Thank Media And Social Networks For Mass Economic Despair

We live in an immaterial world

(Photo by Michael Ciaglo/Getty Images)

Whatever you think of the U.S. economy, or Joe Biden’s handling of the U.S. economy, this much isn’t really arguable: public perception—including the widespread, false belief that the U.S. is in recession—has fallen out of step with where historical data suggests it ought to be. 

I’m not saying you have to believe the economy is good, or that it has necessarily been good for you personally. Just that the economic challenges the country faces today are much less severe than they’ve been in the past, when economic sentiment was somehow better. Across all major indices, including inflation (now basically kicked), unemployment, and interest rates, our problems have been worse in prior eras without running public opinion this deep into the dirt. Wish mortgage-interest rates were lower? Well, they’ve been higher in the past, again without creating mass despair. 

Everyone should be a bit puzzled by this, and everyone should want to understand it, even if only because it’s fascinating. Democrats (and really everyone who wants to stop Donald Trump) should be particularly interested, because a) making big macroeconomic policy changes under divided government is nearly impossible, and b) even if it were easy, the phenomenon itself suggests people aren’t really responding mechanistically to specific hardship indicators. Gas prices are currently way down! And yet… 

Which is to say, the best hope for arresting and reversing the sentiment probably doesn’t lie in tweaking policy but in changing mass conventional wisdom. That doesn’t mean condescending to the minority of people who really are struggling by telling them that they’re imagining things. It means reaching people who say things like “everyone knows the economy sucks” (it doesn’t) the same way they might say “everyone knows Sinbad starred in a movie called Shazaam” (he didn’t, there is no such movie), and convincing them they’ve got bad information. 

ALL THE BLUES THAT’S FIT TO PRINT

First, some good news: Step one in that process is underway. Macroeconomic data continues to shine, and mainstream news outlets are finally starting to wrestle with the inconsistency between data and opinion, which is a precondition to bringing sentiment and reality into alignment. 

The Daily probed the mystery here, as a followup to this searching article, after investigating the role that social media plays in fomenting “economic despair.” 

And that’s just the New York Times.

The bad news is that, for the time being at least, economic sentiment remains in the toilet. And even if you agree that the economy is bad, you can’t explain—with citations to specific metrics—why public opinion has soured more than in past, worse economies. 

Something else, or some other combination of factors, must explain it.

The hypothesis that gets people most riled up is propaganda—something everyone likes to believe only other people are susceptible to. But to me it’s the most straightforward explanation, and my hope is that if we categorize the information problem thoughtfully, it’ll stop striking progressives as some kind of insult. 

When people left of center hear that word—propaganda—their minds race to Fox News-style Orwellian brainwash. Weak-minded partisans being dumb. But if you imagine the large majority of Americans who say the economy is bad to be composed of different kinds of media consumers, you see that propaganda is absolutely responsible for a lion’s share of negative economic sentiment. 

Republican voters are now nearly all primed to say the economy is terrible the instant a Democrat wins the presidency. Their media and social milieus have trained them to hate Democrats and thus to register all public opinion negatively during periods of Democratic rule. Something similar happens in reverse, too—liberal economic sentiment deteriorates under Republican presidents—but much less so. As with all aspects of U.S. polarization, it’s heavily asymmetric and the asymmetry is driven by Republicans, who are 2.5 times likelier to pull this binary toggle from “the economy is good” to “the economy is bad” on a purely partisan basis. Biden was perceived to be an economic failure in his earliest days in office by almost half the country. What is that if not “propaganda driving changes in economic sentiment?”

Once we accept that these kinds of media and social cues can affect survey data, you start to see other, subtler sources of the misalignment everywhere. 

Mainstream media has become addicted to emphasizing plucking bad economic news from the surfeit of good data, and sniffing out stories of distress rather than the larger number of happy anecdotes (e.g. expensive groceries, rather than all the raises people have gotten to make those same groceries affordable). In some cases they just mislead news consumers about what the data means.

Signs of economic strength are actually harbingers of doom!

Things are more expensive than they were—do people have the extra money they need to buy them? We don’t say!

And then there’s the even more passive phenomenon of consensus wisdom bouncing around in an echo chamber. The writer of one of my favorite Twitter accounts recently observed, “Just the other day I was incidentally listening to a pledge drive and part of the pitch was ‘I know it is hard to give money in these trying times, but…’ and I think a deluge of that kind of talk has *got* to affect people. But it's not the same as, say, watching Fox News.”

Those of us who suspect something weird is happening here are supposed to convince ourselves that the information environment has no effect. That these kinds of news stories and headlines and tossed off assertions, pervasive as they are, don’t shape public sentiment. Of course propaganda works! But only on incurious Republicans. Or, worse, we’re supposed to conclude that the NPR broadcaster asking for money and CNBC and even Fox News are right and the macroeconomic data is wrong. 

