One of the most interesting statistics that came out after the election of Donald Trump was how the views of Republicans and Democrats on the condition of the economy sharply changed as shown in the Gallup Economic Confidence Index.
This report from Business Insider describes the change:
In fact, the proportion of Republicans saying the economy is getting better improved from 16% in the preelection period to 49% after Trump was elected. For Democrats, it did the opposite, falling from 61% to 46%.
This is interesting but not exactly surprising. After all economic ideology and interests are a significant part of what drives a person’s support for a political party. So if your preferred party is in power it is likely that you will feel the economy is better or is getting better because you have confidence in the party and its policies.
Now it is easy to say that one can rely on economic data to be the arbiter in this case. And that is what I had originally set out to do in this post. I had planned to blame Ghana’s lack of employment data, for example, as a way in which the public’s ability to certify claims made by politicians was severely stunted. This is true but it is also true that we have data like the inflation rate and the cost of credit. It is also true that USA has all the statistical data Ghana could dream of and yet the way Americans view their economy is largely through partisan lenses.
A good opinion on this phenomenon was given by James Surowiecki of the New Yorker on twitter. He argued in a series of tweets that a person’s determination of what is happening socially and politically has an effect on how they feel the economy is also going. And this he suggested, also feeds into their perception of objective economic statistics.
Politicians know this very well and that is why they easily switch from telling people to look at economic statistics to what they feel in their pocket depending on whether the statistics are in their favour or against them.
One could raise the argument about whether the state of something like an economy can be anything but subjective at an individual or household level. After all, economic statistics are estimates of what is happening in very disparate households and businesses. It is therefore reasonable to expect people’s views about the economy to vary somewhat from what aggregate statistics say.
But this view would be shifting economic responsibility from the political leadership. It is true that people’s personal economic welfare and the economic condition of the country as a whole can vary but it is the latter which should be used to judge the economic performance of government. (Let me state here that I include income distribution as one of those measures.)
If we want a political environment in which decisions are taken as much as possible by objective facts, we should stop the vacillation between asking people to vote based on economic statistics and asking people to vote based on their personal economic welfare (something which is often influenced by partisanship).
I am not making the case that economic statistics are perfect or that the economy is the only thing that should influence a voter. I am only saying that if someone wishes to vote based on the economy then their best bet would be by looking at economic statistics.