By Sheri Rivlin and Allan Rivlin, November 17, 2023
Most Americans are below average. This is not some pithy, upside-down Lake Woebegone poetic observation; this is the mathematical fact of an economy that has been growing increasingly unequal for generations. The White House, and the political pundit class are baffled by the gap between the improving economic statistics and the public’s dismal ratings of the economy in opinion polls and consumer surveys. The economic statistics tell us Americans are doing better on average, but most Americans believe they and their families are doing worse than average, and they are correct. When the economy creates a million new jobs, the stock market soars, and the gross domestic product (GDP) goes up by 2, 3, or 4 percent, relatively small numbers of people capture most of the gains in income, wealth, and improved economic opportunity. The public is not wrong to say that economic opportunities for their family, or their community are not improving, and they are worried that their credit card debt, auto-loans, student loans, mortgage and rental rates, food and energy costs are rising faster than their incomes.
The Federal Reserve estimates that the average (arithmetic mean) American Family earned $141.390 in 2022, but the same report tells us half of all American families (median) earned less than half of the average, $70,260 or less in 2022. The government rarely reports average income because the statistics are so distorted by the relatively small number of millionaires and billionaires that earn such a large share. Household wealth is even more unequal. The same report estimates that the average (mean) American household had $1,059,470 in net worth in 2022, but this is largely due to the 10 percent of families that have many millions in assets. A quarter of American families have a negative net worth (meaning they owe more money than they have. Half of all American families have less than $200,000 in net worth. On a psychological level, nearly all Americans feel economically below average when we watch elites on television running the government, reporting the news, playing professional sports, recording popular songs, or acting in television shows about the struggles of billionaire families.
It is not the President’s job to convince voters that the economy is better than they think it is. President Biden’s job is to understand the public’s economic frustrations and fix what is wrong with the economy. “Bidenomics” was launched under the headline “Bidenomics is Working” in July and we hoped it would help raise Biden’s standing in the polls by now, warning that Biden needed to be leading Donald Trump in head-to-head polling by the one-year mark ahead of the 2024 election to silence talk of a Democratic alternative. This has not happened because the “Bidenomics” message is 180 degrees wrong. “Bidenomics” cannot mean the President saying, “the economy is good” it must be the President saying, “I understand the economy is not good enough, and here is what I’m doing to fix it.”
Joe Biden won the White House in 2020 by talking about what’s wrong with the American economy. Looking beyond the pandemic weakness, he saw a long-term lack of economic opportunity for middle class families, and the working poor living in depressed pockets of our major cities and almost everywhere else outside of the big cities in the rural areas, small towns, and medium sized cities across the middle of America. On the campaign trail in Toledo Ohio on October 12, 2020, Joe Biden said, “The economic outlook remains uncertain. Across Ohio and the country, folks are worried about making their next mortgage payment or their rent payment, whether or not they can purchase their prescription drugs or be able to put food on the table, … They see the people at the very top doing better than they ever have while they’re left to wonder, ’Who’s looking out for me?’”
In 2020 Biden understood that the biggest problem facing the economy was, and still is, economic inequality, and especially the geographic nature of inequality with most of the growth and creation of high paying career jobs happening in the largest cities, mostly on the coasts: Los Angeles, San Francisco, Seattle, Boston, New York, Washington. If you have a college degree in, or near, one of these cities you probably have a good job, you probably vote Democratic, and you may believe the improving economy is raising all boats, (unless you are young, carrying a lot of debt, or facing unaffordable costs for housing). But if you live in Michigan, Iowa, Ohio, or western Pennsylvania and you do not have a college degree, there is no economic statistic that will convince you that the economy is as good as the Democrats say it is.
Politico reported this week that Adam Green, co-founder of the Progressive Change Campaign Committee and Danielle Deiseroth, executive director at Data for Progress were in the White House and the offices of key Democrats on Capitol Hill over the past two months with a slide deck sharing poll results that confirm what we all know by now. The public is not giving Biden and the Democrats much credit for an economy they view as not going in the right direction for people like themselves – even when the survey question is premised in positive economic statistics. If Biden campaigns for reelection on economic statistics that show the economy is stronger than people think, and Donald Trump says the economy is terrible, Trump could win despite his despicable record as president. We know this because America ran this experiment in 2016.
Unlike most political observers, we were not surprised by Trump’s 2016 victory because we were concerned by the lack of a compelling economic message coming from the Clinton campaign. The “keep good going” Clinton economic message used national statistics to make the case for continuing the Obama policies that had brought the economy back from the Lehman Brothers economic collapse. In July of 2016, during the Republican National Convention where Donald Trump won the nomination, we wrote that the Democrats needed to use their upcoming convention to articulate a new economic message. “The test is whether in the fall all of Clinton's supporters and potential supporters have an answer to the question, ‘What will Hillary do to get the economy moving and help the middle class?’ If she passes this test, she could sail to a big win in November. If not, the race will stay far too close all the way to the end.”
A “Bidenomics” event should be an opportunity for Biden to connect with voters by showing he understands what is wrong with the economy and a chance to inform voters about his progress toward making it better. He needs to do town hall events where voters share their economic anxieties, and he listens and understands, and resists the impulse to quote economic statistics that say the economy is good. At the end he needs to deliver a clear statement that the economy is not good enough, and that he has plans to fix it.
Democrats are at their best when they are fighting for the economic underdogs among the poor and the struggling middle-class in a bad economy that seems rigged against the average worker. They can always be counted on to find these themes when they are running to win the White House, but when they are in the White House, they seem to forget the themes that got them there and they feel they must extol the strength of the economy. Obama was saved by his wealthy opponent, Mitt Romney’s disparagement of the “47 percent,” aka Americans below the median. This reminded Obama to run on themes of addressing economic inequality. If Biden cannot similarly reframe the Bidenomics message, he will not earn his return to the White House in 2024.