Voters Were Right About the Economy. The Data Was Wrong.

[Passages]

Here’s why unemployment is higher, wages are lower and growth less robust than government statistics suggest.

By Eugene Ludwig

02/11/2025 12:00 PM EST

Before the presidential election, many Democrats were puzzled by the seeming disconnect between “economic reality” as reflected in various government statistics and the public’s perceptions of the economy on the ground. Many in Washington bristled at the public’s failure to register how strong the economy really was. They charged that right-wing echo chambers were conning voters into believing entirely preposterous narratives about America’s decline.

What they rarely considered was whether something else might be responsible for the disconnect — whether, for instance, government statistics were fundamentally flawed. What if the numbers supporting the case for broad-based prosperity were themselves misrepresentations? What if, in fact, darker assessments of the economy were more authentically tethered to reality?

On some level, I relate to the underlying frustrations. Having served as comptroller of the currency during the 1990s, I‘ve spent substantial chunks of my career exploring the gaps between public perception and economic reality, particularly in the realm of finance. Many of the officials I’ve befriended and advised over the last quarter-century — members of the Federal Reserve, those running regulatory agencies, many leaders in Congress — have told me they consider it their responsibility to set public opinion aside and deal with the economy as it exists by the hard numbers. For them, government statistics are thought to be as reliable as solid facts.

SNIP
What we uncovered shocked us. The bottom line is that, for 20 years or more, including the months prior to the election, voter perception was more reflective of reality than the incumbent statistics. Our research revealed that the data collected by the various agencies is largely accurate. Moreover, the people staffing those agencies are talented and well-intentioned. But the filters used to compute the headline statistics are flawed. As a result, they paint a much rosier picture of reality than bears out on the ground.
https://www.politico.com/news/magazine/2025/02/11/democrats-tricked-strong-economy-00203464

Before the election I recall interviews WNYC had on air inviting the public to speak about their experience with the economy. Many had two and some had three jobs. Then WNYC invited economists to speak re: the economy and they were adamant the economy was greatly improved, essentially telling people they were wrong about their experiences.




Eugene Ludwig is chair of the Ludwig Institute for Shared Economic Prosperity and former U.S. Comptroller of the Currency. He is author of The Vanishing American Dream: A Frank Look at the Economic Realities Facing Low- and Middle-Income Americans.

[Wiz Imp]

1. Sorry, but this guy is full of sh!t

[Passages]

2. Your statement versus his evidence.

Ok.

I believe far too many Americans drifted to a demagogue who by the way took over an already corrupt Republican Party and has now won TWICE....despite being a felon etc.

If Democrats don't change and adjust we will continue to lose.

[travelingthrulife]

16. So we should become criminals to keep up with the GOP?

Next time we should run a felon?

[Abnredleg]

3. Any evidence to go with that rebuttal?

We need to get over this reflexive rejection of unwelcome news or we’ll never get our strategy worked out.

[Wiz Imp]

9. I'm not going to bother spending significant time on it because a dishonest hack like this

isn't worth it. But you want an egregious example of his being full of shit? There's this:

He says: "If prices for eggs, insurance premiums and studio apartment leases rise at a faster clip than those of luxury goods and second homes, the CPI underestimates the impact of inflation on the bulk of Americans. That, of course, is exactly what has happened."

That is a 100% false statement. Prices for eggs, insurance premiums and apartment leases ARE included in the CPI. Prices for luxury goods and second homes ARE NOT. He is flat out lying to readers. That alone is enough for me to know that he is a dishonest piece of shit. Also, Most analysts believe CPI overstates inflation.

According to the information available, luxury goods are generally not directly included in the Consumer Price Index (CPI) as the CPI focuses on a basket of goods representing average consumer spending, and high-end luxury items are considered too niche to accurately reflect broader price trends;

According to most economic research, the Consumer Price Index (CPI) generally overestimates the true rate of inflation, meaning it tends to show a higher increase in prices than what consumers actually experience due to factors like substitution bias and quality improvements in goods and services.

https://backup.ons.gov.uk/wp-content/uploads/sites/3/2024/03/Consumer-price-inflation-basket-of-goods-and-services-2024.pdf

[JustAnotherGen]

4. I paid

$3.09 at the pump in NJ yesterday, and my go to restaurant if I don't bring my lunch 'in office' days raised the cost of a wedge salad to $9 from $7 in December.

So yeah - it's really bad and I blame Trump/Musk. They are at the top and its all of their fault.

A month ago my regular unleaded was 2.99.

What changed in that time?
https://gasprices.aaa.com/?state=NJ

[Passages]

6. He did not say it would get better under Trump.

The point is Democrats needed a stronger message and platform, one that did not include being dismissive about voters' hard economic situations.

[unblock]

8. Guess I listen to different democratic speeches

Because I've always heard democrats talking about how most people aren't billionaires, and most people want the government to do something about price gouging, high meds prices, workers not getting paid a living wage, etc.

It's as if the mere mention of higher gdp under Biden negates the other 90% of their speech.

[Passages]

10. We lost twice and the evidence is pretty clear people rolled the dice for Trump, again on the economy.

If we ignore evidence and do not change our messaging, and our platform we'll keep losing..imho.
It seems to me some think voters will come back to us just by waiting out the destruction Trump brings.

