Opinion: “Misery Loves Company” Poor Excuse for Economy’s Woes
Deep Divide Between Americans and the Government on the Economy and the Threat of a Recession
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"Misery loves company” is my least favorite adage in the English language. It may contain a general truth, but the end result involves a whole bunch of unhappy people.
The Biden administration, though, seems to think it can use the saying to defend itself politically from its failures on inflation and the growing threats of a recession. The strategy seems to be to highlight bright spots in the economy and inaccurately sustain (see below) that the U.S. is doing better than other countries.
The reality is that the American people aren’t buying it, and Biden’s messaging consultants should instead pay attention to a better Spanish proverb: “La miseria de muchos es consuelo de tontos.” It translates as “The misery of many is consolation for fools.”
The “misery loves company strategy” was painfully evident on CNN’s “State of the Union” show on Sunday, May 22. Brian Deese, the Director of the National Economic Council admitted “There are always risks,” when asked about the danger of a recession by anchor Dana Bash.
CNN’s Dana Bash interviews Brian Deese, the Director of the National Economic Council on the “State of the Union” show, Sunday, May 22, 2022.
Then the tap dancing started. “There’s no doubt that the United States is in a better position than any other major country right now,” Deese argued, insisting that “We have the strongest job market.”
Bash tried again, asking: “Are you confident that the U.S. can avoid a recession?” Biden’s top economic advisor stuck to his talking points: “In this transition, the United States is in a better place than any other country because of [strong economic indicators]. If you think of where we have come from, we have navigated through Delta and Omicron, we have navigated through the gyrations coming from Putin’s war in Ukraine, and still, the American consumer, the American business, has been resilient through this period. So, if we keep our focus on bringing inflation down in a way that actually helps families …”
At that point, Bash had enough and interrupted Deese: “But, you’re not saying no?”
He responded with more of the same: “Look, there are always risks, but we feel very good about where the United States is particularly when you look on a global landscape.”
Bash then pushed Deese on how the Biden administration got inflation projections so wrong, and he again returned to the talking points about Delta, Omicron, and Putin.
In other words, the Biden folks want you to forget about high gas and food prices, baby formula and other shortages, unaffordable housing, plunging stocks, and the growing threat of a recession because the rest of the world is doing worse, something that isn’t even true.
Is the U.S. Doing Better Than the Rest of the World?
Data from the Organisation for Economic Co-operation and Development proves Deese is at best, exaggerating. The U.S. is not “in a better place than any other country.”
First, the latest OECD numbers show that inflation is worse in the U.S. than in any other G-7 country.
Courtesy: OECD.
Second, while the U.S. undoubtedly has a strong job market, OECD data indicates that at least eight of 36 listed member countries have lower unemployment rates.
Third, the U.S. has been forced to ask Europe for baby formula, and effectively gone begging to Iran and Venezuela for oil, now even reportedly moving to ease sanctions on the criminal regime in Caracas.
None of this demonstrates a position of strength for the U.S. government or the American economy.
Where Do Americans Stand?
American attitudes toward the national economy have become increasingly negative, according to an AP-NORC survey released on May 20, 2022.
It found 78% of American adults consider the economy to be in poor condition and believe the country is moving in the wrong direction. That’s a jump of eight percentage points in only one month.
Courtesy: Associated Press.
The survey also showed Biden’s approval rating dipping to the lowest of his presidency, with only 39% viewing his job performance favorably. The RealClear Politics average of polls on Biden’s handling of the economy is even worse, with only 36.3% of Americans approving and 59.6 disapproving.
Notably, Deese’s talking points put some blame on Russia’s invasion of Ukraine, but included no specific reference to a “Putin price hike,” a favorite term of prior Democratic talking points. As I wrote in an earlier, column, that was not playing well with the American public. I doubt this new messaging will do much better.
What About a Recession?
When it comes to a recession, no wonder Biden’s chief economist tried to skirt the question by saying the rest of the world was in worse shape.
He can’t definitively say the U.S. will avoid recession because there's an increasing sense among economists and Americans that we will see a recession this year or next.
In recent days, Moody's Analytics chief economist Mark Zandi said "Recession risks are uncomfortably high -- and moving higher." Wells Fargo CEO Charlie Scharf said there was “no question” that the U.S. economy is heading toward a downturn, and that “it’s going to be hard to avoid some kind of recession.” Former Goldman Sachs CEO Lloyd Blankfein agreed, saying there’s a “very, very high risk” of a recession. They are just some of the many Wall Street executives and market experts sounding the alarm.
The general public is even more pessimistic than the experts, with 85% or Americans expecting a recession in the next year, according to a Quinnipiac University survey released on May 18, 2022.
U.S. GDP growth already turned negative last quarter. Even if this quarter shows positive numbers, a downturn is likely coming again, unless the Federal Reserve manages a “soft landing” for the economy by raising rates to control inflation and calibrating its rate increases perfectly to avoid further slowing the economy. But Federal Reserve Chair Jerome Powell has already warned that there are no guarantees.
In the meantime, inflation remains at 40-year highs, and ongoing supply-chain delays are presenting Americans with insecurities about food and drug shortages they’ve rarely faced before.
Telling us that things are OK because the rest of the world is worse isn’t going to cut it.
The misery of many is consolation for fools.
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Cover photo: Traders work on the floor of the New York Stock Exchange (NYSE) on May 18, 2022, in New York City. The Dow Jones Industrial Average fell over 1000 points. (Spencer Platt/Getty Images)