But I think propaganda does work, and it’s why young people vie with Fox News viewers for the mantle of economic negativity.

If you believe economic sentiment is a good proxy for the health of the economy—that material conditions drive sentiment more than vague, mediated impressions—this is a confounding result. The current recovery and economy are far better for young people than recent recoveries and economies have been, but youth sentiment is far worse than in the past, including among people who voted for Joe Biden. In fact, it’s dramatically worse among the young than among the cohort of people who are actually struggling in the economy (though of course there is overlap).

I promise you it is not the case that 89 percent of people under the age of 30 are struggling, and simply communicating their personal experiences to pollsters. That’d be a ludicrous, self-refuting conclusion to draw. And even if the numbers weren’t so implausibly lopsided, it’d still be a bizarre way to construe the data. The materialist theory is that, when a pollster asks someone whether the economy is good, bad, or meh, that person won’t respond to the question directly, but with an assessment of their personal economic conditions. But why would that ever make sense? Why wouldn’t we expect them to answer the actual question? And to answer that question—is the economy good or bad?—one must enter the realm of social information.

It’s much easier to imagine that many young people are, for instance, registering their overall disapproval of Joe Biden by saying the economy is bad. Others are likely trying to answer the question “how’s the economy doing?” correctly (rather than simply basing their answer on their personal finances) but have been misled to believe that the broader economy is a wreck. 

Where would they get that idea? It’s not coming from the Bureau of Labor Statistics or the Bureau of Economic Analysis. Perhaps it’s from the kind of media I cited above!

Or from social media, which thrives on doomerism. Or an alchemy of the two. Social media leftists will boost CNBC of all news networks if it’ll help them convince people the economy is hellish. Many of them respond to any recitation of good economic news as some kind of provocation—a tell that the goal is to create conformity around the view that things are terrible for most people. 

But they’re not. Pollsters could ask people how their personal economic fortunes have fared, and the answers would look very different from their surveys on “the economy.” But they don’t have to do that. The government does that for them, and that survey data reveals that the economy is quite strong. 

BOOHOO ECONOMICS

If you still don’t buy that media and groupthink explain the excess gloom—why economic sentiment is worse in today’s economy than it was under significantly worse economies—that’s fine. But you need another explanation.

One would be to stipulate that something happened between the last strong economy and this one to fundamentally change how people assess their material circumstances. And as luck (???) would have it something of that magnitude did happen: The global coronavirus pandemic. Could it be that a year-plus of no commuting, flexible scheduling, (relatively) sympathetic bosses, and lots of government support transformed people’s sense of what it means to live in a good economy? It absolutely could. 

But I don’t really think it did. The surveys I’ve read aren’t really designed to suss this out, but we do know people were NOT happy about How Things Were Going in the year 2020, and as an intuitive matter, I don’t believe humans have rationally sorted Things They Liked About 2020 from Things They Didn’t, and chosen to hammer Biden for phasing out the former, without crediting him for fixing the latter. If you have more purchasing power than you did in 2020, and more freedom to move safely through society, but no longer enjoy a flexible work schedule, how does that sum to you telling a pollster that Biden sucks and the economy is in a recession?

But even if our collective experience of COVID-19 fundamentally, lastingly altered our expectations, we are still talking about expectations, which are socially constructed, rather than material conditions, which are measurable.

I have another, underbaked theory: that what we’re seeing in youth public opinion are the metastases of a long-run strategic effort (well-intentioned though it was when progressives first adopted it) to use climate alarmism to mobilize young people into politics. It seemed like it could only work one way: note that without change the climate future is bleak, then observe that only one of our two parties believes in climate change. Make young people upset, harness their anxieties, and that’s millions of voters who’ll stay active in politics and vote progressive for life.

Reflecting now from my front row seat to the Gen Z doom spiral, it suddenly seems obvious how that could go awry. How we might have deluded ourselves into thinking existential despair could be easily harnessed for good, without curdling into nihilism. 

Biden’s economic approval among the young looks like what you’d get if the president had four years, and only four years, to fix every problem in the economy—and if he failed or didn’t try it meant the future was ruined. But that’s the logic of climate doom applied to the economy.

It’s also perfectly compatible with the idea that young people (like Republicans) inhabit social milieus where everybody just knows the economy sucks. Young people may not be getting their news from CNBC (for that we give thanks) but they do rely on platforms where catastrophism has a leg up over careful assessment of evidence. Why should we be surprised that their political sentiment has come to resemble what the algorithms encourage?