Bad vibes in a good economy. What does it mean for the election?
Pollsters, political pundits and economists need to be more receptive to the view that while the economy is not technically in recession, it likely feels like it is for people at the bottom.
Heading into an election year with good economic numbers and bad polls has some political economists puzzled, but the connecting thread seems to be affordability. Though top-line metrics, like GDP, show tentative progress, consumers report their economic experience differently, leading economists to coin the phrase “vibe-cession” to describe the disconnect. Even with the formal definition of a recession broadening over time, the current metrics would not qualify. However, what consumers are likely responding to in surveys about the economy is perhaps not whether or not the economy is in recession, but rather whether or not the economy is good. Though much can change in one election cycle, currently the approval rating and economic figures under President Biden most-closely resemble the reelection figures of former President George H.W. Bush —who lost.
Issue polling shows that economic concerns make up the majority of issues that voters deem important in the upcoming presidential election, but even taking a longer view of the economic data reveals a trend that extends back decades: Labor productivity is up, real median wages are mostly flat, inflation is accelerating but is still outpaced by rental prices, and trust in the government is declining. Or put simply, people are working harder for less money, everything is more expensive —especially rent— and the degree to which working people think that public policy can or will help is falling. When the status quo is increasingly that moderate-income families have a hard time paying bills or saving, it stands to reason that the establishment, and by extension, status quo politicians have the most to lose.
Economists have pushed back against the vibe-cession narrative and resisted the notion that there are issues with the economic figures, often deferring to claims about growth, but with the sharp rise in content platforms, like OnlyFans and Twitch, the expansion of the gig economy, and online fundraising platforms overwhelmingly created to cover health expenses, it is clear there are deep distributional issues. The Biden White House makes a softer argument, instead citing how many of the aforementioned issues have slightly improved when compared to four previous years. While marginal progress is notable, many of these issues have been trending poorly for decades.
Using aggregate figures, like GDP, has very notable issues, namely that high levels of inequality, like in the U.S., can mask inequitable growth, obscuring the fact that gains can be concentrated along the income distribution, like at the top. Considering how compartmentalized economics is as a discipline, with many field specialties, and the fact that good disaggregated or distributional data is often hard to acquire, misdiagnosing economic problems is understandable. Indicators for growth or recessions are not determined using disaggregated data for race or income-level, as a result the academy has no concept of a racial recession or whether the economy is particularly bad for the poor.
From the number of people working two full-time jobs to pay the bills, the rising cost of childcare, the delinquency of medical debt, to any number of other statistics, there’s no shortage of concerning metrics. And when considering the full breadth of the data, both the vibe-cession and weak polls seem like symptoms of some long-run affordability crisis or declining economic well-being. Pollsters, political pundits and economists need to be more receptive to the view that while the economy is not technically in recession, it likely feels like it is for people at the bottom.
Mark G. Sheppard, M.A., M.P.P., a PhD candidate in Economics at the City University of New York, Graduate Center, focused on the study of inequality. He also serves as an econometrics instructor at City College of New York, a teaching assistant at Barnard College of Columbia University, a research assistant at the Stone Center on Socio-Economic Inequality, and a Specialist in the U.S. Army National Guard. The opinions expressed are solely his own and do not reflect the views of the Hill or any affiliated institutions.