I believe that would be a huge mistake, we need to change.

How Neoliberalism Failed, and What a Better Society ...
The Roosevelt Institute
https://rooseveltinstitute.org › Publications
Aug 7, 2024 — As chief economist and senior fellow at the Roosevelt Institute, Joseph Stiglitz focuses on income distribution, risk, corporate governance, ...

[travelingthrulife]

17. It was about satisfying their bigotry. Why are you blaming Democrats for their bigotry?

[Passages]

28. That is implausable.

There is sexism and racism, and Obama won twice with large margins. You can have both societal ills and elect a black man to the highest office twice.


We are deluding ourselves if we see this election loss on one issue, imho.

[LuvLoogie]

26. No they voted for him for DEI and immigrants

The economy is just cover for their white victim hood grievance. This is a racist country.

The economy always does better for more people under Democratic administrations. Things get better for more people under democratic administrations. That is statistically and historical born out.

[JustAnotherGen]

11. I'm not arguing with the author

I'm stating a fact. My economic situation has gotten worse under Trump and I don't want that dismissed.

[Passages]

12. It will get worse for most of us.

[Skittles]

14. what's an example of Kamala dismissing voter's economic concerns

thanks

[Passages]

15. It's about communication, we did lose twice to this thug.

Blaming voters is not going to win the next election.

[Skittles]

22. Kamala talked plenty

the mainstream media talked about inflation, not her plans

[Passages]

23. They did focus on inflation...and it is her job to speak how she will remedy the problem.

For example, don't depend on M$M to be fair, they haven't been since Cronkite.

Another example, Harris had this fantastic policy of eliminating medical debt. Instead of having interviews with Oprah, the billionaire, have town halls, and do them alone and via Democrats as surrogates for her in other red states. We have some awesome Dems who could invite people locally who are in medical debt, it is the number 1 reason Americans go bankrupt. If they would like to share their stories, great, if not, talk about how your policy is going to make a difference for them. Compare contrast to Trump, who doesn't give a damn if you live or die.

I don't agree with the idea we are great, and people are too stupid so throw your hands up in the air and hope they come crawling back while Trump destroys the country...not suggesting you adhere to such a thing either.

I could go on, Lina Khan was a HUGE asset for her, but she did not utilize her and Kanter's work for working people in Bidens anti-trust division. Too many lost opportunities and it is a scandal even today that we did not know the level of compromise Biden had long before that devastating debate. Harris had little time and we were denied a primary.

[Skittles]

24. you do not unerstand the power of sexism and racism

no amount of Town Halls would have overcome that

[Passages]

25. Yea, I do.

I understand it quite well.

[yaesu]

5. If anything the Biden administration needed to push more news about how good the economy was

Compared to the clusterfuck tRump left US. Also, it wasn't the economy, it was the 3.5 million votes scrubbed from the election by red state voter suppression that put tRump in office. Though MSM pushing the false the economy is worse bs didn't help

[unblock]

7. Obnoxious spin. I don't recall anyone saying ever aspect of the economy was just peachy

He's making out like anyone who said gdp was looking good or that aggregate inflation was tame was simplistically saying everything about the economy was perfect.

Pretty much any time I heard a democrat talk about the aggregate stats they also said that the distribution of gains needs to be improved and that workers have been left out of the massive productivity gains over the last 4-5 decades. We all know inflation hits different goods and different industries and different regions differently.

That's why Biden and democrats worked and continue to work to try to make things better for workers.

Aggregate stats are useful when comparing apples to apples, such as Biden's economy vs. Donnie's economy. And they're useful for high-level aggregate policy, such as setting interest rates.

He's noting problems democrats have long focused on and have done things to address. But instead of acknowledging that, he's acting like he discovered, shockingly, that the economy is not completely homogenous and ordinary people are getting the short end of the stick.

It's like he's never heard a democratic speech, ever.

[Igel]

13. Social Sciences--including education--has Campbell's law.

More generally, Campbell's law is a special case of Goodhart's law.

Politicians spout "important indicators" and those indicators will be catered to. If they go bad, things are worse than expected.

I know that what I heard wasn't compatible with my daily existence. I understood that citing an average as politicians are wont to do without median, standard deviation, and kurtosis was due to ignorance or intentional falsehood, so I discounted a lot of things. I was surprised by how "I want to believe" (perhaps surpassing Fox Mulder poster and going for "I need to believe" or, cynically, "I need *them* to believe&quot swamped discourse.

[Hugin]

18. Not raising the minimum wage forever has had an impact...

Last edited Thu Feb 13, 2025, 01:37 PM - Edit history (1)

IMHO, that’s what has caused the disconnect.

I’ve always thought the minimum wage should have a COLA built into it. The bottom line is that it’s the Greedheads’ fault.

[Passages]

19. Yes, it is significant the harm that still takes place and sadly will only

get worse under Trump.

[LiberalLoner]

27. Yes! We need another great flattening, like after WWII. Everything more fair. We need a little socialism IMHO.

[KPN]

20. Good stuff! Have a heart.

[Passages]

21. Thank you!