bungles an once in a century global pandemic, denies he lost / denies reality, and leads an insurrection that led to the storming of the capital the likes we haven't seen in 200 years....

 

The Studio Better Than I Thought GIF by BLoafX

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2 hours ago, StassneyHorn said:

CPI falls from 3.4 to 3.1 annual rate, and the market shits it pants over a tenth of a percentage point.

 

Because of this.  Which means March rate cuts aren't happening.  Which means valuations are too high.  Thanks for coming to my Ted talk

 

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Instead of a relatively lame video complaining about snack prices, Biden should get the CEOs of some of these food/beverage companies to co-announce with him that they're suspending all prices increases for the remainder of 2024.

I know those CEOs don't want to wade into the politics of standing next to Biden, but they also don't want to be called out directly by POTUS as being un-American.

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4 minutes ago, Nice Guy Eddie said:

 

I know those CEOs don't want to wade into the politics of standing next to Biden, but they also don't want to be called out directly by POTUS as being un-American.

They could put a picture of Hitler on the bag and people would still buy Doritos. 

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17 hours ago, babysdaddy said:

 

Because of this.  Which means March rate cuts aren't happening.  Which means valuations are too high.  Thanks for coming to my Ted talk

 

all the reporting i've heard is don't expect a rate cut before may and has been for months.  i guess there was some irrational exuberance that there would be a cut in march and this put that to bed? 

the big mover here is shelter, which is 36% of the index.  owner's equivalent rent (25.44% of the CPI) was up 6.2% yoy while rent rent (7.671%) was up 6.1%.  the way the BLS calculates these is somewhat controversial and famously laggy.

on top of that, the fed really can't do much about it.  higher interest rates leads to lower supply, both because builders are going to build fewer new units with their cost of capital going up, and because owner-occupied units have golden handcuffs.  at the same time there's lower demand because the price of money went up.  in that situation the only thing you know for certain is that the quantity will be lower, you do not know if the price will be lower (turns out that, right now, it isn't). 

 

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1 hour ago, elfenix said:

all the reporting i've heard is don't expect a rate cut before may and has been for months.  i guess there was some irrational exuberance that there would be a cut in march and this put that to bed? 

the big mover here is shelter, which is 36% of the index.  owner's equivalent rent (25.44% of the CPI) was up 6.2% yoy while rent rent (7.671%) was up 6.1%.  the way the BLS calculates these is somewhat controversial and famously laggy.

on top of that, the fed really can't do much about it.  higher interest rates leads to lower supply, both because builders are going to build fewer new units with their cost of capital going up, and because owner-occupied units have golden handcuffs.  at the same time there's lower demand because the price of money went up.  in that situation the only thing you know for certain is that the quantity will be lower, you do not know if the price will be lower (turns out that, right now, it isn't). 

 

yes, the 'market' has effectively been attempting to force the Fed's hand by bidding up financial assets in anticipation of a rate cut in March.  Didn't really make sense given how far away we are from the 2% number the Fed wants.  

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Any chance of March rate cuts went bye bye on Feb 2 thanks to huge BLS jobs report. 

The CPI report pushed first rate cut back from May to June

image.png.0d4f7b42f4961788dfec9da829f31f9d.png

 

They are using forward guidance to let the market down easy.  

At the same time, in no way does the Fed want to repeat the mistakes of Arthur Burns. They don't want to rate cut too early and let inflation spike back up, because having to raise rates again would do huge damage to consumer confidence. So they can keep it here for a long time until they are super duper sure inflation is down to 2%

 

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1 hour ago, Neonmoon said:

Any chance of March rate cuts went bye bye on Feb 2 thanks to huge BLS jobs report. 

The CPI report pushed first rate cut back from May to June

image.png.0d4f7b42f4961788dfec9da829f31f9d.png

 

They are using forward guidance to let the market down easy.  

At the same time, in no way does the Fed want to repeat the mistakes of Arthur Burns. They don't want to rate cut too early and let inflation spike back up, because having to raise rates again would do huge damage to consumer confidence. So they can keep it here for a long time until they are super duper sure inflation is down to 2%

 

American's are addicted to spending, no matter what is going on around them. Record credit card and consumer debt that is starting to default at record rates. It's going to get bloody for the poors and middles who have been foolish in personal finances (e.g. not being austere but still spending like it's the ZIRP because "they deserve it"). 

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3 hours ago, elfenix said:

all the reporting i've heard is don't expect a rate cut before may and has been for months.  i guess there was some irrational exuberance that there would be a cut in march and this put that to bed? 

the big mover here is shelter, which is 36% of the index.  owner's equivalent rent (25.44% of the CPI) was up 6.2% yoy while rent rent (7.671%) was up 6.1%.  the way the BLS calculates these is somewhat controversial and famously laggy.

on top of that, the fed really can't do much about it.  higher interest rates leads to lower supply, both because builders are going to build fewer new units with their cost of capital going up, and because owner-occupied units have golden handcuffs.  at the same time there's lower demand because the price of money went up.  in that situation the only thing you know for certain is that the quantity will be lower, you do not know if the price will be lower (turns out that, right now, it isn't). 

 

Even when you take out the food/energy and the shelter costs, you still have a rough picture:

Quote

“supercore inflation,” a measure the Fed closely follows that includes common “services” expenditures — like haircuts and lawyer fees — rose 4.3 year-on-year, its highest level since May, according to Deutsche Bank data.

 

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Just say it.  The stock market has responded to my presidency, and every penny of that has gone into your pockets, unlike my enemy, and your enemy, Donald grift Trump, who steals from anyone and everyone to line his own pockets and stiffs everyone.  He’s a shyster, a con man, a fraud. And has a tiny mushroom penis.  He’s a typical tiny dick Republican.  

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Just now, Chuckie Finster said:

James Comer is having a rough one.

 

 

Oh.  You seem to think that facts actually matter to these people.

I remind you that their greatest cause and crusade is "THE 2020 ELECTION WAS RIGGED," yet they have failed to provide any actual evidence -- not one single fucking piece -- in support of that cause, including a court filing from just this week where they flat-out said "yeah....we don't have any."  Facts don't matter.  In fact, they only piss them off.

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7 hours ago, Brisketexan said:

Oh.  You seem to think that facts actually matter to these people.

I remind you that their greatest cause and crusade is "THE 2020 ELECTION WAS RIGGED," yet they have failed to provide any actual evidence -- not one single fucking piece -- in support of that cause, including a court filing from just this week where they flat-out said "yeah....we don't have any."  Facts don't matter.  In fact, they only piss them off.

Trump won’t allow them to ignore his directive to impeach Joe and prosecute Hunter, despite there being no evidence. They have less free agency than the Branch Davidians.

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