Ernie Tedeschi, the director of economics at the Yale Budget Lab who in March wrapped up a three-year stint on the White House Council of Economic Advisers was asked by Business Insider, “was the “vibecession” fake? He replied:
“The short answer is no. The vibecession was not fake. The long answer is no, but … ,” he said. Perceptions of the economy have to do with more than the economy itself. That doesn’t mean that people were lying or that their answers didn’t have some real economic motivation, but there’s clearly more to it than the material conditions in front of them — it’s also about their ideological leanings and how that shapes what they believe is ahead.”Perceptions of the economy are definitely deeply partisan,” Tedeschi said.
That’s right. Republicans are now very rosy on the economy and Democrats are gloomy (although the GOP voters’ abrupt switch is far more dramatic.) BI continues:
It’s easy to say the shift in sentiment is partisan flag-waving — now that Donald Trump is headed to the White House, Republicans are going to say everything’s great, and to the Democrats, it’s all terrible. But that’s not really what’s happening, said Joanne Hsu, the director of consumer surveys at the University of Michigan. When people say their expectations are better or worse, it’s not simply the outcome of the election they’re responding to but the policies they believe are on the horizon.
“With the election of Trump, people have an idea of how economic policy might change over the next year and over the next four years. So people are expecting tariffs. They’re expecting action on immigration,” Hsu said. “The thing is that people across the population really disagree on whether or not these policy changes are a good thing or a bad thing for the economy.”
Democrats are worried that Trump’s threatened tariffs and promise to undertake mass-deportation efforts will make things pricier. Republicans, on the other hand, think that these policies will be good for the economy and that Trump will help bring down inflation. Independents, Hsu said, are in the middle.
Democrats beliefs are shaped by economic experts who are evaluating the policies based upon empirical evidence and history while Republicans are basing their beliefs on a shared worship of their cult leader they erroneously believe is a self-made businessman when he is actually a spoiled heir to a fortune he squandered and then created a fake image on reality TV.
But sure, both sides…
Businesses don’t love the idea of tariffs, but many are hopeful that there are ways they can get around them or that the president-elect isn’t so serious about them. Or they just plan to pass along any price increases to consumers anyway. (There may be some amount of denial going on among corporate executives and Wall Street investors, all of whom seem to be ignoring some of the potential downsides of Trump’s policy promises and the instability he could represent.)
Ya think?
No, they’re excited about their tax cuts and deregulation and very likely the fact that they can gouge their customers with tariff rationales if they are enacted. Whatever works.
The Real American MAGAs will pay, one way or another, but they’re fine with that. After all, these are people who happily send their life savings to a billionaire.
I don’t mean to sound hopeless. I’m really to the point that I’m just hoping Trump can be stopped from doing his worst even if he pretends he’s hugely successful. I keep my fingers crossed that world events don’t catapult out of control and that we get out of this without a catastrophe like the COVID pandemic or war. That’s about it.
Right now, we just need to survive this with as little damage as possible. It’s a huge lift but it can be done.
I don’t know what comes after him, but I don’t think anyone has quite the constellation of talents and flaws that Trump does so there’s little point in anticipating Trumpism as an ongoing political force. It will be something different.
