Americans are starting to feel better about the economy:
Zachary Karabell wonders how the good economic news will affect politics next year:
With rising consumer confidence (not a good proxy for behavior but not a bad snapshot of attitudes) and all economic metrics reflecting stability and growth, it may be that the narrative of failure and coming implosion will weaken in 2015. That will change the landscape for the presidential election campaign. If that campaign pits Hillary Clinton versus Jeb Bush, it might mean a more nuanced (nuance in an election year?) debate about what government can or should do to accelerate and smooth the transition away from a manufacturing economy and towards a service and technology economy. But it is still hard to see the Republican primaries revolving around anything other than a litany of Democratic economic and national security failures, along with alleged usurpations of power.
After last week’s strong GDP report, Nyhan predicted that Obama’s numbers will improve:
The lesson of history is that Mr. Obama will get credit if growth continues, but we should not be surprised if public opinion lags objective measures of the economy. The political scientists Peter Enns and Gregory McAvoy write, for instance: “For the most part, public opinion does not react instantaneously to changes in economic information. It takes time for economic news to make its way from government reports into news reports so that ordinary citizens can absorb and respond to this information.”
Reihan hopes Republicans will get their act together:
In 2010 and 2014, reminding voters that “we are not currently in charge and things are bad” basically worked for Republicans, particularly with older white voters favorably disposed toward conservative candidates. In the next two years, this strategy is unlikely to work quite so well. It will get harder to deny that the economy is picking up a head of steam, that unemployment levels have gone from high to halfway decent, and that the federal budget deficit is getting smaller. Should Republicans congratulate President Obama on a job well done and leave it at that? Well, no. They need to do what they’ve failed to do for the past half-decade and explain why they can do a better job than the Democrats of steering the American economy.
But Waldman thinks that Republicans are in a bind:
The most important fact of the American economy in the past few decades may be its failure to produce rising wages, but that’s not something Republicans are particularly concerned with. Their economic focus is usually on business owners — the taxes they pay, the regulations they have to abide by, and so on. Even if you believe that helping those owners is the best way to help the people who work for them, you’re going to have a hard time finding Republicans who want to talk about something like wage stagnation.
Lastly, Jordan Weissmann curbs some of the excitement:
What makes this moment of the recovery seem promising is that it looks sustainable. As Matt O’Brien puts it at the Washington Post, the last year of growth hasn’t been the fastest since the recession ended, “but it has been the best.” Namely, it’s being driven by domestic spending, instead of exports (which, given the weakness elsewhere in the world, you can’t always count on), and the housing market hasn’t even fully rebounded yet. I would add that, after years of paying down their debts and buying cars with better gas mileage to deal with fuel prices, consumers are on slightly stronger footing should something unexpected go wrong in the economy, such as another sudden rise in oil prices (you never know).
In short, the U.S. economy is getting hot enough to keep chipping away at the unemployment rate and eventually push up wages a bit—at least until the Federal Reserve feels compelled to raise interest rates. It’s a good place to be. You can call it a comeback. But I wouldn’t hold your breath for a boom.