Nate Cohn Profile picture
Feb 1 15 tweets 4 min read
Over at the Morning, @DLeonhardt is going back and forth a bit with @paulkrugman about why consumer confidence is low, despite a growing economy.
They have two theories; I'll add a third
Krugman notes the inflation numbers aren't *so* bad that it should mean consumer confidence is *this* low.
I do agree with that premise.
If you fit a quick model of consumer confidence as a function of inflation, gdp, income, and unemployment, you'd guess that consumer confidence should be 10-15 points higher or so, depending on model specification. A fairly large gap (truth is red; est is black)
Now I'd note that, at least with this model, the public wouldn't be expected to think things are soaring. The economy looks slightly below average here. But that does depend on variable selection and I didn't have the stock market when I did this, which might nudge it higher
So why does the economy think the economy is terrible when it should probably be no worse than slightly below-average, and maybe even better than that?
Krugman and Leonhardt have two competing theories: media coverage and COVID-induced economic challenges that aren't in the data
In support of the Leonhardt thesis, I'd note that there's are certainly a lot of unusual economic challenges that voters could rightfully perceive that aren't reflected in the data. And a lot of it is highly visible--like when flight delays get blamed on staff being out bc COVID
In support of the Krugman thesis/my corollary is something interesting in this economic data: the timing of the collapse of consumer confidence
In July, there was zero gap between perception and reality on the economy, at least by this measure.
In August, a huge one had opened up and it hasn't recovered.
It is not my view that this August drop was associated with an abrupt change in the state of the economy.
It was associated with an abrupt change in public confidence in the Biden administration, associated with the rise of Delta and Afghanistan
It would be fun to know the exact field period of the survey. But the same August drop occurs, of course, in other data--like Biden approval rating and the right-track wrong-direction numbers
And of course, August largely precedes the peak of the supply chain shortages and inflation--or even the peak of Delta.
And if you look at the questions in the confidence index, they're pretty... right track-wrong track-ish. It's hard for politics not to bleed into these kind of questions about the country as a whole, imo
In Krugman's interpretation, this is just about unfair media coverage of the economy.
But my counter-interpretation is that this is mainly about perception of the Biden administration (whether fair or not)
Deservedly or not, the public lost confidence in the Biden administration's competence and leadership in August. The country has had an adrift and hopeless feel since then, with no sense of direction back to normalcy, etc. And that's what's holding back economic confidence
Krugman's argument is that it's excessive coverage of inflation that's skewing perceptions of the economy.
Mine is that it's attitudes about the Biden administration/direction of the country are skewing perceptions of the economy

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More from @Nate_Cohn

Jan 31
The galaxy brain version of popularism would say liberalism's biggest challenge is that it's no longer especially democratic in a deeper, Dewey-ian sort of way
For all the talk about illiberal democracy, there's a lot to be said for 'undemocratic liberalism' as a challenge in America today--from both the left and the right's point of view.
The left's fear of undemocratic liberalism is fairly obvious, since it's about democratic institutions: they worry about minority rule, subversion, suppression and so on somewhat more than they worry about an end to the First Amendment or something
Read 8 tweets
Jan 26
I think this is true, but to me the more surprising phenomenon of the last year is how... long it has taken for Democrats and progressives to readjust their expectations
This last line here--about an inability to acknowledge that there were real limitations--really resonates with my experiences and I have to say that it caught me by surprise
One maybe related phenomenon is the growing alignment between ideology and what I'll call the pragmatism-v-idealism dimension of politics among Democrats, which has really taken off since '15 or so
Read 4 tweets
Jan 21
Biden was supposed to be FDR.
Instead, he's following the playbook of the last half century of politically unsuccessful Democratic presidencies, from LBJ and Clinton to Obama.
The result: only 33% say he's focused on the issues they care about
nytimes.com/2022/01/21/us/…
I cited this recent CBS/YouGov poll several times, and I think it's worth taking a look at if you missed it.
Public opinion isn't always straightforward, but Biden's situation isn't really all that complicated
cbsnews.com/news/biden-inf…
tbh Biden hasn't had any difficulty passing legislation that's aimed at dealing with immediate challenges / that has a chance to help him politically
Read 18 tweets
Jan 13
There will be a lot of questions about whether there was another path if Congress doesn't pass voting rights.
But given the path they did take (hope Manchinenma crack), I do think the timing and duration of the push--after 1/6 anniversary, around MLK day--seems pretty optimal
While other legislative strategies would benefit from being earlier in the cycle, when Biden's political capital was at its highest and before the issue was politicized, getting Manchinema to 'crack' probably did require a longer campaign
And if your strategy ultimately just involves hoping they eventually see the light, the timing around 1/6 and MLK day is about as much as you can ask
Read 4 tweets
Jan 6
Twitter, as you know, is not real life. But what happens on Twitter is not isolated from reality.
A Sanders/Warren left may not be a majority of Dems, but it's real/important! You can tell on Twitter.
On Twitter today, you can tell COVID politics have shifted, even decisively
Today, you can see a sizable and increasingly passionate *intra-Democratic* fight on COVID. Obama-era Dem stalwarts--think, other Nate or Yglesias--are in revolt against COVID emergency precautions.
And OTOH, there's still a vigorous group arguing for strong measures
Twitter, again, is not real life. For ex: IDK the size of these factions in the Dem electorate.
But for national political purposes, a vigorous intra-D elite fight on COVID tells you all you need to know about the politics at this point: it's shifted against emergency measures
Read 7 tweets
Dec 29, 2021
For the handful of you complaining that the commission-drawn California map is a gerrymander
This is a state Biden won by 30. I'm not saying Republicans should be grateful that they get districts, but no one should have any illusions about what a real gerrymander would mean for the CA GOP
There are lots of angry people insisting that California is a gerrymander. They don't even feel the need to argue it, because they think it's so obvious. (i think it's obvious the other way)
So before I explain my case, let me ask: why do you think California is a gerrymander?
Read 23 tweets

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